Delhi HC: IT Assessment Can’t Be Re-opened Without Any Evidentiary Material U/S 148

An income tax assessment cannot be reopened u/s 148 of the Income Tax Act without new material evidence and quashed the reassessment proceedings initiated for the Assessment Year 2015-16, Delhi HC held.

The reassessment has been contended by the applicant on the basis that it was limited to time under the First Proviso to Section 149(1) of the Act. It was remarked by the court that the reassessment notice issued in July 2022 was beyond the set time limit, and no new material was there or proof could ease the reopening of the assessment.

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There is been the initiation of the reassessment proceedings on the grounds of the information available in the original assessment, which does not qualify as new material. The HC stresses that reopening the assessments should be on the grounds of the updated proof or materials that are recommended income has not been evaluated.

It was argued by the applicant that as no new proof was furnished the reassessment measure can be unsustained. It was remarked by the Delhi High Court Division Bench of Justice Yashwant Varma and Justice Ravinder Dudeja that reopening past assessments without new data is not permissible, keeping the integrity of time-limited protections under the Income Tax Act.

The judgment shows the procedural safeguards that the Finance Act 2021 introduces, which needs stringent compliance to secure the assesses’ rights. It was remarked by the Bench that, we know that no fetter function on the AO to opt for the remedial measures and comply or adopt the process cited via Section 148A before 31st March 2022.

The same aspect is believed added importance in light of the writ applicant itself which has drawn the attention of the respondents to the revised process for reassessment. Therefore the AO was duly apprised and placed on notice of the above-mentioned aspects, but it was not able to opt for any corrective measure.

For the above said reasons it ruled that we permit writ petition and quash the impugned notice referable to section 148A(b) of the Act dated 27 May 2022, order u/s 148A(d) of the Act dated 30 July 2022, notice referable to Section 148 of the Act dated 30 July 2022 and all consequential proceedings thereto.