2013 (4) TMI 901 - HC - Indian Laws

Summary

Issues Involved:
The judgment deals with the challenge to a reassessment notice issued under section 148 of the Income-tax Act, 1961 for the assessment year 2001-02 by a company under the Companies Act, 1956. The main issue is whether the Department can reopen an assessment done pursuant to directions issued by the Additional Commissioner under section 144A.

Details of the Judgment:

Relevant Facts:
During the relevant assessment year, the petitioner company incurred losses in share dealing and speculation business, along with capital gains and dividend income. The petitioner filed a return showing total income, and the Assessing Officer proposed applying certain provisions, which the petitioner objected to. The Additional Commissioner under section 144A directed the Assessing Officer not to treat certain losses as speculation losses.

Petitioner's Contentions:
The petitioner argued that the Assessing Officer cannot reopen the assessment based on the same grounds after directions under section 144A were issued. They contended that the order under section 144A had finality and was binding on the Assessing Officer.

Respondent's Arguments:
The respondents justified issuing the notice under section 148, stating that the purpose of section 144A was limited to assessment, and the notice was justified as it raised a fresh cause of action.

Court's Analysis:
The Court examined section 144A, which grants the Joint Commissioner the discretion to issue binding directions to guide the Assessing Officer for completing the assessment. The Court noted that the Assessing Officer was trying to reopen the assessment on the same grounds as before the order under section 144A was passed, indicating a mere change of opinion.

Legal Precedent:
The Court referred to a previous judgment highlighting that the Assessing Officer cannot reopen an assessment based on the same facts once a hierarchy of tribunals has given a finding. The Court emphasized the binding effect of the directions under section 144A on the Assessing Officer.

Judgment:
The Court held that since the Department did not revise the order passed under section 144A, the notice under section 148 could not be sustained. The impugned notice was set aside and quashed, along with all consequential proceedings. The writ petition was allowed with no order as to costs.