In its latest ruling, the Supreme Court granted relief to Adani Power Rajasthan Ltd. from Income Tax Reassessment due to a delay in filing the Special Leave Petition.
In this case, the department has approached the Supreme Court under Article 136 of the Constitution against the order of the Gujarat High Court. The High Court had ruled in favour of the assessee, Adani Power Ltd., and quashed the reassessment notice under Section 148 of the Income Tax Act, 1961, due to lack of application of mind and lack of tangible evidence.
The issue raised by the petitioner in the High Court was whether the reassessment proceedings initiated by the tax authorities under Section 148 of the Income Tax Act were justified when the original assessment had already been concluded without any additions or disallowances. This case pertains to the assessment year ( AY ) 2017-18
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The High Court in this case ruled that the opening of the assessment was due to a change of opinion, and there was a lack of application on the part of the assessing officer while passing the impugned order as well as while disposing of the objections filed by the assessee.
The HC bench observed that the department is attempting to adopt a different stance in the absence of any physical evidence, including the tax audit report that is included in the assessment records.
The High Court bench noted that reassessment cannot be a mechanical exercise based on audit objections and held that the tax authorities failed to provide adequate justification for reopening the assessment.
The Supreme Court, comprising Justice Dipankar Datta and Justice Prashnat Kumar Mishra noted that the special leave petition was barred by a 437-day delay.
The Supreme Court dismissed the special leave petition as it was time-barred.
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