No Failure On Citibank To Disclose Income: Bombay High Court Quashes Reassessment

The Bombay High Court has held that where the notice has been issued after the expiration of four years, the onus is on the Assessing Officer to show that income chargeable to tax has escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for that assessment year.

The bench of Justice K. R. Shriram and Justice M. M. Sathaye observed that there is not even a whisper in the reasons to believe that there was any such failure on the part of CitiBank to disclose fully and truly all material facts necessary for its assessment.

The petitioner/assessee is a body corporate incorporated in the United States of America and has been carrying on business in India through its branches. The petitioner challenged the action of the respondent seeking to reopen the petitioner's completed assessment for the Assessment Year 1992-1993.

The petitioner contended that despite repeated requests to provide reasons to believe, he was not provided with them.

The petitioner contended that the reassessment notice is liable to be quashed once the assessment for the entire year is settled by following the provisions of the Kar Vivad Samadhan Scheme 1998 (KVSS). The Designated Authority, after application of mind, made an order under Section 90, which has been complied with by making payment of the tax computed under the KVSS. There was no question of reopening any issue that was the subject matter of the order of the Designated Authority.

The department contended that having filed a declaration under the KVSS does not mean that there has to be a closure.

The court held that the reopening of the assessment was merely on the basis of a change of opinion by the Assessing Officer, and that does not constitute justification or reasons to believe that income chargeable to tax has escaped assessment.

Case Title: Citibank N.A. Versus S.K. Ojha

Case No.: Writ Petition No.2189 Of 2000

Date: 09/06/2023

Counsel For Petitioner: Percy Pardiwalla

Counsel For Respondent: Suresh Kumar

Click Here To Read The Order