The Delhi High Court held that reassessment proceedings under the Income Tax Act, 1961 cannot be triggered qua aspects which the Assessing Officer (AO) already formed an opinion on.
The petitioner/assessee Basic Clothing Private Limited claimed that there has been a change of opinion since the allegations based on which the reassessment proceedings had been commenced were the subject matters of the assessment order dated 31.03.2022, passed under Section 147 read with Sections 144 and 144B of the Income Tax Act.
The record showed that the petitioner/assessee had filed a reply to the said notice dated 16.12.2021, issued under Section 142(1) of the Act as well as the Show Cause Notice (SCN) dated 27.03.2022, proposing variation in the income. It is also not disputed that since the petitioner/assessee had sought a personal hearing, the same was granted by the Assessing Officer (AO).
It was only thereafter that the AO passed the assessment order dated 31.03.2022, under Section 147 read with Sections 144 and 144B of the Act. The respondents/revenue sought to take advantage of the new regime which had kicked in by the Finance Act, 2021, by issuing a notice dated 02.06.2022, under Section 148A(b) of the Act.
A perusal of this notice would show that the AO referred to the notice dated 31.03.2021, issued under Section 148 of the Act under the old regime. The AO missed the fact that the assessment proceedings already stood concluded on 31.03.2022, about various aspects emanating from the petitioner/assessee’s return of income, including the aspects which were the subject matter of the notice dated 02.06.2022, issued under Section 148A(b) of the Act.
The assessee was provided with the information/material relied upon by this office letter dated 02.06.2022 to furnish a reply within two weeks i.e. by 16.06.2022 regarding why reassessment u/s 147 of the I.T. Act shall not be made in its case based on information which suggests that income chargeable to tax has escaped assessment in this case.
Clearly, a perusal of the aforesaid extract of the assessment order and the extract of the notice issued under Section 142(1) of the Act would show that the same set of allegations were made against the petitioner/assessee, which were the subject matters of the assessment order dated 31.03.2022.
“The new regime has not veered away from the well-established principle that the re-assessment proceedings cannot be triggered qua aspects vis-a-vis which the AO has already formed an opinion.”, Justice Rajiv Shakdher Justice Girish Kathpalia observed.
The Court set aside the notice issued under Section 148A(b) and the impugned order passed under Section 148A(d) of the Income Tax Act, 1961.
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