Govt banega crorepati?: Re-assessement of Amitabh Bachchan’s KBC income upheld [Read judgment]

The Supreme Court today held that the income received by Bollywood superstar Amitabh Bachchan as anchor of quiz show Kaun Banega Crorepati can be subject to re-assessment under Section 263 of the Income Tax Act..The apex court set aside the judgment of the Bombay High Court, which had ruled in favour of Bachchan. The judgment was delivered by a Bench comprising Justices Ranjan Gogoi and PC Pant. Senior Advocate Shyam Divan appeared for Amitabh Bachchan, while Solicitor General Ranjit Kumar represented the Income Tax Department..The tax claim by Revenue, to the tune of Rs. 1.6 crore, was made on the income earned by Bachchan as the anchor of KBC..The revenue had initially made an assessment in 2004. Subsequently, a fresh assessment was sought to be made in exercise of the powers under Section 263 of the Income Tax Act. This was on the ground that Bachchan did not submit the requisite books of account and documents and deliberately dragged the matter leading to one adjournment after the other. Eventually, the Assessing Officer, to avoid the bar of limitation, had no option but to “hurriedly” finalize the assessment proceedings which on due and proper scrutiny disclosed that the necessary enquiries were not made. On the said basis, the Commissioner of Income Tax (CIT) came to the conclusion that the assessment order in question was erroneous and prejudicial to the interests of the Revenue warranting exercise of power under Section 263 of the Act. Consequently, a fresh assessment was ordered..This was challenged by Bachchan before the Income Tax Appellate Tribunal (Tribunal) which ruled in favour of Bachchan. The Department’s appeal to the High Court also went in favour Bachchan whereupon the IT Department had appealed to the Supreme Court..The Court discussed at length the power of revision which can be exercised by revenue. The court held that the exercise of power of revision under Section 263 is not contingent on the giving of a show cause notice. Rather, what is required under the said provision is an opportunity of hearing to the assessee. Regarding such an opportunity being afforded to Bachchan, the Court held the following,.“At each stage of the revisional proceeding the authorized representative of the assessee had appeared and had full opportunity to contest the basis on which the revisional authority was proceeding/had proceeded in the matter. If the revisional authority had come to its conclusions in the matter on the basis of the record of the assessment proceedings which was open for scrutiny by the assessee and available to his authorized representative at all times it is difficult to see as to how the requirement of giving of a reasonable opportunity of being heard as contemplated by Section 263 of the Act had been breached in the present case.”.The Court, therefore, set aside the order of the High Court and Tribunal and restored the order of the CIT. The Court also granted Bachchan the liberty to challenge the re-assessment made by the Revenue on merits..(This story was edited after the judgment was published. Image taken from here)