Writ petition challenging income tax assessment reopening under section 147 dismissed due to contradictory revised returns

Madras HC dismissed the writ petition challenging reopening of assessment u/s 147. The petitioner filed returns admitting income of Rs. 153,79,75,580/- but subsequently filed revised returns contrary to undertakings given during search u/s 132 conducted on 20.11.2014. Senior Executive's admission of additional income during search varied from returns filed. Court held that income escaped assessment as revised returns filed on 05.03.2016 and 30.09.2015 contradicted earlier undertakings given post-search, justifying reopening proceedings.

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Issues Involved:
1. Validity of reopening the assessment for the Assessment Year 2014-2015.
2. Validity of reopening the assessment for the Assessment Year 2015-2016.
3. Evaluation of objections raised by the petitioner against the reopening of assessments.

Summary:

1. Validity of reopening the assessment for the Assessment Year 2014-2015:

The petitioner challenged the Impugned Order dated 10.01.2020, which justified the reopening of the assessment for the Assessment Year 2014-2015 based on the Supreme Court's order dated 24.10.2013, determining a service tax refund of Rs. 77.80 Crores. The objections raised by the petitioner included claims of reopening without fresh material, change of opinion, and failure to disclose material evidence. The court found these objections invalid, stating that fresh material was available, there was no change of opinion, and the petitioner failed to disclose the Supreme Court order during the original assessment. Thus, the reopening was justified.

2. Validity of reopening the assessment for the Assessment Year 2015-2016:

The petitioner challenged the Impugned Order dated 16.07.2021, which justified the reopening of the assessment for the Assessment Year 2015-2016 based on the omission of Rs. 200 Crores admitted during a search but not included in the certified accounts. The court rejected the objections, stating that fresh material was available, there was no change of opinion as the issue was not previously discussed, and the petitioner failed to disclose the additional income. The statutory requirements for reopening were met, and the approval was not mechanical but based on objective satisfaction.

3. Evaluation of objections raised by the petitioner against the reopening of assessments:

The petitioner raised several objections against the reopening of assessments for both years, including claims of reopening without fresh material, change of opinion, failure to disclose material evidence, and mechanical satisfaction by the approving authorities. The court systematically addressed each objection, finding them invalid. It was noted that the petitioner had failed to disclose significant information during the original assessments, and the reopening was based on fresh material and objective satisfaction by the authorities.

Conclusion:

The court dismissed the writ petitions, finding no merit in the objections raised by the petitioner. The reopening of assessments for the Assessment Years 2014-2015 and 2015-2016 was justified based on fresh material, failure to disclose material evidence, and proper statutory approval. The writ petitions were dismissed, and the connected miscellaneous petitions were closed.

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