In Brief
The Deputy Director of Income Tax sought to reopen Sumitomo Mitsui Banking Corporation's tax assessment by issuing a notice under Section 148 of the Income Tax Act, 1961. The High Court had quashed this notice, but the Supreme Court found the reopening justified. The authority had recorded that although the assessee claimed to have transferred bad debts for recovery, no evidence on record showed the mandatory write-off under Section 36(1)(vii). The Court allowed the appeal, set aside the High Court's order, and upheld the reopening notice, while reserving the assessee's right to challenge the subsequent reassessment on legal grounds.
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