Not making available material forming basis of reopening shows AO had prejudged the issue

AO stating that material forming basis of reopening shall be disclosed at the stage of assessment/re-assessment, indicates that the AO had prejudged the issue.

In a recent judgment, Hon’ble High Court has set aside order u/s 148A(d) holding that non making available material forming basis of initiation of re-assessment proceeding by merely stating that it would be disclosed at the stage of assessment/re-assessment, clearly indicates that the Assessing Authority had prejudged the issue.

ABCAUS Case Law Citation:
5061 (2026) (03) abcaus.in HC

In the instant case, the Petitioner/assessees had challenged the order u/s 148A(d) of the Income Tax Act, 1961 (the Act). The grievance of the Petitioner was that neither all the material that might have formed the basis for initiation of re-assessment proceeding, was made available, nor replies thereto had been considered in any objective manner.

It was submitted by the Petitioner that earlier order of the writ court with respect to affording opportunity to the assessee to object to the proposed assumption of re-assessment proceedings had not been complied with.

The Hon’ble High Court observed that in the impugned order, the Assessing Officer (AO) had only observed that material would be disclosed at the stage of assessment/re-assessment. That clearly indicated that AO had prejudged the issue.

The Hon’ble High Court observed that in an earlier order the Court had held that in view of the binding precedential law under the GKN Driveshafts judgment of Hon’ble Supreme Court, even the opportunity to object to the proposed reopening can not be denied prior to the introduction of statutory law under Section 148-A of the Act.

As a result, the Hon’ble High Court set aside the order impugned with direction that the Assessing Authority will make available to the petitioners all material that forms the basis for proposal to re-assess the petitioner. Thereafter the petitioner shall have two weeks to file fresh objections.

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