A bench of justices M S Sanlecha and S F Vajifdar dismissed the Income Tax Commissioner's appeal in a recent judgement, upholding the Income Tax Tribunal's order.
The IT tribunal had on March 19, 2010 ruled that the assessment officer was not justified in reopening the assessment proceedings of the actor's income for 2002-03 under section 147 of IT Act.
The high court bench said the Commissioner of Income Tax (Appeal) as well as the Income Tax Tribunal had correctly come to the conclusion that there was no "fresh tangible material" before the assessment officer to reach a reasonable belief that some of the actor's income, liable to be taxed, had escaped assessment.
"In the circumstances there could be no basis for the Assessing Officer to form a belief that income has escaped assessment. It is a settled position of law that review under the garb of reassessment is not permissible. We uphold the Tribunal's order of March 19, 2010," the bench ruled.
For assessment year (AO) 2002-03, Bachchan had filed returns on 13 October 2002, declaring his income to be Rs 14.99 crore. Thereafter, on March 31, 2002, he filed revised returns declaring his total income for AO 2002-03, claiming 30 percent adhoc expenses amounting to Rs 6.31 crore and determining his income at Rs 8.11 crore.
However, before the assessment for AO 2002-03 could be completed, the actor, by a letter dated March 13, 2004, withdrew his revised returns along with his claim of deduction of 30 percent adhoc expenses from his total income.
The Income Tax Assessing Officer, however, completed the assessment for AO 2002-03 on March 29, 2005 and determined the actor's income at Rs 56.41 crore. (More)