Case Law Details
Sandesh Procon LLP Vs ACIT (Gujarat High Court)
A bare perusal of the reasons and original the assessment order made under Section 143(3) of the Act, the facts emerge that, the respondent authority had determined the issue of disallowance after considering the material available and now again without any tangible material available with the Assessing Officer based on the same materials, which were relied at the time of original assessment proceedings, has reason to believe that there is escapement of income. Therefore, in this circumstances, we are of the view that, the material available with the Assessing Officer, at the relevant point of time, while making original assessment under Section 143 (3) of the Act and at the time of reopening of the assessment, the materials available with the Assessing Officer were the same and there was no any new material surfaced during the reassessment proceedings.
We have examined the contentions raised by the learned counsel appearing for the writ applicant with regard to disallowance under Section 14A of the Act would restrict to the amount of exempt income and not at a higher figure. In this regard, reliance has been placed on the case of Principal Commissioner of Income Tax Vs. State Bank of Patiala [(2018) 99 Taxmann.com 286], wherein, the Apex Court has dismissed the SLP after considering the case of Principal CIT Vs. Case of State Bank of Patiala held that, the amount of disallowance under Section 14A of the Act was restricted to the amount of exempt income only and not at a higher figure. Therefore, applying the same principle to the facts of the present case, the proposed amount is exceed the exempt income of the assessee. In that view of the matter on merits, invoking the provisions for reopening of the assessment under Section 147 of the Act is bad in law.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
By filing this writ application under Article 226 of the Constitution of India, the writ applicant has assailed the legality and validity of the impugned notice dated 26.07.2018 issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as “the Act” for short) proposing to reassess the income of the writ applicant for the A.Y. 201213 on the ground that the income chargeable to tax for the said year had escaped assessment within the meaning of Section 147 of the Act.
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