In a major relief to the Skoda Auto Volkswagen, the Bombay High Court quashed the reassessment notice on account of change of opinion of AO.
The Petitioner had received a notice under Section 148 of the Income Tax Act, 1961 informing petitioner that the Revenue had reasons to believe that petitioner’s income in respect of which it was chargeable to tax for Assessment Year 2004-2005 has escaped assessment within the meaning of Section 147 of the said Act. The Petitioner responded to the notice with its objections. Before the objections were disposed of, various further notices were issued. All these notices were impugned in this petition as originally filed. By an order dated 7th March 2013 ad-interim relief in terms of prayer clause – (d) was granted by this Court with a caution to the parties that the petition may be heard and finally disposed of at the admission stage itself. As the order dated 7th March 2013 mentioned that the ad-interim relief shall remain in operation till the next date of hearing and on the next date of hearing, the matter either did not get called out or the stay did not get extended because petitioner failed to request the Court to extend the stay, respondents proceeded to complete the assessment and passed an assessment order dated 28th March 2013. Petitioner has also impugned an order dated 23rd January 2013 passed by the Transfer Pricing Officer to whom a reference was made under Section 92CA (1) of the said Act.
The respondent authority contended that income chargeable to tax has escaped assessment by reason of the failure on the part of petitioner to disclose fully and truly all material facts necessary for its assessment. As reasons do not indicate which are those material facts that petitioner has failed to truly and fully disclose.
The division bench of Justice Amit B. Borkar and Justice K.R.Shriram held that Petitioner has not only filed its account books and other evidence but those have been considered by the Transfer Pricing Officer whose order also has been considered by the Assessing Officer while passing the original assessment order.
“We are satisfied that the notice dated 23rd March 2011 issued under Section 148 of the said Act has been issued after illegally assuming jurisdiction under Section 148 of the said Act,” the court said.
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