Shilp Realty Private Limited Vs ITO (Gujarat High Court)
Gujarat High Court, in a recent judgment, set aside a reassessment notice issued under Section 148 of the Income Tax Act, 1961, and the subsequent assessment order for Assessment Year 2013-14, against Shilp Realty Private Limited. The court found fault with the Income Tax Officer’s (ITO) lack of independent application of mind in initiating the reassessment and the failure to pass a speaking order on the assessee’s objections.
The case originated when Shilp Realty Private Limited, which had filed its return for AY 2013-14 declaring a loss, received a notice under Section 148 on March 19, 2020, seeking to reopen its assessment. The company responded by filing a return and subsequently, on June 26, 2020, received the reasons for reopening. Shilp Realty promptly filed objections on July 25, 2020, requesting the reassessment proceedings be dropped, arguing that the reasons were misconceived and baseless.
Over a year later, on July 27, 2021, the respondent, the ITO, disposed of these objections, rejecting them in their entirety. Shilp Realty challenged both the Section 148 notice and the order disposing of objections before the Gujarat High Court, contending that the ITO acted in haste and failed to address their contentions. During the court proceedings, it was revealed that an assessment order had already been passed on September 28, 2021, which was also subsequently challenged by the petitioner through an amendment to their petition.
