2023 (5) TMI 963 - HC - Income Tax

Validity of Reopening of assessment - assessment of the petitioner company was not done u/s 143(1) but u/s 143(3) - Deduction u/s 80IC - HELD THAT:- As the proceeding initiated against the petitioner company u/s 148 is found vitiated on two counts, viz., in this case, the petitioner (assessee) had made full and true disclosure of facts at the time of original assessment and also at the time of scrutiny proceeding u/s 143(2) and 143(3) - Assessee had no duty beyond that. It was for the assessing officer to draw correct inference from the primary facts. Therefore, if subsequent to assessment made u/s 143(3) AO draws an inference that assessment made by him was erroneous, such a change in opinion would not justify action for re-opening assessment.

Sanction / Satisfaction of the proper authority u/s 151(1) - Income Tax Officer, Ward-I, Tinsukia had obtained satisfaction of Additional Commissioner of Income Tax, an authority who is not covered by the provision of Section 151(1) - The said notice was issued after obtaining the satisfaction of the Additional Commissioner of Income Tax. Thus, it prima facie appears that in view of the prescription of Section 151(1) by necessary implication, the "Additional Commissioner of Income Tax" would not be same as "Principal Chief Commissioner" or "Chief Commissioner" or "Principal Commissioner" or "Commissioner" of Income Tax. Therefore, on the ground that the Income Tax Officer, Ward-I, Tinsukia had obtained satisfaction of Additional Commissioner of Income Tax, an authority who is not covered by the provision of Section 151(1) as it stood on 01.01.2019, the proceeding initiated against the petitioner company by issuance of notice u/s 148 is held to be not in accordance with law.

A possible plea could have been raised by the Income Tax authorities that this writ petition would not be maintainable as the petitioner could avail ordinary remedy of filing an appeal against the order of re- assessment.

Thus under the unique facts of this case, this writ petition under Article 226 of the Constitution would be maintainable because the two pre-conditions for exercise of power under Section 148 of the Income Tax Act, 1961 does not exist in this case. However, this observation is qua this case and is not to be considered as a precedent in any other case.

Notices quashed.