Dept.’s Personal Opinion Not Tangible Material For Reopening Assessment: Calcutta High Court Quashes Reassessment

The Calcutta High Court has quashed the reassessment order on the grounds that the department’s personal opinion is not tangible material for reopening the assessment.

The bench of Chief Justice T. S. Sivagnanam and Justice Hiranmay Bhattacharyya has observed that unless glaring omissions are demonstrated or conditions precedent for exercise of the power to reopen assessment are not complied with, writ court would not ordinarily interfere with the order passed under Section 148A(d) of the Income Tax Act.

The appellant/assessee had challenged the order passed under Section 148A(d) of the Income Tax Act for the assessment year 2017-18.

The Single Bench has dismissed the writ petition on the ground that the assessee would be entitled to raise all issues in the reassessment proceedings.

The assessing officer had sought to reopen the assessment for the assessment year 2016–17, relevant to the financial year 2015–16. The reopening proceedings were put to the test by the writ petitioner, which was allowed.

The order has become final, and the department has not filed any intra-court appeal against the order. With regard to the assessment year 2017–18 relevant to the financial year 2016–17, the assessee was issued a notice under Section 148A(b). In the notice, it has been stated that credible information has been received through the insight portal regarding cash deposits, interest receipts, the purchase of debentures, etc.

The assessee submitted that there is no material placed by the department to state that there has been an escapement of income from the charge of income tax. With regard to the cash deposits, the assessee had submitted a reply stating that the deposits were made by withdrawal from their bank account.

The court held that for the purpose of reopening an assessment, there should be tangible material placed by the assessing officer to show that there was an escapement of income from the payment of income tax.

Counsel For Petitioner: Sutapa Roy Choudhury

Counsel For Respondent: Soumen Bhattacharya

Case Title: Dinesh Kumar Goyal Huf Vs Income Tax Officer Ward-43(1) Kolkata And Ors.

Case No.: MAT/1685/2023 IA NO: CAN/1/2023

Click Here To Read The Order