2020 (2) TMI 657 - HC - Income Tax

Court allows amendment to challenge reopening of assessment under Income Tax Act

Chandrakant Raghunath Patil Versus Assistant Commissioner of Income Tax Circle 1 (3), Surat

The court allowed an amendment to the petition challenging the reopening of assessment under Section 147 of the Income Tax Act for A.Y. 2013-14. The ... Reopening of assessment u/s 147 - HELD THAT:- It appears that the audit itself has dropped objection. In such circumstances, the proceedings under Section 147 have also been dropped. In such a situation, we need not adjudicate this writ application any further on merits. However, at this stage, Mr. Soparkar, the learned counsel appearing for the assessee pointed out that his client, as on date, has not received any intimation in this regard in writing. Since a statement is made by the learned counsel appearing for the Revenue and the communication in writing is also taken on record, the Revenue may do well to inform the writ applicant in writing about its decision to drop the reopening. Issues: Reopening of assessment under Section 147 of the Income Tax Act, 1961.In this case, the writ applicant sought relief to quash an impugned notice for reopening assessment under Section 147 of the Income Tax Act, 1961 for A.Y. 2013-14. The petitioner argued that the property in question had been disclosed in the balance sheet of a proprietary concern and that objections against the reopening were raised, highlighting the delay in furnishing reasons for reopening. The court allowed an amendment to the petition and issued notice returnable on a later date. The respondent was permitted to proceed further but not pass a final order without court permission. During the hearing, the standing counsel for the Income Tax Department presented a communication stating that the proceedings for reopening the assessment had been dropped as the audit objection was withdrawn. Consequently, the court disposed of the writ application, noting that the Revenue should inform the petitioner in writing about the decision to drop the reopening.This judgment highlights the procedural aspects involved in challenging the reopening of an assessment under Section 147 of the Income Tax Act, emphasizing the requirement for proper communication and adherence to guidelines. It also underscores the significance of audit objections and their impact on the assessment process. The court's decision to dispose of the application based on the withdrawal of the objection by the audit demonstrates the importance of timely and accurate information exchange between the taxpayer and the tax authorities in such matters.