Observing that review under the garb of reassessment was not permissible in law, the Bombay High Court has granted relief to mega star Amitabh Bachchan by dismissing an appeal filed by the Income Tax Commissioner who reopened the actor's assessment proceedings for 2002-03.
In their order, Justices M S Sanlecha and S F Vajifdar upheld an order of the Income Tax Tribunal which, on March 19, 2010, held that the assessment officer was not justified in starting proceedings under section 147 of IT Act against Bachchan.
The judges in their order passed recently further ruled that Commissioner of Income Tax (Appeal) and Income Tax Tribunal had correctly come to a conclusion that there was no tangible material before the assessment officer to reach a reasonable belief that the income liable to tax had escaped assessment.
On October 13, 2002, Bachchan had filed returns stating his income at Rs 14.99 crore for Assessment Year 2002-03. Thereafter, on March 31, 2002, he filed revised returns declaring his total income for the assessment year 2002-03 wherein he claimed expenses at 30 per cent ad hoc amounting to Rs 6.31 crore and determining his income at Rs 8.11
crore.
However, before the assessment for the Year 2002-03 could be completed, the actor, by a letter dated March 13, 2004, withdrew the revised returns along with his claim of deduction of 30 per cent ad hoc expenses from his total income.
On March 29, 2005, the Assessing Officer completed the assessment for the Assessment Year 2002-03 determining the actor's income at Rs 56.41 crore.
On April 5, 2006, a notice under Section 148 of the IT Act was issued to Bachchan seeking to reopen the assessment proceedings for the Year 2002-03.
Among the reasons given for reopening assessment were that books of accounts kept by Bachchan were not examined and that although he had seven bank accounts the actor had given details of only six of them. Besides, he had withdrawn revised returns wherein he showed 30 per cent expenses for professional causes.