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In the given case, the Petitioner who is a regular income tax assessee filed her return of income for the AY 2011-12. The Assessing Officer issued under section 133(6) of the Act, called for certain information from the assessee.
Approval given by approving authority for reopening of assessment u/s 147 of the Income Tax Act, 1961 was without due application of mind and in mechanical manner – reassessment should be quashed.
Arun Munshaw HUF Vs ITO (Gujarat High Court) Thus, having regard to the position of law and the materials emerging from the record of the case, it cannot be said that there was no full and true disclosure at the end of the assessee of the material facts. In such circumstances, it could be said […]
Mere participation in proceedings or acquiescence would not confer jurisdiction upon AO who otherwise was not the AO of assessee, therefore, notice issued under section 148 was quashed and since reopening was quashed, subsequent orders passed on account of such reopening were also quashed.
The issue under consideration is whether the re-opening of assessement u/s 147 is justified in law?
The Gujarat High Court set aside Reassessment Notice issued to the amalgamated company which ceased to exist after approval of the composite scheme of arrangement.
The question that arises for consideration is where there is no new material brought on record by the Assessing subsequent to completion of original proceedings u/s 143(3) and where the matter was duly examined during the original assessment proceedings, whether the Assessing officer can still acquire jurisdiction by exercising powers u/s 147 of the Act.
Re-assessment even if in case where return was not scrutinized before the income chargeable to tax had escaped before acceptance originally could not be made unless AO has reason to believe that the income chargeable to tax had escaped, therefore, for mere verification or for fishing inquiry, reopening of assessment was not permissible.
Documentation can play a pivotal role in ensuring correct tax impact. It reduces great amount of time and energy of the company, advisors, auditors and most importantly the judiciary system.
In the present case the approving authority has given approval to the reopening of assessment in a mechanical manner without due application of mind by only mentioning in Column No. 12 ‘YES’, in the Reasons for Initiating Proceedings u/s. 147 and For obtaining the Approval of the Addl. Commissioner of Income Tax. On this count the reassessment is not sustainable in the eyes of law and needs to be quashed.
