2022 (1) TMI 1230 - HC - Income Tax

Reopening of assessment u/s 147 - respondent has passed the impugned order disposing/over ruling the objection of the petitioner against reopening of the Assessment under Section 148 - HELD THAT - In this case the assessment was made pursuant to returns filed under Section 139 of the IT Act. The scrutiny assessment passed under Section 143 (3) of the Income Tax Act was based on the information in the returns. Whether there was a suppression of facts or not may be decided in the proceedings under Section 148 - The impugned order has merely justified the reasons for reopening of the assessment. It cannot be said that the respondent has come to a definite conclusion as to whether indeed the case made out for recomputing the income based on the reasons given and the observations in the impugned order. It is still open for the petitioner to give a proper explanation/reason as to why the assumption of Jurisdiction under Section 148 of the IT Act was erroneous both on the facts and on the law. We are not inclined to interfere with the impugned order over ruling the objection of the petitioner. Liberty is however given to the petitioner to participate in the proceedings before the respondent by filing suitable reply for the respondent to pass appropriate reassessment order in accordance with law and on merits. It is made clear that the observation in the impugned order is only for disposing the objection of the petitioner against reopening the completed assessment. Ultimately the issue will have to be decided on merits. It is for the petitioner to file appropriate reply/representation explaining the reason as to why the completed under Section 143(3) of the IT Act on 07.10.2016 deserves to be reconfirmed. Writ Petition filed by the petitioner is disposed. The respondent is directed to complete the proceedings within a period of three months from the date of receipt of a copy of this order.

Summary

Issues:
1. Reopening of assessment under Section 148 of the Income Tax Act.
2. Consistency of reasons for reopening assessment.
3. Jurisdiction under Section 148 of the IT Act.
4. Compliance with legal precedents.
5. Interference with impugned order.
6. Liberty to participate in proceedings.
7. Completion of reassessment order within a specified period.

Analysis:

1. The petitioner challenged the notice issued under Section 148 of the Income Tax Act, seeking to reopen the assessment beyond the normal limitation period. The respondent passed an order overruling the objection of the petitioner against the reopening of the assessment.

2. The petitioner argued that the reasons for reopening the assessment were inconsistent with the findings in the impugned order. They contended that the Original Scrutiny Assessment was completed based on all records, and there was no evidence of suppression to justify reopening under Section 148.

3. The petitioner relied on legal precedents, including a decision of the Hon'ble Supreme Court and a Division Bench of the High Court, to support their claim that the impugned order was based on a change of opinion rather than suppression of facts.

4. The respondent, represented by the Senior Standing Counsel, defended the impugned order as well-reasoned and opposed any interference. They maintained that the assessment had to be completed, and the petitioner could provide additional inputs during the proceedings.

5. The Court noted that disputed factual questions could not be resolved summarily under Article 226 of the Constitution. The assessment was based on self-assessment by the assessee, and the impugned order justified the reasons for reopening without conclusively determining the need for reassessment.

6. The Court declined to interfere with the impugned order, granting the petitioner liberty to participate in the proceedings by providing explanations for contesting the jurisdiction under Section 148. The order emphasized the need for the reassessment to be conducted in accordance with the law and on merits.

7. The Court directed the respondent to complete the reassessment proceedings within three months, highlighting that the ultimate decision on the issue would be based on the merits of the case. The writ petition was disposed of, with no costs awarded, and connected petitions were closed accordingly.