Court sets aside notice under Section 148 and order rejecting objections for AY 2017-18. The court set aside the notice issued under Section 148 of the Income Tax Act and the order rejecting objections related to the reopening of assessment ...
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Court sets aside notice under Section 148 and order rejecting objections for AY 2017-18.
The court set aside the notice issued under Section 148 of the Income Tax Act and the order rejecting objections related to the reopening of assessment for the Assessment Year 2017-18. The court found that the entire deduction claimed by the petitioner under Section 80IA had already been disallowed during the initial assessment process. Due to the non-application of mind by the Assessing Officer and the lack of basis for income escaping assessment, the court allowed the petition and disposed of the pending application.
Issues: 1. Challenge to the notice issued under Section 148 of the Income Tax Act, 1961 for reopening assessment. 2. Rejection of objections to the reopening of assessment for the Assessment Year 2017-18. 3. Disallowance of deduction claimed under Section 80IA of the Act.
Analysis: 1. The petitioner filed a writ petition challenging the notice dated 26th March 2019 issued under Section 148 of the Income Tax Act, 1961, seeking to reopen the assessment for the Assessment Year 2017-18. The petitioner also contested the consequential order dated 7th August 2019 rejecting objections to the reopening of assessment. The reasons for reopening the assessment were related to the non-filing of the audit report for claiming deduction under Section 80IA of the Act amounting to Rs. 1,24,04,182.
2. The assessment for the said year was reopened based on the grounds that the deduction claimed by the petitioner under Section 80IA was not allowable due to the non-filing of the required audit report. However, upon examination of the intimation sent under Section 143(1) of the Act, it was revealed that the entire deduction claimed by the petitioner had already been disallowed by the respondents during the initial assessment process. The petitioner had raised objections to this disallowance in a letter dated 7th May 2019, highlighting the non-allowance of the deduction and the raised demand of Rs. 42,83,943.
3. The court observed a clear non-application of mind by the Assessing Officer (AO) regarding the disallowance of the deduction claimed by the petitioner under Section 80IA. As the intimation under Section 143(1) already communicated the disallowance of the deduction, there was no basis for the income escaping assessment. Consequently, the court set aside the impugned notice issued on 26th March 2019 and the order dated 7th August 2019 rejecting the petitioner's objections. The petition was allowed, and the pending application was disposed of accordingly.
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