Invalidity of Income Tax Notice under Section 148

The High Court found the notice issued under section 148 of the Income Tax Act, 1961 for assessment year 2008-2009 to be invalid due to impermissible change of opinion by the Assessing Officer. The court noted discrepancies in the reasons for reopening the assessment and highlighted that relying on an ITAT order dated after the original assessment was completed was legally untenable. Citing precedent cases, the court quashed the notice and order, granting the Petition and issuing a writ of certiorari under Article 226 of the Constitution of India.

---

---

Issues:
1. Validity of notice issued under section 148 of the Income Tax Act, 1961 for assessment year 2008-2009.

Analysis:
The High Court considered the reasons recorded for reopening, which highlighted discrepancies related to the carrying forward and set off of business losses and unabsorbed depreciation. The notice issued under section 148 was challenged by the Petitioner, arguing that the original Assessing Officer had the legal position available but still proceeded with the assessment order, indicating a clear case of impermissible change of opinion.

The court noted that the Assessing Officer relied on an ITAT order dated 30th June, 2010, in the case of DCIT vs. Times Guaranty Limited to justify the reopening of assessment. However, it was observed that the original assessment of the Petitioner was completed on 27th December, 2010, after the ITAT order. This discrepancy indicated a change of opinion by the Assessing Officer, which was deemed impermissible in law.

Furthermore, the court highlighted that the ITAT order was not accepted by the Hon'ble Gujarat High Court in General Motors India (P) Ltd. vs. Deputy Commissioner of Income Tax, leading to a settled legal position. The court referenced previous judgments, such as Pr. Commissioner of Income Tax, Central-2 vs. Supreme Petrochem Ltd., to support the argument that the ITAT order was not legally tenable. It was acknowledged that several revenue appeals had been withdrawn due to the established legal position.

Consequently, the court allowed the Petition, granting the prayer clause to issue a writ of certiorari under Article 226 of the Constitution of India. The impugned notice and order were quashed, canceled, and set aside based on the legal infirmities and impermissible change of opinion by the Assessing Officer.

---