Court invalidates assessment order, emphasizes Assessing Officer's need for valid grounds & new evidence.

The court set aside both the notice of reopening and the assessment order dated 12.12.2018, ruling in favor of the petitioner, a Private Limited Company. The court emphasized that the Assessing Officer cannot alter the basis of assessment without valid grounds and new evidence justifying the change. The Assessing Officer's failure to wait for the required period before passing the assessment order was noted as an error, leading to the assessment order being set aside for being without jurisdiction, reverting to the pre-assessment order stage.

---

---

Issues:
Challenge to notice of reopening of assessment and assessment order dated 12.12.2018.

Analysis:
1. The petitioner, a Private Limited Company, challenged a notice of reopening of assessment dated 31.3.2018 issued by the Joint Commissioner of Income Tax, which was later amended to challenge an assessment order dated 12.12.2018 by the Deputy Commissioner of Income Tax. The petitioner's return of income for the assessment year 2011-12 was scrutinized, revealing bogus purchase bills and accommodation entries. The Assessing Officer added a sum to the total income based on profit ratio. The notice of reopening was issued beyond the four-year period from the end of the relevant assessment year, citing undisclosed income due to accommodation entries and fictitious bills. The petitioner objected to the notice, which was rejected, leading to the assessment order on 12.12.2018.

2. The Assessing Officer passed the assessment order without waiting for four weeks from the date of communication of the order disposing of objections, contrary to legal requirements. Despite being informed, the Assessing Officer proceeded with the assessment. The petitioner raised this issue, and the Assessing Officer cited high work pressure and apologized for the oversight. The court acknowledged the error but closed the issue. However, the assessment order defied the court's previous judgment and was set aside for being without jurisdiction, reverting to the pre-assessment order stage.

3. Regarding the merits of the challenge to the impugned notice, the Assessing Officer sought to tax the entire amount of bogus purchases and accommodation entries as undisclosed income, deviating from the initial approach of taxing only the profit element. The court emphasized that once the Assessing Officer had taxed the bogus purchases in the original assessment, he could not change the basis for assessment without new material. As there was no additional evidence to suggest escaped income, the court set aside the notice of reopening, ruling in favor of the petitioner.

4. In conclusion, the court allowed the petition, setting aside both the notice of reopening and the assessment order dated 12.12.2018, emphasizing that the Assessing Officer cannot alter the basis of assessment without valid grounds and new evidence justifying the change.

---