Reassessment under sec 147 cannot be made on the basis of audit objection : HC

Delhi High Court in matter of FIS GLOBAL BUSINESS SOLUTIONS INDIA PVT. LTD. v/s PRINCIPAL COMMISSIONER OF INCOME TAX-3, NEW DELHI & ANR.

Summary :

In this matter Delhi High Court has held that the audit objection is merely an information based on which, re-assessment under section 147/ 148 of the Income Tax Act, 1961 cannot be made.

Reassessment under sec 147 cannot be made on the basis of audit objection : HC

The Extract of Writ Petition is Given below :

6. This Court is of the opinion that Carlton (supra) concludes the issue in the present case; the audit objection merely is an information. As reiterated in Kelvinator (supra) by the Supreme Court, change of opinion is impermissible. The Revenue was clearly barred by provisions of Section 147/148 of the Act.

7. In the present case, the reassessment notice is solely based on an audit opinion. Having regard to the fact that the assessees challenge to the previous years re-assessment orders was successful – in FIS Global Business Solutions India Pvt. Ltd. v. ACIT 2018 (408) ITR 75 (Del), the reassessment proceedings are unsustainable.

8. In view of the above discussion, the impugned re-assessment notice dated 31.03.2018, cannot be sustained. It is hereby quashed; all consequential proceedings issued and conducted pursuant to the said reassessment notice are also hereby quashed.

9. The writ petition is disposed of in the above terms. Pending application also stands disposed of.