29 Nov Hasmukh Estates Pvt. Ltd. v. ACIT (Bombay High Court)

WP No. 4574 of 2022
S. 148A : Reassessment-Conducting inquiry, providing opportunity before issue of notice- Information–Internal Audit objection- Not permissible-Information not based on the objection raised by the Comptroller and Auditor General of India-Reassessment impermissible-Change of opinion-Audit objection raised by CAG a view deviating from that which was taken in the course of original assessment order is change of opinion-Impermissible. [S. 45, 48, 50C, 148, 148A(b), 148A(d), 151 Art. 226]
In the course of assessment proceedings the Assessing Officer has raised a specific query as regards the applicability of the section 50C of the Act. After considering the submission of the petitioner the proposed addition was dropped. After the judgement of the supreme Court in UOI v. Ashish Agarwal (2022) 444 ITR 1 (SC) the reassessment proceedings were initiated against the petitioner on the basis of Internal Audit objection. The objection of the petitioner was rejected and an order was passed under section 148A(d) of the Act. On writ the petitioner has prayed for quashing of the order was various grounds. One of the grounds was as the alleged information from the Internal Audit and not from the Comptroller and Auditor General of India hence the reassessment proceedings are bad in law. The petitioner has also raised the grounds on change of opinion. Allowing the petition the Court held that, information from Internal Audit objection is not permissible as the information was not based on the objection raised by the Comptroller and Auditor General of India. Court also held that audit objection raised by CAG a view deviating from that which was taken in the course of original assessment order is change of opinion which is impermissible. (WP No. 4574 of 2022 dt 8-11-2023) (AY. 2015-16)