The Bombay High Court has held that merely because there is some change in the tax rate for the future assessment years, the provisions of Section 148 of the Income Tax cannot be invoked without the jurisdictional parameters of these Sections being fulfilled.
The bench of Justice M. S. Sonak and Justice Jitendra Jain has observed that given Parliament’s retrospective amendment of law, the Assessing Officer may have reason to believe that income has escaped assessment but that in itself is insufficient for reopening an assessment beyond the period of 4 years. When an assessment is sought to be reopened beyond the period of four years, there must be a failure on the part of the assessee to fully and truly disclose all material facts necessary for assessment.
The petitioner/assessee has challenged the reassessment notice under Section 148 of the Income Tax Act, 1961 and the order, rejecting the petitioner’s objection to reopening of the assessment made by the first respondent for the assessment year 2014-15.
The reassessment notice was issued more than four years after the end of the relevant assessment year. Therefore, in terms of the proviso to Section 147 of the Income Tax Act, the Assessing Officer could have reopened the assessment only upon recording satisfaction that the petitioner failed to fully and truly disclose all material facts necessary for the assessment.
Upon receipt of the impugned notice, the petitioner sought and was furnished the reasons for reopening.
No allegation regarding failure on the petitioner’s part to fully and truly disclose any material facts necessary for the assessment was given by the department. Without such an allegation, let alone some material to support such an allegation, one of the jurisdictional parameters for reopening of the assessment beyond 4 years could not be said to have been fulfilled.
The court quashed the reassessment proceedings.
Case Details
Case Title: Oxford University Press Versus DCIT
Case No.: Writ Petition No.1894 Of 2022
Date: 11 February 2025
Counsel For Petitioner: J. D. Mistri, Senior Advocate
Counsel For Respondent: Akhileshwar Sharma
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