Jasmine Towels Private Ltd. Vs ACIT (Madras High Court)
The appeal concerned the validity of reassessment proceedings initiated under Section 147 of the Income-tax Act, 1961 for Assessment Year 2004–05. The assessee challenged concurrent orders of the Assessing Officer, the first appellate authority, and the Tribunal, all of which upheld the assumption of jurisdiction for reopening the assessment. The substantial question of law was whether the reassessment was invalid as being based on a mere change of opinion.
The assessee had originally filed a return claiming deduction under Section 80HHC. The return was selected for scrutiny, and an assessment under Section 143(3) was completed on 29.12.2006. However, the assessment order was completely silent on the claim under Section 80HHC, with no reference to its computation, examination, or any discussion with the assessee. The order also did not reflect issuance of notices or questionnaires seeking details relevant to the deduction.
Subsequently, a notice under Section 148 was issued on 31.03.2009 proposing reassessment. The assessee responded by requesting that the original return be treated as a response and sought the recorded reasons. Despite this, the reassessment order dated 13.10.2010 stated that there was no response, though it referred to discussions with the assessee’s Chartered Accountant regarding excess deduction claimed under Section 80HHC, which formed the basis of reopening.
