No change of law and No new material on record: Bombay HC quashes Notice u/s 148 [Read Order]

The Bombay High Court has quashed the notice under Section 148 of the Income Tax Act 1961 as no change of law and no new material on record was found.

The assessee company D.K. Realty India Private Limited had filed its return of income for A.Y. 2017-18 . The scrutiny assessment was completed assessing loss.

In the search action in the case of Dyaneshwari Multi State Urban Cooperative Credit Society Limited, it was discovered by the Investigation wing that during F.Y. 2015-16 & F.Y. 2016-17, the assessee D.K. Realty had deposited an amount in the said Credit society. It had stated that the funds deposited to Dyaneshwari Multi State Urban Credit Society were in nature of advances for business purposes.

The Assessee was also not able to produce any kind of supporting evidence to provide as to what was the business activity.

The AO thinking that the assessee had escaped issued notice to reassess such income and also any other income chargeable to tax which has escaped assessment.

The petitioner has challenged the notice issued under section 148 of the Income Tax Act, 1961 which sought to reopen the petitioner’s assessment for the assessment year 2017-18 on the ground that income had escaped assessment

K. Shivram, on behalf of the petitioner submitted that, reopening of the assessment was nothing but a change of opinion which amounted to a review of the order of assessment which had repeatedly been held to be impermissible.

Akhileshwar Sharma, appeared for the revenue.

The Division Bench of Justice Valmiki Sa Menezes and Justice Dhiraj Singh Thakur, quashed the impugned order observing that,

“Between the date of the orders of assessment sought to be reopened and the date of forming of opinion by the Income Tax Officer nothing new has happened. There is no change. No new material has come on record. No information has been received. It is merely a fresh application of mind by the same Assessing Officer to the same set of facts.”

“Testing the facts of the present case on the touchstone of the judgments referred hereinabove, it is thus clear that the basis for reopening remains the same which was otherwise the subject matter of scrutiny by the AO during the scrutiny assessment proceedings leading to passing of the order under section 143(3) of the Act”, the Bench further observed.

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D.K. Realty India Private Limited vs Asstt. Commissioner of Income-tax , 2023 TAXSCAN (HC) 375 , Dr. K. Shivram , Mr. Rahul K. Hakani and Mr. Shashi A. Bekal , Mr. Akhileshwar Sharma and Mr.Vikas T. Khanchandani