Section 40(a) — the law in short
What the courts have decided on section 40(a), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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German Remedies Ltd v DCIT
High CourtHelps taxpayer
My scrutiny assessment is being reopened more than four years later, and the Commissioner signed the section 151 approval the same day the file reached him. Can I have the notice quashed?
Yes. The Bombay High Court quashed the section 148 notices and the orders rejecting the objections. Three things were fatal. The recorded reasons were unsustainable: the tax deduction details were on record in Form No.27 and in the tax audit report, and the closing stock valuation had already been examined in the original assessment. Reopening beyond four years without alleging any failure to disclose fully and truly cannot stand. And the approval under section 151 showed non-application of mind - the Assessing Officer carried the file to the Commissioner and approval was granted the same day, in his presence, without considering either the four-year bar or whether there had been any failure to disclose.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.
