Ats Infrastructure Limited Vs ACIT (Delhi High Court)
Delhi High Court held that validity of initiation of reassessment u/s. 147 and 148 of the Income Tax Act must be independently evaluated. It cannot be confused with the power that could ultimately be available in the hands of the AO and which could be invoked once an assessment has been validly reopened.
Facts- The department issued notice u/s. 148A(b) of the Income Tax Act, 1961, alleging that the petitioner had received loan from its 100% subsidiary i.e., Gul Properties Pvt. Ltd.
However, the order dated 07.2022 was passed u/s. 148A(d) of the Act, on a different course altogether i.e., that the petitioner has not been able to completely explain the source of the money, which was used to repay a part of the loan. Accordingly, AO treated amount paid towards loan to the tune of 25,53,42,435/- as income escaped assessment.
Conclusion- Held that the enunciation with respect to the indelible connection between Section 148A(b) and Section 148 A(d) of the Act are clearly not impacted by Explanation 3. As we read Sections 147 and 148 of the Act, we come to the firm conclusion that the subject of validity of initiation of reassessment would have to be independently evaluated and cannot be confused with the power that could ultimately be available in the hands of the AO and which could be invoked once an assessment has been validly reopened.
