Court: Supreme Court
Head Notes:

S. 147 Reopening Guidelines

The Supreme Court has dismissed the SLP filed by the Department against the guidelines laid down by the Delhi High Court in matters of reopening of assessments

We are not inclined to interfere with the impugned judgment and order passed by the High Court. Hence, the Special Leave
Petition is dismissed.

Guidelines laid down by the High Court in SABH INFRASTRUCTURE LTD vs. ASSTT. COMMISSIONER OF INCOME TAX W.P.(C) 1357/2016

“19. Before parting with the case, the Court would like to observe that on a routine basis, a large number of writ petitions are filed challenging the reopening of assessments by the Revenue under Sections 147 and 148 of the Act and despite numerous judgments on this issue, the same errors are repeated by the concerned Revenue authorities. In this background, the Court would like the Revenue to adhere to the following guidelines in matters of reopening of assessments:

(i) while communicating the reasons for reopening the assessment, the copy of the standard form used by the AO for obtaining the approval of the Superior Officer should itself be provided to the Assessee. This would contain the comment or endorsement of the Superior Officer with his name, designation and date. In other words, merely stating the reasons in a letter addressed by the AO to the Assessee is to be avoided;

(ii) the reasons to believe ought to spell out all the reasons and grounds available with the AO for re-opening the assessment – especially in those cases where the first proviso to Section 147 is attracted. The reasons to believe ought to also paraphrase any investigation report which may form the basis of the reasons and any enquiry conducted by the AO on the same and if so, the conclusions thereof;

(iii) where the reasons make a reference to another document, whether as a letter or report, such document and/ or relevant portions of such report should be enclosed along with the reasons;

(iv) the exercise of considering the Assessee’s objections to the reopening of assessment is not a mechanical ritual. It is a quasi judicial function. The order disposing of the objections should deal with each objection and give proper reasons for the conclusion. No attempt should be made to add to the reasons for reopening of the assessment beyond what has already been disclosed.

Section(s): 147, 148
Counsel(s): For Petitioner(s) Mr. N Venkatraman, A.S.G, For Respondent(s) Mr. Salil Kapoor, Adv.
Dowload Pdf File Click here to download the file in pdf format
Uploaded By Advocate Mukesh
Date of upload: February 17, 2024
  1. S. Rajeswara Rao says:

    it is in compliance to these directions CBDT issued Standard Procedure for recording reasons for reopening under sec. 147 on 10/01/2018. These are in the nature of directions and as per provisions of sec. 119 these directions are binding on the Revenue. These directions were formally brought into the Act through amended provisions of sec. 147 to 151A of the Act. But during pendency of bringing the directions on rule book i.e. from 10/01/2018 to 01/04/2021 these directions are found not followed in the desired maner, especially the inquiry mandated in para-4 before recording reasons of escapement of income to bring in live link between the information and satisfaction. In one of the matters Raipur Bench of ITAT (SMC) observed that the SOP is internal guidelines. But after advent of outcome of SLP in Sabh Infra I think the Hon’ble Court can be persuaded to consider this vital argument. It is welcoming.

Leave a Reply

Your email address will not be published. Required fields are marked *