Basic Clothing Private Limited Vs ITO (Delhi High Court)
Delhi High Court held that it is settled legal position that re-assessment proceedings under section 148 of the Income Tax Act cannot be triggered on the aspects which AO has already formed an opinion. Accordingly, notice issued u/s 148 set aside.
Facts- Vide the present writ petition, the petitioner/assessee claims that there has been a change of opinion inasmuch as the allegations based on which the reassessment proceedings having been commenced were the subject matters of the assessment order dated 31.03.2022, passed u/s. 147 read with Sections 144 and 144B of the Act.
The respondents/revenue sought to take advantage of the new regime which had kicked in by virtue of the Finance Act, 2021, by issuing a notice dated 02.06.2022, u/s. 148A(b) of the Act. A perusal of this notice would show that the AO referred to the notice dated 31.03.2021, issued u/s. 148 of the Act under the old regime.
Conclusion- Held that the new regime has not veered away from the well-established principle that the re-assessment proceedings cannot be triggered qua aspects vis-a-vis which the AO has already formed an opinion. Accordingly, the notice dated 02.06.2022 issued under Section 148A(b), the impugned order dated 29.07.2022 passed under Section 148A(d) and the consequent notice of even date i.e., 29.07.2022 issued under Section 148 of the Act are set aside.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This writ petition concerns Assessment Year (AY) 2014-15.
2. The notice in this petition was issued on 30.11.2022, which was made returnable on 17.02.2023.
2.1 Via the said order, the respondents/revenue were granted two weeks to file a counter-affidavit in the matter.
2.2 In the interregnum, a direction was issued that there will be a stay on the continuation of the reassessment proceedings triggered against the petitioner/assessee via the impugned notice dated 29.07.2022, issued under Section 148 of the Income Tax Act, 1961 [in short, “Act”].
3. On 17.02.2023, once again a request was made on behalf of the respondents/revenue for grant of time to file a counter-affidavit in the matter.
3.1 The request was acceded to and further four weeks were granted to the respondents/revenue to file a counter-affidavit in the matter.
3.2 However, the interim order dated 30.11.2022 was made absolute and consequently, the interlocutory application i.e., CM Appl.51688/2022 was disposed of.
4. It against this backdrop that the matter was listed today i.e., on 09.2023.
5. We find that the respondents/revenue have not filed a counter-affidavit in the matter.
5.1 We see no reason to grant any further time.
6. The case of the petitioner/assessee falls in a very narrow compass.
7. The petitioner/assessee claims that there has been a change of opinion inasmuch as the allegations based on which the reassessment proceedings having been commenced were the subject matters of the assessment order dated 31.03.2022, passed under Section 147 read with Sections 144 and 144B of the Act.
7.1 It has, therefore, become relevant for us to note as to what exactly were the allegations made qua the petitioner/assessee before the order dated 31.03.2022 was passed.
7.2 The clue with regard to the same is provided in the notice dated 16.12.2021, issued under Section 142(1) of the Act.
7.3 For convenience, the relevant part of the Annexure appended to the said notice is extracted hereafter:
“1 Detailed note on nature of business during the period 01-04-2013 to 31-03-2014.
2. Furnish the bank statement of all banks relating to the period 01-04- 2013 to 31-03-2014.
3. The Department has the following transaction information that has been made during F. V. 2013-1 4 in your case.
