Change of Opinion – Audit Objection – Reopening of Assessment – Failure to File Timely Reply – Availability of Alternate Remedies – Discretionary Jurisdiction Not Invoked

The court dismissed the petition, holding that: a) The petitioner failed to file a timely reply or seek an extension for the same. b) Suppression of annexures and incomplete submissions prevented the court from examining the facts. c) The petitioner had alternate remedies available under the Income Tax Act, 1961. d) The legal question of whether reopening can be based on an audit objection post-amendment was left open for examination in an appropriate case.

The court declined to exercise its discretionary and extraordinary jurisdiction, emphasizing the petitioner’s failure to provide complete material and the availability of alternate remedies before the appellate authority.

Failure to File Timely Reply (Para 14) Suppression of Documents (Para 16) Availability of Alternate Remedies (Para 25) Legal Question Left Open for Future Examination (Para 24)

Acts and Sections Discussed:

• Income Tax Act, 1961 – Section 57 – Deduction – Section 142(1) – Scrutiny Notice – Section 143(3) – Assessment Order – Section 148 – Reopening of Assessment – Section 148A(b) – Show Cause Notice – Section 148A(d) – Order for Reopening

Subjects:

Change of Opinion – Audit Objection – Reopening of Assessment – Nexus Between Income and Deduction – Suppression of Documents – Failure to Submit Reply – Alternate Remedies – Discretionary Jurisdiction

Nature of the Litigation: The petitioner challenged the order passed under Section 148A(d) of the Income Tax Act, 1961, and the notice issued under Section 148 of the Act for the assessment year 2017-18.

Relief Sought by the Petitioner: The petitioner sought quashing of the notice issued under Section 148 of the Act on the grounds that reopening based on an audit objection amounted to a change of opinion.

Reason for Filing the Case: The petitioner contended that the issue for which reopening was sought had already been examined during the original assessment proceedings and, therefore, the reopening was impermissible.

Previous Decisions:

• Assessment order under Section 143(3) of the Act was passed on 24 December 2019, accepting the returned income.

Issues:

a) Whether reopening based on an audit objection amounts to a change of opinion. b) Whether the failure to file a timely reply to the show cause notice precludes the petitioner from raising objections. c) Whether suppression of documents annexed to replies and submissions prevents the court from exercising its extraordinary jurisdiction.

d) Whether the petitioner had alternate remedies under the Income Tax Act, 1961.

Submissions/Arguments:

Petitioner: a) Reopening based on an audit objection is not permissible and amounts to a change of opinion. b) The issue had already been examined in the original assessment proceedings. c) Relied on the judgments of Mira Bhavin Mehta, Knight Riders Sports Pvt. Ltd, and Dilip Laximan Powar.

Respondent: a) Reopening was justified under Explanation-1 to amended Section 148 of the Act. b) The petitioner failed to file a reply within the stipulated time and did not seek an extension. c) Documents referred to in the submissions were not annexed, preventing factual examination by the court.