The Delhi High Court in the case Prem Kumar Chopra Versus ACIT observed and has quashed the reassessment notices on the grounds that the department has initiated reassessment by deviating from prior views which being without any cogent reasoning.
The bench comprising of Justice Rajiv Shakdher and Justice Girish Kathpalia in the case observed and has stated that the reassessment notices and that the order suffered from two infirmities, which being namely that it was proceeded on a view inconsistent with the earlier order and despite the facts and circumstances being similar, and thus, the ACIT in the case concerned did not support the subsequent divergent view with reasoning.
In the present case, the petitioner being the senior citizen, who being the proprietor of M/s Chopra Brothers, an authorized dealer for Kiloskar Electric Motors, and who is being engaged in the trading of industrial electric motors, mono-block pumps, the generator sets, etc.
Therefore, the petitioner in the case filed the return of his income in the assessment year 2015-2016, wherein it declared it to be for an amount of Rs. 19,94,970/-, which was processed as it has been stated under Section 143(1) of the Act. Therefore, the respondent in the case issued the notice under Section 148 of the Act, which was being challenged by the petitioner.
Further, the respondent in the case dropped the proceedings pertaining to the assessment year 2016–17, wherein it is concluded that there was no escapement of income during the financial year 2015–16 relevant to the assessment year 2016–17 and there was no entry of the transaction of sale or purchase by the bogus entity M/s Divya International, controlled by the entry operator Rajeev Khushwaha, to or from the M/s Chopra Brothers. The court held that it being not the fit case for issuance of notice under Section 148.
Therefore, the respondent rejected the case set up by the petitioner for the assessment year 2015-2016, wherein the court observed that there was an escapement of income during the financial year 2014-15 relevant to the assessment year 2015-16 and it was being held by the court that it was a a fit case for the issuance of notice under Section 148.
It has also been noted by the said court that the consistency does not mean putting iron fetters on subsequent decision-making. It only means expecting that a deviation from the previous decision in a similar set of circumstances which is explained by way of cogent and through rational reasons.
The court in the case observed and has held that the decision which is taken first in point of time was a reasoned decision based on the analysis of material on record, but the decision taken subsequently not only in order to took the view completely inconsistent with the previous view but also without an iota of reason.
The counsel, Deepak Chopra appeared for the petitioner.
The counsel, Abhishek Maratha represented the respondent.