WHETHER NOTICE U/S 148 CAN BE ISSUED WITHOUT MENTIONING WHAT ASSESSEE FAILED TO DISCLOSE?

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Short note of today's case law for quick reference:

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[2024] 464 ITR 261 (Bom)

[IN THE BOMBAY HIGH COURT—AT GOA]

(1) SOCIEDADE DE FOMENTO INDUSTRIAL PVT. LTD.

(W. P. No. 233 of 2015)

(2) SHANTILAL KHUSHALDAS AND BROTHERS PVT. LTD.

(W. P. No. 883 of 2016)

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ASSISTANT COMMISSIONER OF INCOME-TAX AND OTHERS

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1. Notice u/s 148 for A.Y. 2008-09 was issued on 20.10.2014 claiming that there was a reason to belief that income chargeable to tax has escaped assessment.

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2. Thus, it was clear that such notice u/s 148 was issued beyond 4 years and thus additional reasons had to be there that though the assessee was aware supressed the material facts while submitting the returns.

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3. The Supreme Court in the year 2014 for the first time declared that the mining lease in GOA beyond 22.11.2007 were illegal.

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4. Thus, prior to 2014, i.e. declaration by the Supreme Court neither the assessee nor the A.O. had knowledge that such lease was illegal, the question of making such declaration in the year 2008-09 or 2011-12 while submitting the returns would not arise.

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5. That the A.O. except quoting a few portions from the third Shah Commission report and the directorate of revenue intelligence (Mumbai) failed to link such material to believe on his part that income chargeable to tax had escaped assessment.

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6. Bombay High Court on writ petition held that:

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7. First of all, placing reliance only on the opinion in the third Shah Commission report without independently assessing on record reasons by the A.O. was a jurisdictional error on the part of such officer.

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8. Secondly when the notice was issued beyond the period of 4 years, conditions regarding disclosure to be made fully and truly was also not established for the simple reason that the lease in question was illegal beyond on 02.11.2007 was not in the knowledge of the assessee while submitting returns for the A.Y. 2008-09 & also for the year 2011-12.

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9. The Court may in exercise of its powers ascertain whether the Income tax Officer had in its possession any information and the court may also determine whether from that information the officer may have reason to believe that the income chargeable to tax had escaped assessment.

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10. The notices were quashed.

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