GSEC Limited Vs DCIT (Gujarat High Court)
The Gujarat High Court considered a petition under Article 226 of the Constitution challenging the notice dated 27.03.2021 issued under Section 148 of the Income Tax Act, 1961, and the order disposing of the Petitioner’s objections. The Petitioner had filed its return for Assessment Year 2014-15 on 27.11.2014 declaring total income of Rs.3,44,45,390/-. The return was selected for scrutiny, notices under Section 142(1) were issued on 12.04.2016 and 24.06.2016, and the assessment order was passed on 18.11.2016.
After receiving the Section 148 notice, the Petitioner filed its return and requested the reasons recorded for reopening on 20.04.2021. Instead of providing the reasons, the Department issued a notice under Section 143(2) on 06.05.2021. The Petitioner subsequently filed objections on 25.08.2021, which were disposed of on 21.12.2021.
The Petitioner contended that the recorded reasons themselves showed that reopening was based on scrutiny of the case records, balance sheet, profit and loss account and computation of income, without any fresh material. The Revenue had relied on the shareholding pattern involving GSEC Aviation Ltd. and Komal Infotech Private Limited and proposed that a loan of Rs.16,55,41,554/- received by the Petitioner from GSEC Aviation Ltd. was liable to be treated as deemed dividend under Section 2(22)(e).
