Delhi HC: RATNAGIRI GAS AND POWER PVT. LTD. V. ASSISTANT COMMISSIONER OF INCOME TAX [W.P. (C) 221/2023]
Background: The Petitioner. Ratnagiri Gas and Power Pvt. Ltd. filed a Petition challenging a reassessment notice issued under Section 148 of the Income Tax Act, 1961 for the A.Y. 2013-14. Essentially, the Petitioner was aggrieved by the initiation of reassessment proceedings for A.Y. 2013-14, which were commenced by the issuance of a notice dated 24.05.2021 under section 148 of the Act. The said notice was subsequently deemed to be a notice under section 148(b) of the Act, in terms of the decision of the Supreme Court in Union of India & Ors. V. Ashish Aggarwal [2022 SCC OnLine SC 543]. The Petitioner also impugns the said notice as well as an order dated 02.12.2022 passed under section 148 A(d) of the Act, which was issued pursuant to the aforementioned notice dated 24.05.2021.
Decision: The High Court ruled in favor of the Petitioner. The court set aside the reassessment order and the reassessment notice, concluding that the reassessment proceedings are barred by limitation. The court reasoned that the conditions for issuing a reassessment notice under section 149(1)(b) of the Income Tax Act were not met, as there was no evidence that the income that escaped assessment was represented in the form of an asset. Additionally, the court found that the petitioner had fully disclosed all relevant facts in its income tax return, and the reassessment was initiated based on the company’s expenses, which is not a valid ground for reassessment.
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