Subhash Chander Dabas Vs ACIT (Delhi High Court)
Delhi High Court held that validity of reassessment under section 148 of the Income Tax Act has to be determined based on original reasons disclosed to the assessee. Such reasons cannot be improved upon subsequently.
Facts- The writ petitioner impugns the proceeding for reassessment commenced in terms of Section 148 of the Income Tax Act, 1961 and pertaining to Assessment Year 2012-13. Since the proceedings for reassessment were commenced prior to the procedure for reassessment coming to be recast by virtue of Finance Act, 2021, it was the procedure as prevalent at the relevant time which was adopted by the respondents.
Conclusion- In ATS Infrastructure Limited v. Assistant Commissioner of Income Tax Circle 1 (1) & Ors. it is held that the formation opinion under Section 147 and the reasons which are taken into consideration for initiating action of reassessment cannot waiver or be one of changing hues.
A reassessment action would have been permissible, provided it were established that the petitioner had failed to make a “full and true disclosure” of all material facts. Obviously, and once it is conceded by the respondents themselves that the petitioner had not directly received any remittances from the DSNE CGHS, there would have been no occasion for the petitioner to have made a disclosure in its Return of Income. Accordingly, and for all the aforesaid reasons, we find ourselves unable to sustain the invocation of Section 148.
