ACIT & Anr. Vs Venture Real Estate & Anr. (Supreme Court of India)
The Supreme Court considered the Revenue’s challenge to the Bombay High Court judgment in Sesa Sterlite Limited (Formerly known as Sesa Goa Limited) Vs ACIT (Bombay at Goa High Court), concerning reopening of assessments under Sections 147 and 148 of the Income Tax Act, 1961 on the basis of the Shah Commission’s report alleging under-invoicing of iron ore exports. The Bombay High Court had quashed the reassessment notices, holding that the Assessing Officer could not form the requisite “reason to believe” merely from the Shah Commission’s conclusions without independently applying his mind to primary facts and establishing a direct nexus or live link with alleged escapement of income.
Read Bombay HC Judgment in this case: Bombay HC Quashes Reopening Based Solely on Shah Commission Under-Invoicing Report
Reopening Based on Shah Commission Report
The underlying proceedings arose after the Shah Commission, constituted to inquire into illegal mining and trading of iron and manganese ore, reported alleged under-pricing of exports. In the lead case, the assessee’s assessment for AY 2008-09 had originally been completed under Section 143(3). The subsequent Section 148 notice relied principally on the third Shah Commission report and alleged under-invoicing, illegality of mining activity and failure to disclose fully and truly all material facts. The Assessing Officer quantified alleged escapement at Rs.116,75,46,110.
