The Bombay High Court in the case Ashraf Chitalwala Versus DCIT observed and has quashed the reassessment order based on a change of opinion without surfacing any tangible new information.
The bench comprising of Justice K. R. Shriram and Justice N. K. Gokhale in the case observed that the petitioner has fully and truly disclosed all material facts which are necessary for the purpose of assessment. Thus, the Assessing Officer, AO issued the first assessment order after carefully scrutinising the material furnished by the petitioner and the respondent department in the case has failed to furnish any reasons for reopening as it is mandated by law. There being not even a whisper in the entire communication trail as to what was not disclosed before the court.
In the present case, the petitioner or assessee assailed a notice issued by the Deputy Commissioner of Income Tax under Section 148 of the Income Tax Act 1961b wherein seeking to reopen the assessment for the assessment year 2015-2016, order dated 24.03.2022.
The petitioner in the plea seeks an order restraining the respondents from taking any action pursuant to the assailed orders.
The petitioner in the plea contended before the court that there was no failure on the part of the petitioner in order to disclose truly and fully material facts. Therefore, the reassessment is purely on the basis of a change of opinion. There being no new tangible material. Thus, there is no income that has escaped assessment.
The court issued the notice under Section 148 after the expiration of four years, so the first proviso to Section 147 shall apply.
It has also been contended by the department before the court that the petitioner had not made a full and true disclosure. Thus, the Assessing Officer, AO is well within his rights in order to reopen the subject assessment.
The court in the case observed that it being the settled law that the reasons for reopening an assessment can be tested and examined only on the basis of the reasons recorded at the time of issuing the notice under Section 148 and the department has not even placed on record any document to suggest that the reasons recorded have been furnished to the petitioner. Accordingly, the court quashed the impugned assessment order.
The counsel, Dharan Gandhi appeared for the petitioner. The counsel, Swapna Gokhale represented the respondent.
