Late Filing of Returns during Re-Assessment Only to Frustrate Time Limit: Bombay HC Upholds Proceedings [Read Order]

The High Court of Bombay at Goa has recently upheld the re-assessment proceedings by the income tax department finding that the late filing of income tax returns by the assessee was with an intention to frustrate the time limit to conclude the assessment under section 147/148 of the Income Tax Act, 1961.

The Petitioner, Hede Ferrominas Pvt. Ltd did not file any returns within 30 days despite receipt of the re-assessment notice. Almost eight months later, that is, on 03.01.2022, the Petitioner was served with a notice under Section 142(1) from ITI requiring the Petitioner to furnish accounts and documents to enable the respondents to proceed with the reassessment in terms of the notice dated 27.03.2021, which the Petitioner had not respond.

The department contended that the delayed return filed by the Petitioner was only to frustrate the time limits prescribed to the Assessing Officers for completing the assessment.

A bench of Justice M. S. Sonak & Justice Bharat P. Deshpande observed that “there are two significant circumstances based on which the Petitioner cannot expect this Court to exercise its extraordinary and discretionary jurisdiction in its favour. But, apart from these circumstances, other reasons disentitle the Petitioner from any relief in this Petition.”

“Firstly, the Petitioner did not bother to file any returns during Assessment Year 2015-16. Secondly, the Petitioner did not bother to file any response to the notice dated 27.03.2021 seeking to reopen the assessment within the time limit allowed to the Petitioner. The Petitioner filed returns only after eight months at the stage when the time limit for completing the reassessment proceedings was almost due to conclude. In these circumstances, the Assessing Officer rightly invoked the principle in Union of India V/s. Major General Madan Lal Yadav,” the Court said.

Finding that this is a matter where the explanation (2) to Section 147 of the IT Act would apply, the Court observed that “this explanation inter alia provides that where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded with a maximum amount which is not chargeable to income-tax, the same shall also be deemed to be a case where income chargeable to tax has escaped assessment.”

To Read the full text of the Order CLICK HERE

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