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II. Direct Taxes Case Law:
1. Pawan Sood Vs. ITO, Writ Tax No. 105 of 2015, Date of Order: 11.02.2019, High Court of Bombay
Issue:
Is the Ld. AO justified tore-initiate the proceedings of reassessment only on the basis of change of opinion?
Held: No
Brief facts:
The assessee is an individual & running a proprietorship concern
in the name and style of “M/s National Thread Manufacturing Company” at
Kanpur. A survey under section 133-A of the Act was conducted at the
business premises of M/s Indian Overseas Trading Company on 23.10.2007
and it was found that in the partnership concern, the assessee is one of
the partners and also, the business as Proprietorship is run by him in
the name and style of M/s National Thread Manufacturing Company from the
same premises. The case was selected for scrutiny. Thereafter, in
proceedings u/s 154 of the Act, it was found that sundry credit of Rs.
79,88,253/- shown by the assessee were not verified during the original
assessment proceedings u/s 143(3) of the Act. It was further alleged by
the department that the petitioner has created fake and fictitious
liability, which is unascertainable and made addition of Rs. 24,44,404/-
vide order dated 25.03.2014. Thereafter, proceedings u/s 148 of the Act
were initiated by issuing a notice dated 29.03.2014 on the ground that
the assessee has declared a huge amount of sundry creditors as on
31.03.2007 in the name of two concerns, viz., M/s Dulbecco Meyer &
Company Limited and La-grand Consumables at Rs.34,30,503/- and Rs.
45,57,750/- respectively, which lacked due confirmation/ verification.
This impugned re-assessment notice dated 29.03.2014 has been assailed in
the present writ petition.
Held:
The Hon’ble High Court held that at the time of passing of the
original assessment order, there is a mistake or non-application of
mind, it would not justify the Ld. AO to re-initiate the proceedings of
reassessment and amounts to change of opinion which is not permissible
under the Act. For these reasons, the question is answered in favour of
the assessee and against the revenue.
Hence, the writ petition is allowed.
Cases Referred:
• Calcutta Discount Co. Ltd. Vs. ITO, 41 ITR 191 (SC)
• Ganga Saran & Sons P. Ltd. Vs.ITO, 130 ITR 1 (SC)
• Commissioner of Income Tax, Delhi Vs.Kelvinator of India Limited(2010) 2 SCC723,
• Phool Chand Bajrang Lal and Another Vs.ITO, (1993) 4 SCC 77
• State of Uttar Pradesh and Others Vs. M/s AryaverthChawal Udyog and Others, (2016) 91 VST 1(SC).
(Please click here for judgment)
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