The Delhi High Court has held that the material gathered in previous years cannot be the basis of reassessment for upcoming years.
The bench of Justice Yashwant Varma and Justice Harish Vaidyanathan Shankar has observed that based on what was noticed in the course of the survey, cannot be extrapolated to other years. The purported belief of the Assessing Officer was not a belief at all but was merely a suspicion.
Insofar as AYs 2013-14, 2014-15 and 2015-16 are concerned the petitioner had been assessed in terms contemplated by Section 143(3) of the Income Tax Act. Since the reassessment was commenced prior to the introduction of the new scheme of assessment by virtue of Finance Act, 2021, it was the procedure as prevalent prior thereto which was followed by the respondents.
Although the notices under Section 148 had been issued initially, the reasons to believe which constituted the foundation for formation of opinion that income had escaped assessment was provided to the writ petitioner subsequently.
The petitioner is stated to have filed its objections to the assumption of jurisdiction which have ultimately come to be dismissed by the Assessing Officer, leading to the filing of the writ petitions.
The court held that it may be permissible for an AO to take cognizance of a “fundamental aspect pervading through different assessment years has been found as a fact in one way or the other….”, the said precept could have been legitimately invoked provided the AO were satisfied or had come to record its prima facie opinion that the facts which prevailed and obtained in AY 2013-14 upto AY 2017-18 were identical to those which had been found in the course of the two surveys which had been undertaken in 2007 and 2019. However, no such finding has either been returned nor a conclusion recorded in the “reason to believe” drawn by the AO.
Case Details
Case Title: Grid Solutions Oy (Ltd) Versus ACIT
Case No.: W.P.(C) 1196/2022
Date: 17/01/2025
Counsel For Petitioner: Ajay Vohra
Counsel For Respondent: Ruchir Bhatia
