GLIMPSE OF A LATEST tax VERDICT* Rich Feel Health and Beauty P. Ltd. v. IT Officer Reported: [2022] 440 ITR 41 (Bom) Dated: 15.11.2021 *Hon’ble Justice K.R. Shriram and Hon’ble Justice Amit B. Borkar* in the matters relating to *“Section 148 of IT Act, 1961 – Reassessment

[1/25, 10:07] Sekarreporter 1: *GLIMPSE OF A LATEST VERDICT*
Rich Feel Health and Beauty P. Ltd. v. IT Officer
Reported: [2022] 440 ITR 41 (Bom)
Dated: 15.11.2021

*Hon’ble Justice K.R. Shriram and Hon’ble Justice Amit B. Borkar* in the matters relating to *“Section 148 of IT Act, 1961 – Reassessment Notice – Change of Opinion – Advertisement Expenses”* allowed the Writ Petition, quashing the reassessment notices and consequential orders issued by the Respondent, and further observed and held as follows:

i) *Facts:* The Petitioner filed return of income in September 2012 for assessment year 2012-13. The same was processed and intimation under S.143(1) of IT Act, 1961 was issued. During scrutiny assessment, Notice u/S. 142(1) was issued seeking details of advertisements. Thereafter, the return of income was accepted by the IT authority in November 2014. Subsequently, in March 2019, Respondent issued reassessment notice u/S. 148 of IT Act, 1961, stating that there was reason to believe, income chargeable to tax had escaped assessment. The Petitioner filed return of income and reply to the notice in April 2019, seeking reasons for reopening of assessment. Respondent issued letter in July, 2019 providing reasons, primarily that advertisement and marketing expenses were not deductible in view of S. 37 of the IT Act, since the Petitioner was prohibited under Medical Council Act, 1956. Thus, Writ Petition filed challenging S.148 Notice.

ii) *Referred*: _Ananta Landmark (P.) Ltd. v. Dy. CIT [2021] 439 ITR 168 (Bom)_ – Held – Where assessment was not sought to be reopened on reasonable belief that income had escaped assessment, on account of failure of assessee to disclose material facts, but however, the assessment was reopened due to change of opinion of the Assessing Officer (AO), reopening is not justified. Further Held – When primary facts necessary for assessment are fully disclosed, the AO is not entitled to change of opinion for commending reassessment proceedings. Further held, it would not be open for AO to reopen assessment based on very same material and take another view.

iii) *Referred*: _Jainam Investments v. Asst. CIT [2021] 439 ITR 154 (Bom)_ – Held – AO could not reopen assessment even within 4 years, merely on the basis of change of opinion, and AO has no power to review the assessment which is concluded unless there is tangible material to conclude that income had escaped assessment.

iv) *Findings*: The Assessing Officer in the original assessment was aware of the advertisements and marketing expenses and had applied his mind in the regular assessment proceedings, thus, it is not open for the Assessing Officer to reopen the assessment. Assessing Officer could not reopen the assessment merely on the basis of change of opinion.
[1/25, 10:07] Sekarreporter 1: 🌹🌹

You may also like...