Connect us       New User?     Subscribe Now
Confirm your Email ID for Updates
19.04.2019 - Voice of CA presents - Latest Updates
Friday, April 19, 2019

  I. Headlines Today:   

  1. CBDT identifies 20.4 million non-filers, asks I-T dept to take action  (Click for detail)
  2. Changes in Form 16 and Form 24Q  (Click for detail)
  3. To widen tax base, govt may tweak foreign taxation rules  (Click for detail)
  4. Investors panic as Income Tax seeks details from unlisted companies  (Click for detail)
  5. ICAI: Volume-I-Background Material on GST  (Click for detail)
  6. ICAI: Volume-II-Background Material on GST  (Click for detail)

  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

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.

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)


Golden Rules:

  "Self confidence is a small Lamp in a dark tunnel.
It does not show everything at once,
but gives enough light for the next step" 


Thanks & Regards


Voice of CA 

« Back
Online Poll
Connect Us       New User?     Subscribe Now