Siemens Limited Vs DCIT (Bombay High Court)
Bombay High Court ruled in favor of Siemens Limited, setting aside reassessment proceedings initiated by the Income Tax Department for the Assessment Year 2014-15. The dispute arose from two conflicting orders issued by the Assessing Officer (AO) under Section 148A(d) of the Income Tax Act. The first order, dated July 26, 2022, concluded that Siemens had fully disclosed its income, and no reassessment was warranted. However, just five days later, on July 31, 2022, the AO issued another order taking a completely opposite stance, stating that Rs. 77.2 crore of unassessed income had escaped taxation. The High Court found this inconsistency unjustified, as no new evidence or material had surfaced to warrant a change in position. The court also questioned the role of the Principal Chief Commissioner of Income Tax (PCCIT) in approving two contradictory orders within a short span.
The court ruled that the reassessment notice was invalid, emphasizing that once an authority determines that reassessment is unnecessary, it cannot reverse its decision arbitrarily without a valid reason. The court also directed an inquiry into the actions of the AO responsible for issuing contradictory orders. The ruling underscores the importance of procedural consistency and proper application of the law in tax reassessment cases. The petition was allowed, and the reassessment notices were quashed.
