Hasmukh Estates Pvt Ltd v. ACIT ( Bom)(HC)

S. 148A: Reassessment – Conducting inquiry, providing opportunity before issue of notice – Information – Internal Audit objection- Not permissible – Information not based on the objection raised by the Comptroller and Auditor General of India – Reassessment impermissible- Change of opinion- Audit objection raised by CAG a view deviating from that which was taken in the course of original assessment order is change of opinion -Impermissible . [ S. 45, 48, 50C, 148 ,148A(b), 148A(d), 151 Art. 226 ]

In the course of assessment proceedings the Assessing Officer has  raised  a specific  query  as regards the applicability of the section 50C of the Act . After considering the submission of the petitioner the proposed addition was dropped . After the judgement of the supreme Court in UOI v. Ashish Agarwal  (2022 ) 444 ITR 1  (SC)   the reassessment proceedings were initiated against   the petitioner on the basis of  Internal Audit  objection .  The objection of the petitioner was rejected  and an order was passed under section 148A(d) of the Act . On writ the petitioner has prayed for quashing of the order was various grounds . One of the grounds was as the alleged information from the Internal Audit and not from the Comptroller and Auditor General of India  hence  the reassessment proceedings are bad in law.  The petitioner has also raised the grounds  on  change of opinion .   Allowing the petition the Court held that , information  from  Internal Audit objection is  not  permissible  as the information  was  not based on the  objection raised by the Comptroller and Auditor General of India .Court also held that  audit objection raised by  CAG  a view deviating from that which was taken in the course of original assessment order is change of opinion   which is impermissible  . (WPNo. 4574 of 2022 dt 8. 11-2023 ) ( AY. 2015 -16 )

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