ITAT Quashes Re-assessment Notice against Johnson & Johnson [Read Order]

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench held that the second notice issued under Section 148 during the subsistence of earlier reassessment proceedings, the subsequent reopening is invalid.

The assessee, Johnson & Johnson Private Limited in appeal has assailed reopening of the assessment, as well as additions or disallowances on merits.

The Counsel appearing on behalf of the assessee made three-fold submissions assailing reopening under section 147 of the Act.

Firstly, the assessee  argued against initiation of second reopening proceedings during the subsistence of first reassessment proceedings.

The second plank of argument against reopening of assessment by the assessee is that the second notice for reopening was issued beyond the period of four years.

The third argument of the Authorized Representative of the assessed against reopening is that the Assessing Officer while taking permission from the CIT for issuing notice under section 148 of the Act has expressed his opinion that the case is time-barred and hence, cannot be reopened again.

However, the CIT in a mechanical manner vide communication accorded sanction for reopening the assessment under section 147 of the Act. The CIT has given no reason whatsoever overruling the comments of the Assessing Officer against the reopening of assessment.

The tribunal consisting of a Judicial Member Vikas Awasthy and Accountant Member Manoj Kumar Aggarwal held that the CIT has granted permission to the Assessing Officer for initiating reassessment proceedings without properly examining reasons for reopening. The reassessment proceedings were initiated beyond a period of four years and nowhere in the reasons, it has been brought out that the assessee has failed to disclose fully and truly all material facts necessary for the assessment.

“The impugned reassessment proceedings suffer from multiple incorrigible legal defects and hence, are unsustainable. The notice dated 29/3/2011 issued under section 148 of the Act is itself invalid. For the detailed reasons recorded above, we quash reassessment proceedings,” the tribunal said.