The Gujarat High Court in the case Axis Bank Limited Versus Assistant Commissioner Of Income Tax observed and has quashed the reassessment against Axis Bank and has held that the reopening is not being permissible merely on the basis of the change of opinion.
The division bench headed by Justice Ashutosh Shastri and Justice J. C. Doshi in the case observed and has stated that the action of the department in reopening the assessment is not being justified as the same would be tantamount to a mere change of opinion, the same is not being permissible, as the conditions are not being satisfied that have been retained as stated under Section 147 of the Act.
In the present case, the petitioner, Axis Bank being a private sector bank and limited company, and some of the shareholders are citizens of India. Therefore, the petitioner bank filed its original return of income for Assessment Year 2015-2016 and has later revised return of income. Thus, the respondent authority processed the return of income and the case of the petitioner was selected for limited scrutiny.
It has also been informed by the assessing officer to the petitioners petitioner’s bank that the case of the petitioner has been converted from limited scrutiny into complete scrutiny, wherein the assessing officer has assumed unrestricted power to verify or deal with any issue for Assessment Year 2015-2016, and later, the court issued the notice under Section 142 (1) of the Income Tax Act, wherein the petitioner is called upon to tender specific details which relates to the issue of bad debt and NPA as stated under Section 36(1) (vii) and Section 36(1) (viia) of the Act.
Further, the petitioner in the case was served with the notice as stated under Section 148, wherein the petitioner is asked to file a return of income for Assessment Year 2015-2016. The petitioner in the plea also submitted the return of income in compliance with the notice issued under Section 148. Thus, the return of income seek for the reasons to be recorded for the reopening of the assessment.
The petitioner in the plea also contended that the action was unsustainable in the eye of the law since there being no fresh tangible material distinct from what was made part of the assessment proceedings and the same was available with the authority. As the issuance of notice was beyond the period of 4 years and the action was impermissible, in the absence of fresh tangible material.
Accordingly, the court allowed the petition and has quashed the notice as well as the order against the Axis Bank.
The counsel, B S Soparkar appeared for the petitioner.
The counsel, Dev D Patel represented the respondent.
