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Issues involved: Challenge to notice u/s 148 of the Income Tax Act, 1961 for reopening assessment for AY 2003-04 beyond four years from the end of the relevant assessment year.
Summary: The High Court of Bombay heard the challenge to a notice dated 24/03/2010 issued u/s 148 of the Income Tax Act, 1961 seeking to reopen the assessment for AY 2003-04 beyond the prescribed time limit. The reassessment order passed on 7/12/2010 was also challenged during the pendency of the petition. The reasons recorded for reopening the assessment highlighted the claim of double deduction by the Assessee Trust, which was deemed to be in contravention of the law laid down by the Hon'ble Supreme Court of India. The assessing officer believed there was a failure on the part of the Assessee Trust to make full and true disclosure of material facts, leading to the escapement of income u/s 147 of the Income Tax Act, 1961. The Court observed that the assessment was sought to be reopened based on the material on record, without any failure on the part of the assessee to disclose all material facts. Referring to the proviso of Section 147, assessments beyond four years can only be reopened in case of such failure. Additionally, both counsels agreed that the question was covered against the revenue by a previous decision of the Court, leading to the quashing of the notice dated 24/03/2010 and the subsequent reassessment order passed on 7/12/2010. The Court made the rule absolute with no order as to costs, thereby setting aside the notice and the reassessment order.
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