Loading High Court cases…
486 orders · Page 9 of 10
The High Court held that the issue of improper sanction, as decided in the case of Siemens Financial Services Private Limited, would squarely apply to the present petition concerning Assessment Year 2017-2018. In Siemens Financial Services, the Court had ruled that for Assessment Year 2016-2017, the sanction should have been granted under Section 151(ii) and not Section 151(i) of the Income Tax Act, 1961, rendering the sanction invalid. Consequently, the notice issued based on such an invalid sanction was also deemed invalid and liable to be quashed. The High Court extended this reasoning to the present case, stating that if the notice is quashed due to an incorrect sanction, any subsequent assessment order passed relying on that incorrect sanction would also have to be quashed. Therefore, all notices issued for Assessment Year 2017-2018 and the orders impugned in the petition were quashed and set aside, along with all consequential notices and orders.
The High Court disposed of the writ petitions with liberty granted to the petitioners to file a response to the notice issued under Section 148 of the Income Tax Act, 1961, and to provide further information as observed in the order passed under Section 148A(d). The Court directed that the Assessing Officer (AO) shall grant a personal hearing to the petitioners before passing any order, with at least seven working days' advance notice. The order to be passed by the AO must be a reasoned order, addressing all submissions made by the petitioners. The petitioners were given two weeks to file all other necessary documents and information related to motor vehicle purchases and time deposits with Punjab National Bank. The Court explicitly stated that it had not made any observations on the merits of the case, and all rights and contentions of the parties were kept open. The principle derived is that procedural fairness, including personal hearings and reasoned orders, is crucial in tax proceedings, especially when reassessment is initiated.
The High Court disposed of the writ petitions with liberty granted to the petitioners to file a response to the notice issued under Section 148 of the Income Tax Act, 1961, and to provide further information as observed in the order passed under Section 148A(d). The Court directed that the Assessing Officer (AO) shall grant a personal hearing to the petitioners before passing any order, with at least seven working days' advance notice. The order to be passed by the AO must be a reasoned order, addressing all submissions made by the petitioners. The petitioners were given two weeks to file all other necessary documents and information related to motor vehicle purchases and time deposits with Punjab National Bank. The Court explicitly stated that it had not made any observations on the merits of the case, and all rights and contentions of the parties were kept open. The principle derived is that procedural fairness, including personal hearings and reasoned orders, is crucial in tax proceedings, especially when reassessment is initiated.
The High Court allowed the petition, quashing the notice dated March 27, 2021, issued under Section 148 and consequential notices. The Court held that the reopening was based on a change of opinion, which is impermissible. It reasoned that when queries are raised during assessment proceedings and the assessee provides a satisfactory response, it implies the Assessing Officer has applied their mind and formed an opinion. The non-discussion or non-rejection of the assessee's response would mean the Assessing Officer accepted the assessee's view. The Court cited *Aroni Commercials Ltd. v. Assistant Commissioner of Income Tax* and *CIT v. Nirma Chemicals Ltd.* to support this view. Furthermore, the Court rejected the revenue's argument regarding excess claim under Section 35(2AB) by relying on the Apex Court's decision in *Gemini Leather Stores v. Income Tax Officer*, which held that an Assessing Officer cannot use Section 147 to remedy errors resulting from their own oversight when all material facts were available during the original assessment.
The High Court held that the storage tanks in question do not qualify as 'land' or 'building' within the meaning of Section 194I of the Act. The Court found merit in the assessee's contention that the Revenue's reliance on the Supreme Court's decision in Municipal Corporation of Greater Bombay and Ors. v. Indian Oil Corporation Ltd. was misplaced because the provisions of Sections 3(r) and 3(s) of the BMC Act, considered in that case, are not pari materia with Section 194I of the Income Tax Act. Unlike the BMC Act's broader definitions, Section 194I requires a lease, sub-lease, tenancy, or other agreement involving land or a building. The Court noted that the assessee had not taken the storage tanks on lease or sub-lease or tenancy, nor had it taken any land or building with appurtenant furniture, fittings, or land. Therefore, the payments were not liable for TDS under Section 194I. The ITAT's impugned order was upheld, and the substantial questions of law were answered in favour of the assessee. The appeals were disposed of accordingly.
The High Court held that the storage tanks in question do not qualify as 'land' or 'building' within the meaning of Section 194I of the Act. The Court found merit in the assessee's contention that the Revenue's reliance on the Supreme Court's decision in Municipal Corporation of Greater Bombay and Ors. v. Indian Oil Corporation Ltd. was misplaced because the provisions of Sections 3(r) and 3(s) of the BMC Act, considered in that case, are not pari materia with Section 194I of the Income Tax Act. Unlike the BMC Act's broader definitions, Section 194I requires a lease, sub-lease, tenancy, or other agreement involving land or a building. The Court noted that the assessee had not taken the storage tanks on lease or sub-lease or tenancy, nor had it taken any land or building with appurtenant furniture, fittings, or land. Therefore, the payments were not liable for TDS under Section 194I. The ITAT's impugned order was upheld, and the substantial questions of law were answered in favour of the assessee. The appeals were disposed of accordingly.
The High Court held that the sanction accorded by the Principal Commissioner of Income Tax (PCIT) was invalid. The court noted that the impugned order and notice, both dated April 6, 2022, pertained to Assessment Year 2018-2019 and were issued beyond the three-year period. Consequently, the sanctioning authority, as per Section 151(ii) of the Income Tax Act, 1961, should have been the Principal Chief Commissioner of Income Tax (PCCIT). The proviso to Section 151, inserted with effect from April 1, 2023, was not applicable to the present case. Following its own decision in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors., the court found the sanction to be invalid. As a result, the impugned order under Section 148A(d) and the notice under Section 148 of the Act, both dated April 6, 2022, were quashed and set aside. The petition was disposed of, with all rights and contentions kept open.
The Bombay High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, for AY 2013-2014 was issued beyond the period of limitation. The Court reasoned that the limitation period for reopening assessment for AY 2013-14 had expired on March 31, 2021. The Court found the Revenue's arguments regarding the applicability of TOLA and the interpretation of the Supreme Court's judgment in Ashish Agarwal (Supra) to be flawed. Specifically, the Court noted that the Revenue's attempt to extend the limitation period by including TOLA's extensions to the plain language of Notification No. 20 of 2021 was incorrect. The Court emphasized that the Supreme Court, in Ashish Agarwal (Supra), had expressly allowed assessees to raise all defenses available, including those under Section 149, and that accepting the Revenue's contention would render these defenses useless and be contrary to established legal principles. The Court also noted that judgments relied upon by the Revenue from other High Courts had conflicting views, with some High Courts (Gujarat and Allahabad) holding similar notices to be barred by limitation, and the Supreme Court issuing notice and staying those orders. Consequently, the Court quashed and set aside the impugned notice. The Court explicitly stated that it was not discussing other grounds of challenge raised in the petition, as the decision was based solely on the issue of limitation.
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, for AY 2013-2014 was issued beyond the period of limitation. The Court reasoned that for AY 2013-14, the time limit to issue a notice under Section 148 had expired on March 31, 2021. The assessee had a vested right that could not be taken away. The Court found the Revenue's arguments regarding the applicability of TOLA and various notifications to extend the limitation for AY 2013-14 to be flawed. The Court specifically noted that Notification No. 20 of 2021 did not apply as the limitation for AY 2013-14 had already expired on March 31, 2020, and even with TOLA, the extended period expired on March 31, 2021. The Court rejected the Revenue's reliance on the Supreme Court's powers under Article 142 in Ashish Agarwal (Supra) to override substantive rights and statutory provisions. The Court stated that the judgment in Ashish Agarwal (Supra) allowed assessees to take all available defences, including those under Section 149. Consequently, the impugned notice was quashed and set aside. The Court explicitly stated that other grounds of challenge raised in the petition were not discussed, as the decision was based solely on the issue of limitation.
The Tribunal held that the notice issued under Section 148 of the Income Tax Act, 1961, for AY 2013-2014, is barred by limitation. The Court reasoned that the time limit to issue a notice under Section 148 for AY 2013-14 had expired on April 1, 2021. Even with extensions under TOLA, the limitation period for reopening AY 2013-14 expired on March 31, 2021. The Court emphasized that the Supreme Court, in Ashish Agarwal, explicitly allowed assessees to raise all defences available, including those under Section 149. The Court found the Revenue's arguments regarding the applicability of TOLA, notifications, and the interpretation of the Ashish Agarwal judgment to be flawed and contrary to established legal principles. The Tribunal noted that accepting the Revenue's contention would render the defences available to the assessee useless and would be a travesty of justice. Consequently, the impugned notice was quashed and set aside on the ground of limitation. Other grounds raised by the petitioner were not discussed.
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, for AY 2013-14 was issued beyond the period of limitation. The Court reasoned that the time limit for issuing a notice under Section 148 for AY 2013-14 had already expired on April 1, 2021. The Court found the Revenue's arguments regarding the applicability of TOLA and the interpretation of the Supreme Court's judgment in Ashish Agarwal to be flawed. Specifically, the Court noted that the Revenue's contention that notices issued between April 1, 2021, and June 30, 2021, could be deemed to have been issued on March 31, 2021, was fallacious, as it would imply that the new reassessment law, which came into force from April 1, 2021, would not apply, contrary to the Supreme Court's directions. The Court emphasized that the Supreme Court, in exercising its powers under Article 142, had expressly granted liberty to assessees to raise all available defences, including those under Section 149. Therefore, the impugned notice was quashed and set aside on the ground of limitation. Other grounds raised in the petition were not discussed as the decision was based solely on the limitation issue.
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, for AY 2013-2014, was beyond the period of limitation. The Court reasoned that the time limit to issue such a notice for AY 2013-14 had expired on April 1, 2021. The assessee had a vested right that could not be taken away by the amended provisions. The Court found the Revenue's arguments regarding the applicability of TOLA, specific notifications, and the interpretation of the Supreme Court's judgment in 'Ashish Agarwal' to be flawed. The Court emphasized that the Supreme Court, in 'Ashish Agarwal', had expressly allowed assessees to raise all available defences, including those under Section 149. The Court concluded that accepting the Revenue's contention would render the defences available to assessees useless and be contrary to established legal principles. Therefore, the impugned notice was quashed and set aside. The Court explicitly stated that its decision was restricted to the issue of limitation and did not discuss other grounds of challenge raised by the petitioner.
The Bombay High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, for AY 2013-2014, was issued beyond the period of limitation. The Court reasoned that the limitation period for reopening assessments for AY 2013-14 had expired on March 31, 2021, even after considering the extensions provided by TOLA. The Court found the Revenue's arguments regarding the applicability of TOLA, the interpretation of notifications, and the Supreme Court's judgment in Ashish Agarwal (Supra) to be flawed. Specifically, the Court noted that the Supreme Court's order in Ashish Agarwal (Supra) explicitly allowed assessees to raise all available defenses, including those related to limitation under Section 149. The Court found that accepting the Revenue's contention would negate these express directions and be a travesty of justice. Consequently, the impugned notice was quashed and set aside. The Court explicitly stated that this decision was restricted only to the point of limitation.
The High Court refused to grant leave to appeal. The applicant's counsel conceded that there was no merit in the appeal, particularly in light of the Hon'ble Apex Court's judgment in K.C. Builders and Others v. Assistant Commissioner of Income Tax. The JMFC's acquittal was based on this precedent, and the High Court found no reason to interfere. The application for leave to appeal was therefore rejected. The operative direction was to reject the application for leave to appeal.
The High Court held that the sanction obtained for Assessment Year 2016-2017 was invalid because it was issued under Section 151(i) instead of Section 151(ii) of the Income Tax Act, 1961, as per its prior decision in Siemens Financial Services Private Limited. Consequently, the notice issued based on this improper sanction was deemed invalid and quashed. The Court reasoned that an assessment order passed relying on an incorrect sanction would also be invalid and must be quashed. Therefore, all notices, assessment orders, and consequential orders for Assessment Year 2016-2017 were quashed and set aside. The Court clarified that other grounds could be raised in future proceedings.
The High Court found that the Assessing Officer's conclusion that the assessee had not filed any objections to the proposed additions was factually incorrect. The court noted that the assessee had filed objections on 27th September 2023, supported by an acknowledgment. Consequently, the impugned assessment order dated 23rd October 2023 was quashed and set aside. The matter was remanded for de novo consideration, with a direction for a personal hearing to be provided to the petitioner at least five working days after notice. The assessment order to be passed must be a reasoned order addressing all submissions. The penalty proceedings initiated under Section 271 and the demand notice issued under Section 156 were also quashed and set aside. The court explicitly stated that no observations on the merits of the matter were made. The assessment proceedings were to be concluded by 31st May 2024.
The High Court held that the sanction for issuing the impugned notices under Section 148A(b) and orders under Section 148A(d) of the Income Tax Act, 1961, was invalid. The Court noted that the assessment year was 2018-2019, and the impugned actions were taken in 2022, which is beyond a period of three years from the assessment year. Consequently, according to Section 151(ii) of the Act, the sanctioning authority should have been the Principal Chief Commissioner of Income Tax (PCCIT). The Court clarified that the proviso to Section 151, which was inserted with effect from April 1, 2023, was not applicable to the present cases. Following its own precedent in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors., the Court quashed and set aside the impugned orders and notices. The petitions were disposed of with no order as to costs, keeping all rights and contentions open.
The High Court, in view of the statements made by the Revenue, did not grant the relief as prayed for in the petition. However, the Court directed the Assessing Officer to grant a personal hearing to the Petitioner and permit them to file necessary documents before passing an order in accordance with law. The Court explicitly clarified that no observations were made on the merits of the matter, including the Petitioner's entitlement to exemption under Section 11 of the Act. The Petitioner was also permitted to apply to the CIT(A) for expeditious hearing of their stay application and appeal against the Section 143(1) intimation. Until the disposal of the stay application or March 31, 2024, whichever was earlier, no coercive steps were to be taken for recovery of the amount mentioned in the Section 143(1) intimation. The petition was disposed of.
The High Court held that the impugned order dated 30th November 2023, giving effect to the ITAT order, was to be quashed and set aside. The Court found that the ITAT had accepted the petitioner's plea that for the assessment year in question, the petitioner's total income should be computed as 'Nil'. Therefore, the only task left for the AO was to issue a refund of all taxes paid or recovered from the petitioner for AY 2017-2018. The Court observed that the AO had unnecessarily re-opened the controversy regarding the filing of Form 10B and the eligibility for exemption under Section 11, which was not even argued before the ITAT and had been accepted in the original assessment order. The Court directed that the Principal Commissioner of Income Tax assign this work to an officer other than Mr. Meet Kumar and ensure compliance with the ITAT and High Court orders, including the refund within two weeks of passing the revised order.
The High Court held that the petition is covered by the judgment in New India Assurance Co. Ltd. v. Assistant Commissioner of Income Tax, Circle 3(2)(1), Mumbai & Ors. Consequently, the impugned order passed under Section 148A(d) of the Income Tax Act, 1961, and the notices issued under Section 148 of the Act were quashed and set aside. The operative direction was to quash and set aside the said order and notices. The court also quashed and set aside any consequential notices or orders. All other rights and contentions raised in the petitions were kept open. No issue was expressly left undecided.
The Tribunal held that the petition is covered by the judgment of New India Assurance Co. Ltd. v. Assistant Commissioner of Income Tax, Circle 3(2)(1), Mumbai & Ors. Consequently, the impugned order passed under Section 148A(d) of the Income Tax Act, 1961, and the notices issued under Section 148 of the Act in the present writ petition were quashed and set aside. The reasoning was based on the agreement between the parties that the case was squarely covered by the precedent. The operative direction was to quash and set aside the order and notices. All other rights and contentions raised in the petitions were kept open. No issue was expressly left undecided.
The High Court quashed and set aside the impugned assessment order dated 24th March 2022 and remanded the matter to the Assessing Officer (AO) for fresh adjudication. The Court held that the ITAT's finding that the revenue authorities had not conducted proper inquiry and had not examined the assessee's evidence in the correct perspective was valid. The AO is directed to examine the authenticity of the evidence submitted by the petitioner to establish that the lands sold were agricultural lands. If the AO rejects the evidence, he must bring contrary material on record and conduct an inquiry with concerned government authorities. The AO cannot reject the claim solely on the presumption that the lands were not agricultural because they were sold within two years of purchase. If the AO is satisfied that the lands are not situated in an area falling under Section 2(14)(iii), then actual carrying on of agricultural operations will not be a necessary condition. The matter was remanded to the Jurisdictional Assessing Officer (JAO) for a de novo assessment, with directions for personal hearing and providing copies of relied-upon documents to the petitioner.
The High Court held that the reopening of assessment was a clear case of change of opinion. The Court reasoned that the issue of short-term capital gain concerning the said flat was already a subject of consideration during the original assessment proceedings. The Assessing Officer had noted in the assessment order dated April 28, 2021, that the issue of investment in immovable property and capital gain/income on sale of property was considered under limited scrutiny, and no addition was made based on the material on record. The information relied upon for issuing the notice under Section 148A(b) pertained to the same flat, and the subsequent order took a contradictory view, treating the gain as short-term capital gain. The Court reiterated the settled law that once a query is raised during assessment and replied to by the assessee, it is deemed to have been considered by the Assessing Officer. Therefore, the reopening was based purely on a change of opinion, which does not constitute justification for assuming that income chargeable to tax has escaped assessment. The ratio decidendi is that reassessment proceedings initiated solely on a change of opinion, where the issue was already considered and accepted during the original assessment, are invalid.
The High Court quashed and set aside the impugned order dated 23rd July 2022 passed under Section 148A(d) of the Income Tax Act, 1961, and consequently, the notice issued under Section 148 and the assessment order. The Court found the order under Section 148A(d) unacceptable. The primary reasoning was that the Assessing Officer's allegation of cash payment was based solely on a statement from Lucina, which the petitioner categorically denied, and no documentary evidence was produced by the Revenue to substantiate this claim. The Court noted that the petitioner had only paid Rs. 10,00,000/- during the assessment year in question, and there was nothing on record to show that any amount exceeding Rs. 50,00,000/- was paid during that year. The Court also questioned the valuation of the property at Rs. 64,94,200/- when the AO's own case suggested a market value of Rs. 51,55,000/-, deeming this an attempt to circumvent Section 149(1)(b). The Court further observed that if the amount of Rs. 20,91,200/- was offered to tax by Lucina before the Settlement Commission, it should not be taxed again in the hands of the petitioner. The Court concluded that there was no tangible material to issue notices under Section 148A or Section 148. The appeal filed by the petitioner was directed to be withdrawn.
The High Court held that the decisions relied upon by the assessee were delivered in different factual circumstances and were not applicable. The Court noted that the seized documents were written by Mrs. Pauline Fernandes and related to the assessee's liaisoning business for which commission was received. The assessee admitted that only part of the entries were correct and did not deny that the entries related to his activities. The authorities below found the assessee's explanation untenable, as the nexus between payments by M/s. Dempo and the payments shown in the seized papers was not established. The assessee was unable to explain the source of funds, and the payments were not disclosed in regular returns prior to the search. The Court found no reason to interfere with the concurrent findings of the AO, CIT(A), and ITAT, stating that the claim was devoid of merit. The appeal was dismissed.
The High Court held that the sanction obtained for the Assessment Year 2016-17 was improper. Citing its own precedent in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors., the Court reiterated that for AY 2016-17, the sanction should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the Court found the sanction to be invalid. The reasoning was that an invalid sanction renders the notice issued based upon it invalid. Furthermore, if an assessment order was passed subsequently relying on such an incorrect sanction, that assessment order would also be invalid and liable to be quashed. Accordingly, all notices and orders impugned in the petition, along with any consequential notices, assessment orders, and other related orders, were quashed and set aside. The Court clarified that other grounds could be raised in appropriate proceedings.
The High Court held that the ITAT erred in dismissing the appeal. The Court found that the Income Tax Act does not stipulate that non-compliance with provisions of other Acts would result in turning a capital receipt into a revenue receipt. Even if the assessee had breached Section 78(2) of the Companies Act, 1956, it would not convert the share premium amount into a revenue receipt. The Court noted that the AO and FAA had not proven that the share premium money was utilized for day-to-day business. The assessee had demonstrated that the opening and closing balances of the share premium account were the same for the year, indicating no utilization for purposes other than collection. The Court found no foundation for the authorities' conclusion that the share premium was utilized for business purposes. The reliance on T.V. Sundaram Iyengar & Sons Ltd. was deemed misplaced. The Court reversed the orders of the FAA and ITAT, answering the substantial question of law in the affirmative. The appeals were disposed of accordingly.
The High Court held that the Tribunal was not justified in holding that the appellant was not entitled to interest under Section 244A(1)(a). The Court found that the Revenue's interpretation of the proviso to Section 244A(1)(a), which excluded self-assessment tax and considered only the advance tax/TDS component for the 10% threshold, was incorrect. The Court reasoned that the proviso refers to the refund on the basis of tax determined under Section 143(1) or regular assessment, which necessarily includes all taxes paid, including advance tax, TDS, and self-assessment tax. The Court emphasized that the amended law, particularly after April 1, 1989, as interpreted by the Supreme Court in Tata Chemicals Ltd., entitles the assessee to interest on advance tax (including TDS) from the first day of the assessment year. The Court also distinguished the case of Modi Industries Ltd. as dealing with the old law. The Court concluded that the assessee was entitled to interest under Section 244A of Rs.2,37,22,886/-. The appeal was allowed.
The High Court held that the Tribunal erred in dismissing the appeal and directing the AO to examine the violation of Section 78(2) of the Companies Act, 1956. The Court reasoned that the Income Tax Act does not stipulate that non-compliance with provisions of other Acts would result in a capital receipt being treated as a revenue receipt. Even if there was a breach of Section 78(2) of the Companies Act, 1956, it would not convert the share premium amount into a revenue receipt. The Court found that the AO and FAA had brought far-fetched ideas and had not understood the basic philosophy of income. The assessee had demonstrated that the opening and closing balances of the share premium account were the same, indicating no utilization for purposes other than collection. The reliance on T.V. Sundaram Iyengar & Sons Ltd. by the FAA was deemed misplaced. The Court concluded that the share premium money was not utilized for purposes other than prescribed and that the closing and opening balances indicated an increase, not depletion. The appeals were allowed, and the impugned orders were quashed and set aside. The question of law was answered in the affirmative.
The High Court did not entertain the writ petition, holding that the petitioner has an alternate and efficacious remedy of appeal under the Income Tax Act. The Court noted that there was no clarity on whether the petitioner had informed the tax authorities about their change of address. Therefore, it was not a clear case of 'no notice'. The Court deemed it appropriate for the appellate authority to examine the factual aspects of the case, including the contention about the notice and the merits of the assessment. The Court expressly kept open the contentions regarding 'no notice' or 'inadequate notice' and the contentions on merits for determination by the appellate authority. The petition was disposed of with liberty to the petitioner to avail the alternate remedy of appeal.
The High Court allowed the writ petition. It held that the impugned order dated 16.10.2018, rejecting the petitioner's application under Section 119(2)(b) of the Income Tax Act, 1961, was set aside. The Court directed the respondent authorities to accept the Income Tax Return of the petitioner Sanstha for the Assessment Year 2013-2014. The reasoning was based on the fact that the petitioner had filed returns for other years within time, the delay was attributed to an accountant who admitted fault, and the income declared and refund claimed had been assessed as correct. The Court found that a liberal view ought to have been taken by the respondent No.1. Considering the petitioner is a Majoor Sanstha, the Court imposed a limited cost of Rs. 10,000/- to be deposited with the Library of the Advocate’s Association of Bombay High Court, Bench at Aurangabad.
The High Court held that the notice dated March 31, 2021, issued under Section 148 of the Income Tax Act, 1961, for AY 2015-16, was invalid. The Court found that the reasons for reopening were based on the records filed by the Petitioner with its return of income and that the issues involved were examined during the original assessment. This constituted a clear case of change of opinion, which does not justify reopening. The Court relied on the Apex Court's decisions in Gemini Leather Stores v. ITO and Calcutta Discount Co. Ltd. v. ITO, stating that an assessment cannot be reopened due to an omission or failure to disclose material facts when the Assessing Officer had the material facts before him. The duty of the assessee extends only to the full and truthful disclosure of primary facts, not to draw inferences for the Assessing Officer. Since there was no failure on the part of the assessee to truly and fully disclose primary facts, the Rule was made absolute, and the petition was allowed. The notice dated March 31, 2021, and subsequent consequential orders were quashed and set aside.
The High Court held that Section 148 of the Income Tax Act permits an assessee to raise all issues at the time of hearing. Citing the pronouncement of the Hon'ble Supreme Court in Anshul Jain (supra), the Court directed that the Respondents shall follow the due procedure laid down in law and ensure that the Petitioner is extended an adequate and reasonable opportunity to contest the notice under Section 148, as is permissible in law. The Court explicitly stated that all contentions of the parties are kept open. The judgment did not decide the merits of the alleged escapement of income but focused on the procedural fairness in issuing the notice and order under Section 148-A. The operative direction was to ensure a fair opportunity for the assessee to contest the subsequent proceedings. No issue was expressly left undecided, but the substantive issues regarding tax evasion were deferred.
The High Court held that the petition was covered by the judgment in New India Assurance Co. Ltd. V/s Assistant Commissioner of Income Tax, Circle 3(2)(1), Mumbai & Ors. Consequently, the impugned orders passed under Section 148A(d) of the Income Tax Act, 1961, and the notices issued under Section 148 of the Act were quashed and set aside. Consequential notices or orders, if any, were also quashed and set aside. The court explicitly stated that all other rights and contentions raised in the petition were kept open. The ratio decidendi is that if a matter is covered by a binding precedent, the authorities should follow it, and the court will grant relief accordingly. The operative direction was to quash and set aside the impugned orders and notices.
The High Court held that the notice dated March 28, 2014, issued under Section 148 of the Income Tax Act, 1961, for reopening the assessment for Assessment Year 2007-2008, was invalid. The Court found that the reasons recorded by the Assessing Officer did not establish a "reason to believe" that income chargeable to tax had escaped assessment. The Court reasoned that the Settlement Commission's findings were primarily for customs duty purposes and based on commercial expediency, not a conclusive determination of income escaping assessment for income tax. The Court distinguished the reliance placed by the revenue on Sri Krishna Pvt. Ltd., clarifying that case records could be used to verify facts within the reasons, not to supplement them. The Court concluded that no prudent person could have formed a reasonable belief that income had escaped assessment based on the provided reasons. Consequently, the notice under Section 148 and the order rejecting objections were set aside. In Writ Petition No. 261 of 2016, the Court also noted that the proviso to Section 147 would apply, requiring failure to disclose material facts, which was not alleged in the reasons recorded.
The High Court held that the notice dated March 28, 2014, issued under Section 148 of the Income Tax Act, 1961, for reopening the assessment for Assessment Year 2007-2008, was invalid. The Court found that the reasons recorded by the Assessing Officer did not provide a prudent person with a reasonable belief that income had escaped assessment. The Court distinguished the reliance placed by the revenue on Sri Krishna Pvt. Ltd., stating that case records can be called to verify facts mentioned in the reasons, but not to supplement the reasons to justify reopening. The Court also noted that in Writ Petition No. 261 of 2016, there was no allegation of failure to truly and fully disclose material facts, which is a prerequisite for reopening after four years when an assessment under Section 143(3) has been completed. Consequently, the notice under Section 148 and the order rejecting objections were set aside. The Court allowed the petitions, quashing the reassessment proceedings.
The High Court held that the notice dated March 28, 2014, issued under Section 148 of the Income Tax Act, 1961, and the subsequent order dated September 29, 2015, rejecting the assessee's objections, were unsustainable. The Court found that the reasons recorded by the Assessing Officer (AO) did not provide a reasonable basis for believing that income chargeable to tax had escaped assessment. The Settlement Commission's order, which was based on commercial expediency to avoid prolonged litigation and protect business reputation, did not, in itself, constitute a 'reason to believe' that income had escaped assessment under Section 147. The Court emphasized that the AO must have a tangible belief based on material, and the Settlement Commission's findings regarding customs valuation did not automatically translate to escapement of income for income tax purposes. The Court also noted that in Writ Petition No. 261 of 2016, the notice was issued after four years from the end of the relevant assessment year, and there was no allegation of failure to disclose material facts, making the proviso to Section 147 applicable and further invalidating the reopening. The ratio is that the settlement of a customs duty dispute, especially when based on commercial expediency, does not automatically create a 'reason to believe' for income tax reassessment without independent material indicating escapement of income. The petition was allowed, setting aside the notice and the order.
The High Court held that the Rule issued in the petition is made absolute. The Court quashed and set aside the notice dated March 29, 2014, issued under Section 148 of the Act for reopening the assessment for AY 2009-10, and the order dated February 2, 2015, rejecting the petitioner's objections. The Court reasoned that the AO's belief that income had escaped assessment was based on the premise that share premium is taxable. However, the Court noted that the receipt of share premium is on capital account and cannot be subjected to tax as income, a position supported by the decision in Vodafone India Services Pvt. Ltd. vs. Union of India and Central Board Circular No. 2 dated January 29, 2015. Furthermore, the amendments to Sections 2(24)(xvi), 56(2)(viib), and Section 68 of the Act, which could have provided a basis for taxing share premium, were not applicable to AY 2009-10 as they were effective from April 1, 2013, or later. The Court also found that the AO's reasons for reopening were hypothetical and conjectural, lacking tangible material, and that the notice was issued on 'borrowed satisfaction' from superior officers, breaching the jurisdictional requirement of Section 147. The Court explicitly stated that the AO was only questioning the excessive share premium but not doubting the transaction itself.
The High Court held that the notice dated March 27, 2021, issued under Section 148 of the Income Tax Act, 1961, for AY 2015-16, was invalid. The Court found that since the notice was issued more than four years after the expiry of the assessment year, the proviso to Section 147 of the Act was applicable. This proviso mandates that reassessment is not permissible unless there has been a failure to truly and fully disclose necessary facts. The Court observed that the reasons recorded for reopening were based on a perusal of the records filed by the Petitioner, and there was no allegation of failure to disclose material facts. The Court noted that the Assessing Officer had access to all primary facts, and it was for him to draw inferences. The Court relied on the principle that an assessee's duty is to disclose primary facts, and once disclosed, the Assessing Officer must consider them. The Court concluded that the reopening was based on a change of opinion, which does not constitute justification for reassessment beyond four years. The Court cited DIL Ltd. v. Assistant Commissioner of Income Tax to support its reasoning. Consequently, the Rule was made absolute, and the petition was allowed, quashing the impugned notice and order.
The High Court held that the reopening of the assessment for AY 2008-09 could not be sustained. The Court agreed with the assessee that if the basis for reopening was the assessment order for AY 2010-2011, and that order was set aside by the CIT(A) with the Revenue accepting it, then there was no tangible material to reopen the assessment for AY 2008-2009. Furthermore, the Court noted a previous decision of the High Court in ITXA No.622 of 2010, which held that prior period expenses were allowable, even when the assessee followed the mercantile system of accounting. The Court also observed that the Revenue's affidavit in reply did not specifically deny the averments in the petition, except for obtaining prior permission. Consequently, the Rule issued was made absolute, quashing the reassessment proceedings.
The Bombay High Court, by agreement of both the petitioners and the respondents-Revenue, held that all the petitions were covered by the decision in *New India Assurance Co. Ltd. V/s Assistant Commissioner of Income Tax, Circle 3(2)(1), Mumbai & Ors.* Consequently, the impugned orders passed under Section 148A(d) of the Income Tax Act, 1961, and the notices issued under Section 148 of the Act in each of the respective petitions were quashed and set aside. Any consequential notices or orders were also quashed and set aside. The court explicitly stated that all other rights and contentions raised in the petitions were kept open. The ratio decidendi is that if a set of petitions are demonstrably covered by a prior High Court judgment, and both parties agree, the impugned notices and orders should be set aside in line with that precedent.
The Bombay High Court held that all the writ petitions would be covered by the judgment in New India Assurance Co. Ltd. V/s Assistant Commissioner of Income Tax, Circle 3(2)(1), Mumbai & Ors. Consequently, the impugned orders passed under Section 148A(d) of the Income Tax Act, 1961, and the notices issued under Section 148 of the Act in the respective petitions were quashed and set aside. Consequential notices or orders, if any, were also quashed and set aside. The Court explicitly kept open all other rights and contentions raised in the petitions. The ratio decidendi is that if a set of petitions are demonstrably covered by a prior High Court judgment on similar issues concerning Section 148A and Section 148 notices, the High Court will follow that precedent and grant relief accordingly.
The Bombay High Court held that all the writ petitions would be covered by the judgment in New India Assurance Co. Ltd. V/s Assistant Commissioner of Income Tax, Circle 3(2)(1), Mumbai & Ors. Consequently, the impugned orders passed under Section 148A(d) of the Income Tax Act, 1961, and the notices issued under Section 148 of the Act in the respective petitions were quashed and set aside. Any consequential notices or orders were also quashed and set aside. The court also kept open all other rights and contentions raised in the petitions. The ratio decidendi is that if a set of petitions are demonstrably covered by a precedent, the court will apply that precedent to dispose of the matters, quashing the impugned actions.
The High Court held that all the writ petitions would be covered by the judgment in *New India Assurance Co. Ltd. V/s Assistant Commissioner of Income Tax, Circle 3(2)(1), Mumbai & Ors.* Consequently, the impugned orders passed under Section 148A(d) of the Income Tax Act, 1961, and the notices issued under Section 148 of the Act in the respective petitions were quashed and set aside. Any consequential notices or orders were also quashed and set aside. The court explicitly stated that all other rights and contentions raised in the petitions were kept open. The ratio is that if a set of petitions are demonstrably covered by a precedent, the court will apply that precedent to dispose of the matters.
The High Court held that all the writ petitions would be covered by the judgment in *New India Assurance Co. Ltd. V/s Assistant Commissioner of Income Tax, Circle 3(2)(1), Mumbai & Ors.* Consequently, the impugned orders passed under Section 148A(d) of the Income Tax Act, 1961, and the notices issued under Section 148 of the Act in the respective petitions were quashed and set aside. Any consequential notices or orders were also quashed and set aside. The court explicitly stated that all other rights and contentions raised in the petitions were kept open. The ratio is that if a set of petitions are demonstrably covered by a precedent, the court will apply that precedent to dispose of the matters.
The High Court held that all the writ petitions would be covered by the judgment in *New India Assurance Co. Ltd. V/s Assistant Commissioner of Income Tax, Circle 3(2)(1), Mumbai & Ors.* Consequently, the impugned orders passed under Section 148A(d) of the Income Tax Act, 1961, and the notices issued under Section 148 of the Act in the respective petitions were quashed and set aside. Any consequential notices or orders were also quashed and set aside. The court explicitly stated that all other rights and contentions raised in the petitions were kept open. The ratio is that if a set of petitions are demonstrably covered by a precedent, the court will apply that precedent to dispose of the matters.
The High Court held that all the writ petitions would be covered by the judgment in *New India Assurance Co. Ltd. V/s Assistant Commissioner of Income Tax, Circle 3(2)(1), Mumbai & Ors.* Consequently, the impugned orders passed under Section 148A(d) of the Income Tax Act, 1961, and the notices issued under Section 148 of the Act in the respective petitions were quashed and set aside. Any consequential notices or orders were also quashed and set aside. The court explicitly stated that all other rights and contentions raised in the petitions were kept open. The ratio is that if a set of petitions are demonstrably covered by a precedent, the court will apply that precedent to dispose of the matters.
The High Court held that all the writ petitions would be covered by the judgment in *New India Assurance Co. Ltd. V/s Assistant Commissioner of Income Tax, Circle 3(2)(1), Mumbai & Ors.* Consequently, the impugned orders passed under Section 148A(d) of the Income Tax Act, 1961, and the notices issued under Section 148 of the Act in the respective petitions were quashed and set aside. Any consequential notices or orders were also quashed and set aside. The court explicitly stated that all other rights and contentions raised in the petitions were kept open. The ratio is that if a set of petitions are demonstrably covered by a precedent, the court will apply that precedent to dispose of the matters.
The High Court held that all the writ petitions would be covered by the judgment in *New India Assurance Co. Ltd. V/s Assistant Commissioner of Income Tax, Circle 3(2)(1), Mumbai & Ors.* Consequently, the impugned orders passed under Section 148A(d) of the Income Tax Act, 1961, and the notices issued under Section 148 of the Act in the respective petitions were quashed and set aside. Any consequential notices or orders were also quashed and set aside. The court explicitly stated that all other rights and contentions raised in the petitions were kept open. The ratio is that if a set of petitions are demonstrably covered by a precedent, the court will apply that precedent to dispose of the matters.
The High Court held that all the writ petitions would be covered by the judgment in *New India Assurance Co. Ltd. V/s Assistant Commissioner of Income Tax, Circle 3(2)(1), Mumbai & Ors.* Consequently, the impugned orders passed under Section 148A(d) of the Income Tax Act, 1961, and the notices issued under Section 148 of the Act in the respective petitions were quashed and set aside. Any consequential notices or orders were also quashed and set aside. The court explicitly stated that all other rights and contentions raised in the petitions were kept open. The ratio is that if a set of petitions are demonstrably covered by a precedent, the court will apply that precedent to dispose of the matters.