Court sets aside reassessment order for AY 2009-10, finding lack of tangible material and procedural errors.

The court set aside the re-assessment order for AY 2009-10 under Section 147 read with Section 143(3) of the Income Tax Act, noting the petitioner's full disclosure of material facts and the assessing officer's failure to follow proper procedure. The court found the reasons for reopening assessment lacked tangible material and were based on the petitioner's rectification application claim. The writ petition was allowed with no costs, and the pending application was disposed of.

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Issues:
1. Re-assessment order challenge for AY 2009-10 under Section 147 read with Section 143(3) of the Income Tax Act, 1961.
2. Valuation of closing stock based on parent seed charges.
3. Rectification application under Section 154 of the Act.
4. Reopening of assessment under Section 147 of the Act.
5. Failure to follow proper procedure in passing re-assessment order.

Analysis:
1. The petition challenged the re-assessment order for AY 2009-10 under Section 147 read with Section 143(3) of the Income Tax Act, 1961. The petitioner, engaged in agricultural activities to develop hybrid seeds, faced issues regarding the valuation of closing stock based on parent seed charges.
2. The petitioner had filed a rectification application under Section 154 of the Act due to a change in the method of valuation of closing stock. The assessing officer (AO) acknowledged the mistake and rectified the assessment order accordingly.
3. Subsequently, another AO issued a notice under Section 147 of the Act, stating that the petitioner's income had escaped assessment. The reasons furnished highlighted the petitioner's failure to claim the change in the valuation policy in the original return of income or through a revised return.
4. The court observed that the AO did not follow the proper procedure of passing a separate order on the objections filed by the petitioner before proceeding with the re-assessment. The court found the reasons for reopening the assessment lacked tangible material and were based on the petitioner's rectification application claim.
5. The court set aside the re-assessment order, noting that the petitioner had made a full and true disclosure of all material facts regarding the change in valuation method. The court also highlighted the AO's failure to comply with the procedure outlined in a Supreme Court decision. The writ petition was allowed with no costs, and the pending application was disposed of.

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