NuPower Renewables Pvt. Ltd. Vs ACIT & Others (Bombay High Court)
The Bombay High Court recently quashed a reassessment notice issued by the Assistant Commissioner of Income Tax (ACIT) against NuPower Renewables Pvt. Ltd. for the Assessment Year 2011-12. The court found that the notice, issued beyond the four-year limitation period, lacked a valid basis as it relied on information already available to the Assessing Officer during the original scrutiny assessment.
NuPower Renewables Pvt. Ltd. had filed its original return of income on September 29, 2011, declaring a loss, and a revised return on March 31, 2012. A scrutiny assessment under Section 143(3) of the Income Tax Act, 1961, was completed on December 26, 2013, with the Assessing Officer accepting the declared loss.
On September 28, 2018, the ACIT issued a notice to reopen the assessment for AY 2011-12. The reasons recorded for reopening stated that information had been received from the Additional Director of Income Tax (Investigation) Unit-4(2), Mumbai, on March 15, 2018. This information indicated that NuPower Renewables had received approximately Rs. 49.90 Crores from Mauritius-based Firstland Holdings Ltd. in Financial Year 2010-11 as subscription for Compulsorily Convertible Cumulative Preference Shares. The Assessing Officer’s reasons highlighted that “the source, genuineness and creditworthiness of the foreign entity M/s. Firstland Holdings Limited, Mauritius remains unexplained and needs further investigation.” The potential escapement of income was estimated at Rs. 49.90 Crores. The Assessing Officer also contended that the assessee had failed to disclose fully and truly all material facts necessary for the assessment, bringing the case within Explanation 1 to Section 147 of the Act.
