Court dismisses challenge to income tax assessment reopening for 2008-09, ruling income taxable despite disclosure.

The Court dismissed the Writ Petition challenging the notice to reopen the assessment for the Assessment Year 2008-09 under Section 148 of the Income Tax Act. It held that since no scrutiny assessment had been conducted for that year, the condition for issuing notices beyond four years did not apply. The Court rejected the argument that the income had been disclosed in the Society's return, stating that the deduction claimed was not available to the Petitioner Trust, making the income chargeable to tax. The Rule of Consistency was deemed inapplicable, and the Petitioner had the option to appeal the Assessing Officer's decision.

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Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 for reopening Assessment Year 2008-09.

Analysis:
1. The Petitioner, a Trust, challenged a notice dated 16th March, 2015, seeking to reopen the Assessment for the Assessment Year 2008-09 under Article 226 of the Constitution of India. The notice was issued under Section 148 of the Income Tax Act, 1961, as the Assessing Officer believed that income chargeable to tax had escaped assessment.

2. The reasons for reopening the assessment included the assertion that the property income from Nariman Bhavan belonged to Jolly Maker 1 Trust, but the Coop. Society, as trustee, had not filed a valid return of income for A.Y. 2008-09, declaring rental and interest income from Nariman Bhavan Property. The Assessing Officer believed that the income of the trust had been incorrectly declared in the return of the Society, leading to an alleged escape of assessment.

3. The Petitioner Trust objected to the reopening notice, arguing that there was no failure to disclose all facts, and the income in question had already been disclosed in the return filed by the Society. The Petitioner also contended that the principle of consistency should apply, as the income from interest and rent had been taxed in the hands of the Society for other Assessment Years.

4. The Court held that since no scrutiny assessment had been done for the subject Assessment Year, there was no formation of opinion for a change of opinion to occur. The condition precedent for notices issued beyond four years, regarding failure to disclose all facts, did not apply. Each Assessee is independent, and reasons for reopening must be examined accordingly.

5. The Court rejected the argument that since the income had been disclosed in the Society's return, no tax had escaped assessment. The Revenue's prima facie view was that the deduction claimed by the Society was not available to the Petitioner Trust, making the income chargeable to tax in the context of the Trust.

6. The Rule of Consistency was deemed inapplicable as no scrutiny assessment had been conducted for the Petitioner Trust. The Court emphasized that the Assessing Officer's view at the time of issuing the notice was prima facie and subject to correction during assessment proceedings. The Petitioner had the option to appeal if aggrieved by the Assessing Officer's order.

7. Ultimately, the Court dismissed the Writ Petition, stating that no interference was warranted in the present facts, and no order as to costs was issued.

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