The Gujarat High Court has held that reopening of assessment alleging income escapement even after verification of relevant material is not valid.
Gujarat Natural Resources Limited, the petitioner challenged the notice dated 26.3.2018 issued by the Assessing Officer under section 148 of the Income Tax Act, 1961 for the Assessment Year 2011-2012 seeking to re-open the assessment. It is stated in the notice that the Assessing Officer had reasons to believe that income chargeable to tax for the year under consideration had escaped assessment within the meaning of section 147 of the Income Tax Act, 1961 ( ‘the Act).
The petitioner engaged in the business of trading in oil products, filed its return of income for the assessment year 2011-2012 on 30.09.2011 declaring a total income of Rs. 5,02,820/-. The Assessing Officer issued a notice under section 143(2) dated 2.8.2012 and thereafter the assessment order under section 143(3) came to be passed on 28.2.2014. It was thereafter that the petitioner received a notice dated 26.3.2018 under section 148 of the Act.
The reasons for re-opening were supplied to the petitioner was stated inter alia that the office of the Assessing Officer had received information from the investigating wing that the petitioner company had received large funds to the tune of Rs. 2.37 crores from different persons and entities
It was observed by the HC that the assessee had supplied all the relevant material like accounting entries, the resolution passed, names of the allottees and their addresses and PAN numbers, which had satisfied the Assessing Officer at the relevant time about the genuineness of the entities and the transactions. There was no reason to doubt the same at the subsequent juncture by seeking further inquiry based on changed opinion.
Justice N V Anjaria and Justice Bhargav D Karia allowed the petition and set aside the impugned notice dated 26.3.2018 issued under section 148 of the Income Tax Act, 1961 seeking to reopen the assessment in respect of the assessment year 2011-2012.
The Gujarat High Court(HC) has held that reopening of assessment alleging income escapement even after verification of relevant material is not valid.
Gujarat Natural Resources Limited, the petitioner challenged the notice dated 26.3.2018 issued by the Assessing Officer under section 148 of the Income Tax Act, 1961 for the Assessment Year 2011-2012 seeking to re-open the assessment. It is stated in the notice that the Assessing Officer had reasons to believe that income chargeable to tax for the year under consideration had escaped assessment within the meaning of section 147 of the Income Tax Act, 1961 ( ‘the Act).
The petitioner engaged in the business of trading in oil products, filed its return of income for the assessment year 2011-2012 on 30.09.2011 declaring a total income of Rs. 5,02,820/-. The Assessing Officer issued a notice under section 143(2) dated 2.8.2012 and thereafter the assessment order under section 143(3) came to be passed on 28.2.2014. It was thereafter that the petitioner received a notice dated 26.3.2018 under section 148 of the Act.
The reasons for re-opening were supplied to the petitioner was stated inter alia that the office of the Assessing Officer had received information from the investigating wing that the petitioner company had received large funds to the tune of Rs. 2.37 crores from different persons and entities
It was observed by the HC that the assessee had supplied all the relevant material like accounting entries, the resolution passed, names of the allottees and their addresses and PAN numbers, which had satisfied the Assessing Officer at the relevant time about the genuineness of the entities and the transactions. There was no reason to doubt the same at the subsequent juncture by seeking further inquiry based on changed opinion.
Justice N V Anjaria and Justice Bhargav D Karia allowed the petition and set aside the impugned notice dated 26.3.2018 issued under section 148 of the Income Tax Act, 1961 seeking to reopen the assessment in respect of the assessment year 2011-2012.
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