Resuming is forbidden as it falls within the purview of the change of opinion – Bombay High court

Case No.: Writ Petition No.4574 Of 2022

Case Title: Hasmukh Estates Pvt. Ltd. Versus ACIT

RESERVED ON: 31st October 2023

 PRONOUNCED ON: 8th November 2023


Counsel For Petitioner: K. Shivaram

Counsel For Respondent: Suresh Kumar




The High Court of Bombay has contended that resuming is against the laws as it distinctly falls within the purview of the change of opinion which is against the laws.

The bench of Justice K. R. Shriram and Justice Neela Gokhale had noticed that the ground on which the AO issued notice asserting that there was information that puts forward that escapement of income was an internal audit objection. Information is explained in Section 148 of the Act to mean “any objection raised by the Comptroller and Auditor General of India…” and no one else. It means the reopening of the assessment is against the law.

Facts of the Case

Petitioner, a private company engaged in the business of undertaking real estate projects, sold a plot of land situated at Raigad District to one Regency Nirman Limited by a registered agreement to sell dated 7th October 2011 for a consideration of Rs.18 Crores. The property was valued at Rs.16.50 Crores for the purpose of stamp duty.

It was agreed between the Petitioner and the purchaser that in case the Petitioner was unable to discharge any obligation under the agreement, damages shall be settled.

on non-fulfilment of some obligations on the part of Petitioner, the consideration was reduced by Rs.6 Crores making the consideration payable for the land at Rs.12 Crores. Petitioner e-filed its return of income on 31st March 2017 declaring income of Rs.8,43,58,620/- and booked profits under Section 115JB of the Act at Rs.9,72,27,472/-. An assessment order came to be passed on 26th December 2017 accepting Petitioner’s figure of Rs.12 Crores

The submission of Petitioner to the AO in the original assessment proceedings in respect of the sale of land was that Section 50C of the Act was not applicable as the sale consideration of Rs.18 Crores was higher than the stamp valuation of Rs.16.50 Crores.

the AO conveying that according to the order of the Apex Court in the matter of Union of India v. Ashish Agarwal, a copy of the approval under Section 151 of the Act and the reasons recorded before the issuance of notice under Section 148 of the Act were being forwarded to it. Petitioner was called upon to respond in support of its claim to enable Respondent to pass an order under Section 148A(d) of the Act.

Another important contention raised by Dr. Shivaram is the meaning of ‘information’ which comprises information with the AO which suggests that income chargeable to tax has escaped assessment. The First Explanation to Clause (ii) of Section 148 of the Act

Analysis of the Court

The court has held that the ACIT has once again maintained its objections. The AO did not properly examine the allowability of the Rs. 6 crore expense under the long-term capital gains head. Hence, the audit objection was accepted, leading to the re-opening of the assessment of the income of the petitioner

There shall be no order as to costs.

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Written By

Kaulav roy chowdhury

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