Aashish Niranjan Shah Vs Union of India (Bombay High Court)
Bombay High Court held that initiation of reopening of assessment after expiry of four years from the end of relevant assessment year without failure on part of the petitioner to disclose any material fact fully and truly is unsustainable in law.
Facts- This petition is a challenge to reassessment proceedings initiated in respect of A.Y. 2013-2014. The Petitioner, an individual had filed the relevant tax returns on 27th September, 2013. The returns were subjected to scrutiny assessment u/s. 142(2) of the Income Tax Act. The assessment order came to be passed on 11th March, 2016. An addition of Rs.1,14,329/- was made to the returned income. In compliance with the same, the additional tax amount as assessed was paid on 12thApril, 2016.
On 31st March, 2021 i.e. seven years after the end of the relevant assessment year, a notice u/s. 148 was issued to the Petitioner. In a nutshell, the case of Respondent No.2 was that income from trading in shares to the tune of Rs.20,69,450/- had escaped assessment, because of which reassessment was being proposed.
Conclusion- An essential ingredient of the first proviso is that no action for reassessment can be taken after the expiry four years from the end of the relevant assessment year, unless the income escaping assessment has been caused by the failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. That vital element is sorely missing in the instant case.
