The Karnataka High Court quashed a reassessment notice issued under the Income Tax Act, 1961, and observed that the reassessment proceedings cannot be in the nature of review.
The petitioner, EIT Services India Private Limited, has filed three Writ Petitions before the Court. The petitioner who is common in all these Writ Petitions has sought to challenge the re-assessment proceedings initiated pursuant to the notice issued under Section 148 read with Section 147 of the Income Tax Act, 1961.
After notice was issued under Section 148 of the Income Tax Act for reassessment and upon request, reasons for reopening assessment were communicated, it is made out in the order that during the course of scrutiny proceedings conducted for Assessment Year 2008-2009, documents in the nature of MSAs, Work contracts, Invoices have come forth.
The deductions sought for could fall within the scope of Section 10A of the Income Tax Act, which however is a determination to be made on merits while this court is only considering as to whether the Assessing Officer has applied his mind to the issue of deduction under Section 10A of the Income Tax Act, whether the assessee has made true and full disclosure of relevant primary facts.
A Single Bench of Justice S Sunil Dutt Yadav observed that “Accordingly, the conclusion arrived at by the Assessing Officer for the Assessment Years 2005-2006, 2006-2007 and 2007-2008, when examined from the point of view of the Circular would strengthen the case of upholding deduction under Section 10A of the I.T. Act and would indicate that the resort to a review by recourse to Section 148 of the Income Tax Act in the guise of reassessment would be a futile exercise.”
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