Khushi Doshi
Published on: March 16, 2022 at 11:51 IST
The Bombay High Court Bench of Justice K.R. Shriram and Justice Amit B. Borkar upheld the validity of the Reassessment Notice issued against Maharashtra Minister Chhagan Chandrakant within 5 hours of receiving information.
The Petitioner was a cabinet minister in Maharashtra. He filed an Income Tax Return for the fiscal year 2012–13, which was accepted without question, and an assessment Order was issued.
The Assessing Officer was notified by email that the assessee had defrauded the Maharashtra government. The assessee prepared fabricated documents and presented them as genuine documents in order to obtain a plot for the construction of the State Central Library.
As a result, on the same day, the AO issued a reassessment notice to the assessee. The assessee appealed the reassessment notice to the Bombay High Court.
The question was whether there was reason to believe that income had escaped assessment and whether the Assessing Officer had tangible evidence to support that belief.
Once a tangible basis for reopening the assessment has been disclosed, it would be inappropriate for this Court to prevent the Assessing Officer from conducting any further investigation. In this Case, the reasons do reveal what the tangible material is.
The Court noted that the power vested in the commissioner under Section 151 of the Income Tax Act to grant or not grant approval to the Assessing Officer to re-open an assessment is coupled with duty, and the commissioner is duty bound to apply his mind to the proposal put forward to him for authorization in light of the material relied on by the Assessing Officer. Such power cannot be wielded in a casual, routine, and perfunctory manner.
The Court noted that there was nothing to suggest that there was a lack of mental application. Simply because the information was received at 5.47 p.m. and the notice was issued by 10.49 p.m. does not imply that there was a failure to apply one’s mind.
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