The Bombay High Court in the case M/s. Aditi Constructions Versus Deputy Commissioner of Income Tax observed and has held that the onus lies on the AO in order to provide reasons to disbelieve the bank statements and to support the documents for the reopening of the assessment.
The bench comprising of Justice Dhiraj Singh Thakur and Justice Kamal Khata in the case observed and has stated that the Assessment Officer in the case observed and has acted in excess of the limit of his jurisdiction in order to reopen the assessment in the exercise of powers as stated under Section 147 reading with Section 148 of the Income Tax Act.
In the present case, the petitioner was being selected for the scrutiny and the notice was issued by the court with regards to the notice the questionnaire wherein seeking details regarding the loans and the advances of secured and unsecured loans with names and address details, the interest payment, the loan confirmation details of unsecured loans and the details of the source and capacity of the creditor, the complete address of the creditor with PAN, and bank statements were being sought. Thus, all the queries were unanswered with specifics and supporting documents. The said court passed an assessment order.
Further, the respondent in the case issued a notice after four years in order to reopen the assessment, wherein the letter was being responded to by a letter dated 08.04.2015.
In the said case, the plea has been filed in order to raise its objection and has pointed out that all material facts were fully and truly disclosed in the original assessment and the original assessment which was being completed and no fresh or tangible material for re-opening was being found beyond 4 years. Thus, the said reopening is based on a mere change of opinion; information, which was the basis for the reasons recorded and the same was not being made available.
It has also been contended by the respondent in the case that the petitioner in the case has failed to ‘fully and truly’ in order to disclose material facts in the original assessment. Therefore, it has also been urged by the department that the department only make out a ‘prima facie case’ which being on the basis of which the case can be reopen by the department, and the ‘sufficiency and correctness’ of the material were not things to be considered at the initial stage.
Further, the court in the case observed and has held that there being no tangible material mentioned in the recorded reasons to conclude that income had escaped assessment, and the nature of the information was also not being disclosed before the court.
The counsel, Rucha Vaidya appeared for the petitioner.
The counsel, Suresh Kumar represented
the respondent.
