Court quashes tax notice due to errors in affidavit, emphasizes procedural compliance

The court quashed the notice and order issued by the Respondents in a case involving incorrect statements in an Affidavit-in-Reply by an Assistant Commissioner of Income Tax, lack of independent belief formation for re-opening assessment, delay in filing the Affidavit-in-Reply, rejection of objections by the Petitioner, re-assessment based on a change of opinion without new material facts, and failure to disclose all material facts. The court ruled in favor of the Petitioner, emphasizing the importance of following legal procedures and providing valid grounds for re-opening assessments. The Petition was allowed with no order as to costs.

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Issues:
1. Incorrect statement made in the Affidavit-in-Reply by an Assistant Commissioner of Income Tax.
2. Forming an independent belief by an Assessing Officer for re-opening assessment.
3. Delay in filing Affidavit-in-Reply by the Respondents.
4. Rejection of objections filed by the Petitioner regarding re-opening of assessment.
5. Re-assessment based on change of opinion by the Assessing Officer.
6. Failure to disclose all material facts by the Petitioner.
7. Quashing of the notice and order issued by the Respondents.

Analysis:

1. The judgment highlighted an incorrect statement made by an Assistant Commissioner of Income Tax in the Affidavit-in-Reply, where he referred to a case law while disposing of objections despite not being the officer who issued the notice. This raised concerns about the accuracy of the statements made under oath, leading to questions regarding the validity of the actions taken based on such statements.

2. Another issue addressed in the judgment was the formation of an independent belief by the Assessing Officer for re-opening the assessment. The court noted that the officer who made the statement regarding the independent belief was not the one who issued the notice under Section 148, casting doubt on the validity of the reasons provided for re-opening the assessment.

3. The court also highlighted the delay in filing the Affidavit-in-Reply by the Respondents, noting that the delay of almost two years was in breach of the court's orders. Despite granting permission to withdraw the Affidavit, the court refused to allow the filing of a fresh Affidavit due to the significant delay, ultimately proceeding on the basis that no reply was filed.

4. The judgment further discussed the rejection of objections filed by the Petitioner regarding the re-opening of the assessment. The Petitioner challenged the notice dated 27/03/2019 and the subsequent order dated 24/09/2019, emphasizing the need for a valid and legally sound basis for re-opening the assessment.

5. The court analyzed the re-assessment based on a change of opinion by the Assessing Officer, noting that the reasons provided did not indicate any failure on the part of the Petitioner to disclose material facts. The court emphasized that re-opening the assessment solely on the basis of a change of opinion without new material facts was not permissible under the law.

6. Regarding the failure to disclose all material facts by the Petitioner, the court examined the reasons recorded for issuing the notice under Section 148 and found that the basis for re-opening the assessment was a change of opinion by the Assessing Officer. The court emphasized that when all necessary facts for assessment are disclosed, the Assessing Officer cannot re-open proceedings based on a mere change of opinion.

7. Finally, the court quashed the notice dated 27/03/2019 and the order dated 24/09/2019, ruling in favor of the Petitioner and highlighting the importance of adhering to legal procedures and providing valid grounds for re-opening assessments. The Petition was allowed with no order as to costs, bringing the matter to a close.

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