Delhi High Court quashes Notice for Re-Assessment against Bharati Infratel [Read Judgment]

The Delhi High Court has quashed Income Tax Department’s Notice for Re-opening of Assessment against Bharati Infratel Limited.

BIL in its return of income for the Assessment Year 2008-09 filed on 15th October, 2008 had declared a loss of Rs.157,27,09,173/- under the normal provisions and book profits of Rs.63,54,91,170/- under Section 115 JB of the Act. Revised return filed on 31st March, 2010 had enhanced the book profits to Rs. 63,89,40,500/-. Return for Assessment Year 2008-09 was taken up for scrutiny assessment vide issue of notices under Section 143(2) and 142 of the Act. Questionnaires were issued to which BIL had responded by furnishing details and documents which would be referred subsequently, culminating in the order of assessment dated 20th December, 2010 under Section 143(3) of the Act.

The BIL has challenged the legality and validity of notice for re-assessment dated 31st March, 2015 issued under Section 148 read with Section 147 of the Income Tax Act, 1961

While allowing the Writ Petition, the division bench comprising of Justice Sanjiv Khanna and Justice Chander Shekhar has observed that, “BIL had made full and true disclosure of material facts i.e. all primary facts which are mentioned and stated in the ‗reasons to believe‘. Nothing was concealed, withheld and nothing was left to be factually discovered in the form of ‘material’ mentioned in detail in accounts and other evidence, that was not disclosed/stated but could have been discovered by due diligence. In fact as noted above, reading of the ‗reasons to believe‘ i.e. evidence and material in form of facts and figures were duly stated and mentioned in the affidavit sworn by Mr. Raghuveer Singh Dagur on 12th February, 2010, opposing the second scheme of demerger and transfer of infrastructure assets in 12 circles by BIL to M/s Bharti Infratel Ventures Ltd. and language, facts and figures in the reasons to believe‘ are similar, if not identical”.

The Court also observed that, “this would be a case of change of opinion‘ as the assessee had disclosed and had brought on record all facts relating to transfer of passive infrastructure, its book value, fair market value as was mentioned in the SOA as also that the transferred passive assets to become property of M/s. Indus Infrastructure Ltd. including the dates of transfer and the factum that one-step subsidiary Bharti Infratel Ventures Ltd. was created for the said purpose. These facts were within the knowledge of the Assessing Officer when he had passed the original assessment order for the Assessment Year 2008-09 on 20th December, 2010”.