{"id":1936,"date":"2010-08-11T14:42:12","date_gmt":"2010-08-11T09:12:12","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=1936"},"modified":"2010-08-11T14:42:12","modified_gmt":"2010-08-11T09:12:12","slug":"hindustan-unilever-vs-dcit-bombay-high-court-s-147-reopening-for-rectifying-s-154-mistakes-is-invalid","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/hindustan-unilever-vs-dcit-bombay-high-court-s-147-reopening-for-rectifying-s-154-mistakes-is-invalid\/","title":{"rendered":"Hindustan Unilever vs. DCIT (Bombay High Court)"},"content":{"rendered":"\n\n
Click here to download the judgement (hindustan_lever_mistakes_reopening.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n

S. 147 reopening for rectifying s. 154 mistakes is invalid <\/strong><\/p>\n

The AO issued a notice u\/s 148 to reopen the assessment within 4 years from the end of the assessment year. There were four recorded reasons and one of them was that the AO had committed a computational error in the assessment order by deducting the wrong figure instead of the right figure. The assessee filed a Writ Petition to challenge the reopening inter alia on the ground that as the mistake could be rectified u\/s 154, the reopening was bad<\/em>. HELD upholding the challenge:<\/p>\n

(i) While Explanation 2 to s. 147 deems income to have escaped assessment if excessive deduction is allowed, the reopening of an assessment u\/s 147 has serious ramifications because the AO is empowered to reassess income even in respect of issues not set out in the notice<\/strong>. Therefore, if the power to rectify an order u\/s 154(1) is adequate to meet a mistake or error in the order of assessment, the AO must take recourse to that power as opposed to the wider power to reopen the assessment<\/strong>. If the error can be rectified u\/s 154, it would be arbitrary for the AO to reopen the entire assessment u\/s 147. Further, the error in the order was not attributable to a fault or omission on the part of the assessee and the assessee cannot be penalized for a fault of the AO<\/strong>;<\/p>\n

(ii) When one or more modes of assessment or remedies are available to the taxing Authority, the Authority must adopt that remedy which causes least prejudice to the assessee. <\/p>\n

\nFor more on the law of reopening of assessments u\/s 147, see the Digest of Important Case Laws<\/a><\/strong>.\n<\/div>\n","protected":false},"excerpt":{"rendered":"

While Explanation 2 to s. 147 deems income to have escaped assessment if excessive deduction is allowed, the reopening of an assessment u\/s 147 has serious ramifications because the AO is empowered to reassess income even in respect of issues not set out in the notice<\/strong>. Therefore, if the power to rectify an order u\/s 154(1) is adequate to meet a mistake or error in the order of assessment, the AO must take recourse to that power as opposed to the wider power to reopen the assessment<\/strong>. If the error can be rectified u\/s 154, it would be arbitrary for the AO to reopen the entire assessment u\/s 147. Further, the error in the order was not attributable to a fault or omission on the part of the assessee and the assessee cannot be penalized for a fault of the AO<\/p>\n

Read more ›<\/a><\/div>\n

<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[4,5],"tags":[],"class_list":["post-1936","post","type-post","status-publish","format-standard","hentry","category-all-judgements","category-high-court"],"acf":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/1936","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/comments?post=1936"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/1936\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/media?parent=1936"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/categories?post=1936"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/tags?post=1936"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}