Prabhat Properties Private Limited v. Assistant commissioner of Income tax [Writ petition no. 2827 of 2022] (Bombay High Court)
Assessee company filed its income tax return for A.Y. 2015-16, with an assessment completed under section 143(3) on November 15, 2017, assessing total income at Rs. Nil. However, the Income Tax Officer (ITO) received information suggesting undisclosed income from trading activities. Subsequent verification revealed a net profit after setting off losses, prompting the assessing officer to believe that income had escaped assessment.
Despite detailed assessment proceedings, a notice under section 148 was issued on March 31, 2021. Respondent No.1 relied on judgments to argue that reassessment doesn’t require considering the accuracy of information. However, the petitioner contested this, citing the Ananta Landmark case, which set criteria for reopening assessments.
The petitioner raised the argument that, as per Section 103 of the Evidence Act, the responsibility of proving a fact lies with the party making the claim, unless stated otherwise by law. They asserted that by providing all the necessary details and documents, they had shifted the burden onto the AO, who should then thoroughly examine the evidence and provide valid reasons to question the petitioner’s explanations.
After careful examination of the objections to the notice, it was discovered that there was no direct connection between the alleged SEBI orders and the petitioner’s transactions. Furthermore, the Respondents failed to specify the specific details of the information that led to the belief of income evasion. It was concluded that there was no new substantial evidence to support the claim of income evasion, indicating that the reopening of the assessment was merely a ‘change of opinion’.
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