Anantara Solutions Private Limited Vs Additional / Joint / Deputy / ACIT (Madras High Court)
The Madras High Court considered a writ petition challenging notices issued under Sections 148 and 142(1) of the Income Tax Act for reopening an assessment relating to the assessment year 2015–16. The original assessment order had been issued on 29 December 2017. Subsequently, the Income Tax Department issued a notice under Section 148 on 29 March 2021 seeking to reopen the assessment. The petitioner responded on 24 June 2021 by enclosing a copy of the previously filed return of income and requested the reasons for reopening the assessment. Thereafter, a notice under Section 143(2) read with Section 147 was issued on 30 June 2024, raising issues relating to alleged set-off of carried forward losses, undervaluation of shares, and repayment from the securities premium account being treated as deemed dividend. The petitioner responded on 13 July 2021 explaining that there was no justification for reopening the assessment. However, the objections were rejected by order dated 1 December 2021, and a notice under Section 142(1) was issued on the same date. These notices were challenged in the writ petition.
The petitioner submitted that during the relevant period it had filed a petition before the High Court seeking sanction for reduction of share capital. The petition had been allowed by order dated 6 November 2014, and the minutes were drawn up as part of that order. The order recorded that payments were made to six shareholders at the rate of ₹76.98 per equity share using funds available in the securities premium account as on 31 March 2014. The petitioner also pointed out that extensive correspondence had taken place with the Income Tax Department during the scrutiny assessment prior to the original assessment order dated 29 December 2017.
