A Division Bench of the Gujarat High Court held that reassessment powers not to be exercised for purpose of re verification or merry sailing for rowing inquiry.
The petitioner, Piyush Ambalal Gandhi filed the return of income after claiming rebate in respect of life insurance premium, housing loan etc. It was thereafter that the notice under Section 148 of the Income Tax Act, 1961 was issued to the petitioner seeking to reopen the assessment. The petitioner filed his objections and stated petitioner that he had not made any claim under Section 80CCC (1) of the Income Tax Act, 1961. The objections of the petitioner came to be disposed of and rejected by the Assessing Officer.
The Assessing Officer however did not accept the objections and recorded that the assessee had not offered the gain of Rupees eleven lakhs earned out of premature surrender of policy. According to the Assessment Officer, the income had escaped to the said extent.
The Counsel for the assessee, submitted that despite the information and necessary clarification provided to the Assessing Officer, the same were not considered. What learned advocate for the petitioner highlighted was that the assessee never claimed relief under Section 80CCC (1) of the Income Tax Act, therefore question of applicability of Section 80CCC (2) of the Income Tax Act could not arise.
The Counsel for the respondent submitted that the Assessing Officer had arrived at necessary satisfaction with reason to believe that it was fit case to be reopened. It was contended that the assessee’s case that relief was not claimed under Section 80CCC (1) of the Income Tax Act, 1961 was not only erroneous but was an irrelevant consideration.
The Bench consisting of Justice N V Anjaria and Justice Bhargav D Karia observed that “It clearly appears that the Assessing Officer wanted to undertake a fishing inquiry in relation to issue, about which he had already solicited information and examined the same. The reassessment powers could not be exercised either for the purpose of reverification or to have a merry sailing for a rowing inquiry.”
Ketan Shah appeared for the petitioner and Varun K. Patel appeared for the respondent.
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