D.K. Realty India Private Limited v. Assistant Commissioner of Income Tax, Circle 1(3)(1), Mumbai & Ors.

1. FACTS OF THE CASE

For AY 2017-18, the reopening reasons concerned deposits totalling Rs.9,65,50,000. Investigation information was already available before the original scrutiny. The officer specifically queried the transactions in November 2019 and received December 2019 replies before completing assessment.

Source: PDF p. 4

2. DISCUSSION BY THE COURT

Although the notice was within four years, the Court held that the requirement of reason to believe still applied. Reconsideration of transactions already examined, without fresh material, was an impermissible change of opinion.

Source: PDF p. 7

3. JUDICIAL DECISION

The section 148 notice dated 30 March 2021, rejection of objections dated 16 March 2022 and draft assessment dated 21 March 2022 were quashed. No costs were awarded.

Source: PDF p. 8

4. OUTCOME

Reassessment jurisdiction failed; the Court did not independently certify the commercial genuineness of every deposit.

Source: PDF p. 8

5. Expert Comments

AKHB editorial analysis, distinct from the Court’s findings.

Specific scrutiny establishes the prior examination

The targeted query and dated replies connect the original assessment to the same deposit issue. The information was available before that assessment, so its later reuse did not itself establish fresh material.

Source: PDF p. 4

Within four years still requires reason to believe

Absence of the additional beyond-four-year disclosure condition did not permit review of an already examined issue. The Court applied the change-of-opinion principle in Kelvinator to the actual assessment record.

Source: PDF p. 7

Retain the source year discrepancy

The opening and reopening reasons identify AY 2017-18, while paragraph 6 on PDF page 5 refers to AY 2016-17. This inconsistency is preserved rather than silently treating both years as adjudicated.

Source: PDF p. 5