Providing the much-needed respite to the Yashraj Films Limited, the Bombay high court has set aside a notice issued by the Income Tax (I-T) department alleging tax evasion of Rs94 lakh by the production house.
A division bench of justice JP Devdhar and justice Mridula Bhatkar last week allowed the appeal filed by Yashraj challenging the second demand notice issued by the revenue department of the I-T seeking reopening of assessment for financial year 2004-05.
The I-T had issued a second notice to Yashraj on March 22, 2010, under section 148 of the Income Tax Act alleging that the production house had evaded tax worth Rs94 lakh.
While setting aside the I-T notice terming it as invalid, the court also pulled up the Assessment Officers (AO) for not taking timely action. The judges have observed: “In the present case, the notice is invalid not because it is the second notice, but because, there was no failure to disclose fully and truly all material facts.” They also rapped the AOs while dictating the order in open court.