The Bombay High Court allowed a writ petition challenging an income tax reopening order. Finding the action based on a change of opinion regarding Section 10AA exemption, the court quashed the notice and impugned order.
Quashed the impugned notice dated 31.3.2021 and the impugned order dated 21.10.2021.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
911_WP3928_21.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.3928 OF 2021
Diamond Forever International … Petitioner Vs.
Deputy Commissioner of Income Tax and others … Respondents
Mr. Percy Pardiwalla, Senior Advocate a/w. Mr. Madhur Agarwal i/b. Saldanha Ryan Rudolp for Petitioner.
Mr. Sham V. Walve for Respondents.
CORAM : K. R. SHRIRAM & R. N. LADDHA, JJ. DATE : JANUARY 18, 2022
P.C. :-
“Statutory notices u/s.143(2) & 142(1) were issued and assessment was finalised by the then AO accepting the returned income of Rs.Nil after allowing deduction u/s.10AA in toto.
On perusal of the assessment record, it is observed that the P&L account of the assessee firm does not show any activity like manufacturing or production or rendition of services, though the unit is in SEZ. Thus, the assessee firm is not satisfying the mandatory conditions as specified in section 10AA(1) of the Act of its engagement in the activity of manufacturing or production of articles for rendition of services. For the sake of convenience, section 10AA(1) of the Act is reproduced hereunder:”
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911_WP3928_21.doc
in toto . In fact, the assessment order dated 6th July 2015 also provides,
“The assessee has claimed exemption u/s.10AA of the IT Act, 1961. The eligibility conditions are verified and after verification the same is allowed.”
(R. N. LADDHA, J.)
Minal Parab
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2 issues framed by the court
Whether the reopening of income tax assessment under Sections 143(2) and 142(1) was based on change of opinion by the Assessing Officer.
Whether the High Court can issue a writ of certiorari to quash the impugned notice and order.
2 provisions across 2 enactments
Diamond Forever International
Deputy Commissioner of Income Tax and others
K. R. SHRIRAM
R. N. LADDHA
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
