The Karnataka High Court has emphasized that reassessment proceedings under the Income Tax Act should not be treated as a form of review.

Justice S Sunil Dutt Yadav, in a recent case, stated that reassessment cannot be likened to a review process. The court ruled that the information revealed during the assessment for the 2008-2009 fiscal year should not be sufficient grounds for initiating reassessment proceedings.

Furthermore, the court highlighted that granting a review based on a change of opinion is impermissible. In the context of the case, the court expressed that revisiting a decision to further reduce the eligible deduction under Section 10A of the Income Tax Act would amount to a review based on a change of opinion, which is not allowed.

The case involved a petitioner seeking a declaration that the proceedings initiated by the Deputy Commissioner of Income Tax under Sections 147 and 148 were time-barred and lacked jurisdiction. The challenge focused on the notice for the Assessment Year 2005-2006 and the subsequent rejection order.

The petitioner's initial assessment allowed a deduction under Section 10A, but the Commissioner of Income Tax later deemed it erroneous, leading to a fresh assessment order in 2010 with additional disallowances.

Before the High Court, the petitioner argued that the deductions under Section 10A in the assessment order were computed with exclusions, particularly excluding expenditures related to employee visits and expenses for software development services. The court held that the material relied upon was incomplete and refused to conclude that there had been an escapement of income based on certain declarations.

The court also declined to revisit the Assessing Officer's decision to further reduce the eligible deduction, emphasizing that specific expenditures incurred by the assessee had already been excluded.

Case: EIT Services India Pvt. Ltd. vs The Deputy Commissioner of Income Tax & Anr.

WRIT PETITION No.15061/2013 (T-IT) C/W WRIT PETITION No.43236/2013, WRIT PETITION No.43237/2013 In W.P. NO.15061/2013.