1. Purity Techtextile Private Limited vs ACIT- Bombay HC : Writ Jurisdiction: 148 notices Quashed within/after 4 years of 143(3): Held

"In so far as the companion writ petition is concerned (Writ Petition No.268 of 2010), the reopening of the assessment has taken place within a period of four years from the expiry of the relevant assessment year. However, so far as this case is concerned, it is apparent that the Assessing Officer did not have before him any additional material at all to form a belief that income had escaped assessment. The assessee had admittedly placed on record before the Assessing Officer for A.Y. 2003-2004 the circumstance that the plans have been approved for the building on 12th September 1988. There was no material before the Assessing Officer, that would lead to a formation of belief that the income had escaped assessment. We may also note that in the present case as well the Assessing Officer appears to have relied exclusively on an audit objection, which has already been dealt with while considering the facts of Writ Petition no.269 of 2010. There was hence a total absence of “tangible material”, as explained in the judgment of the Supreme Court in Kelvinator (supra) to justify the conclusion that income had escaped assessment. Finally, it would be necessary to note, as we have observed earlier, that mere existence of the land and building since 1988 is not a circumstance which would disentitle the assessee to the benefit of a deduction under Section 80IB of the Act, once other requirements of the provisions are fulfilled."

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2. Godrej Agrovet Ltd. vs. DCIT – Bombay HC: Writ Jurisdiction: 148 notice QUASHED: HELD

"The provisions of Section 147 of the Act empower the assessing officer to reopen an assessment or issue a notice for reassessment provided that he has reason to believe that income has escaped assessment. In a judgment of a Division Bench of this Court in

German Remedies v. Deputy Commissioner of Income Tax4 delivered by one of us, Shri Justice J.P. Devadhar, this Court held that though the power to reopen a concluded assessment under Section 147 is wide, the power cannot be exercised mechanically or arbitrarily. This Court held that even after the introduction of the concept of deemed escapement of income by explanation 2 to Section 147 with effect from 1st April, 1989 the belief that income had escaped assessment must be a prudent belief and not a mere change of opinion. This Court held that an assessment order passed after detailed discussion cannot be reopened within a period of four years from the end of the relevant assessment year unless the assessing officer has reason to believe that due to some inherent defect in the assessment the income chargeable to tax has been under assessed or assessed to a lower rate or excessive relief is granted or excessive loss or depreciation allowance or any other allowance under the Act has been computed. In the subsequent judgment of the Supreme Court in CIT v. Kelvinator of India Ltd.5 the Supreme Court has held that wide as the power under Section 147 is after 1st April, 1989 a mere change of opinion cannot justify the reopening of an assessment and there must be tangible material before the assessing officer before he proceeds to exercise his powers under Section 147....For the aforesaid reasons, the assessing officer has clearly acted in excess of the restraints on his jurisdiction to reopen an assessment in exercise of  the powers under Section 147 read with Section 148. The assessee would be entitled to succeed in these proceedings."

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