In a recent ruling, a division bench of the Gujarat High Court has held that an assessment re-opened under section 148 of the Income Tax Act, 1961 is legally invalid if the same was framed after the limitation period of four years.
The High Court hearing a petition filed by Jayesh T. Kotak wherein the petitioner challenged the notice issued by the Deputy Commissioner of Income Tax under section 148 of the Income Tax Act, 1961 seeking to reopen the assessment. The Deputy Commissioner of Income Tax had the objections raised by the petitioner to the reopening of assessment for want of certain details. Though the petitioner furnished all the details, no action was taken on it. After a gap of more than four years, the petitioner received a notice under section 148, in which the respondent wants to reopen the assessment for the assessment year 2008-2009.
The petitioner contended that the issue having already been gone into at the time of scrutiny assessment, it is not permissible for the Assessing Officer to reopen the assessment in respect of the same issue.
The division bench consisted of Justice Hansa Divani and Justice G.R. Udhwani allowed the petition and quashed the notice issued by the officer under section 148 of the Income Tax Act, 1961.
The bench held that the issue having already been gone into at the time of scrutiny assessment, it is not permissible for the Assessing Officer to reopen the assessment in respect of the same issue.
“The reopening of assessment beyond a period of four years from the relevant assessment is without the authority of law,” the bench said.
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