2023 (9) TMI 848 - BOMBAY HIGH COURT

Reopening of assessment u/s 147 - reasonable belief that the income had escaped assessment - non considering of objections - HELD THAT:- In the present case, having regard to the law laid down by the Hon’ble Apex Court in S.A. Builders Ltd. [2006 (12) TMI 82 - SUPREME COURT] it was impossible for any prudent person to form a reasonable belief that the income had escaped assessment. The reasons which have been recorded could never have led a prudent person to form an opinion that income had escaped assessment within the meaning of Section 147 of the Act.

Even when those points were raised in the objections to the reopening notice filed by petitioner, Respondent No. 1 instead of dealing with the objections and submissions simply dismissed the same by saying that since there was no assessment done in the aforesaid case the department had no occasion to verify the veracity of the claim made in the income tax returns and all those points only have a bearing at the time of assessment to be undertaken in the proceedings and not on the issuance of notice u/s 148 - We fail to understand why these decisions could not have been taken at this stage itself so that the AO, having regard to the law laid down by the courts and on the submissions made by petitioner, could have discharged the notice u/s 148 of the Act. There is no reason to postpone it to the assessment proceedings stage.