TaxTMI 
TaxTMI 
2012 (8) TMI 145
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....clare section 147 of the Income Tax Act, 1961 in so far as it permits the Assessing Officer to reopen the assessment on a mere change of opinion as unconstitutional being violative of Articles 14 and 19 of the Constitution and to issue a mandamus restraining the opposite party, his subordinates and agents from acting pursuant to section 147 of the Income Tax Act,1961. 2. Relevant brief facts are stated for the purpose of appreciating the rival legal contentions of the parties to find out if the petitioner is entitled for the relief as sought for in this writ petition. 3. The case of the petitioner is that the assessing officer issued the impugned notice on erroneous premises that the entire depreciation allowance for the period from Asses....
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....d order of the Commissioner of Income Tax (Appeals) before the Income Tax Appellate Tribunal which is pending adjudication. Therefore, issuance of the notice is contrary to the second proviso to section 147 of the Act which specifically prohibits reassessment proceedings in respect of the income which is the subject matter of an appeal. 4. The opposite party is seeking to disallow the unabsorbed depreciation for the assessment years prior to and including 1997-98 aggregating Rs. 425.78 crores on the patently erroneous ground that the amendment to section 32(2) by the Finance Act, 2001 being prospective, only the depreciation pertaining to assessment year 2002-03 and thereafter can be set off and carried forward without any restriction as r....
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....s return furnished in response to the said notice without prejudice to its submission that the said notice has been issued without jurisdiction and is, therefore, not valid. In support o f the said contention, learned Senior Counsel Mr. Ganesh for the petitioner has placed reliance on the decision of the Supreme Court in GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19/[2002] 125 Taxman 963 wherein the Supreme Court has made observation that the opposite party shall provide the reasons for issuing the impugned notice before commencing the proceedings under section 148 of the Act on furnishing the return of income by the assessee. The said letter is also produced in this writ petition. 6. The action of the assessing officer is contrary....
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.... forward during the relevant assessment year 2006-07 by virtue of the provision of Section 32(2) of the Income Tax Act., as the said provision was amended by Finance Act, 2001 with effect from 1.4.2002. The said provision was explained by the Finance Minister in his speech while moving Finance Bill 1996 by which the amendment was made. With regard to the reliance placed upon the amendment of Section 32(2) by the Finance Act, 2001 with effect from the assessment year 2002-03, it is stated that though the restriction of eight assessment years was removed by the said amendment, the said amendment was prospective in nature. It is specifically stated that the assessing officer has reason to believe that any income chargeable to tax has escaped a....
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....on to which the petitioner is not entitled to; (c) What order? 9. For this purpose, it is necessary to extract the reasons for the show cause notice issued under section 147 for assessment of the escaped income chargeable under the provisions of the Act. Paragraphs 3 and 4 are relevant which are extracted hereunder: "3 The AO disallowed the unabsorbed depreciation allowance pertaining the assessment year 90-91,91-92,92-93 aggregating to Rs. 182,74,22,000/- for the purpose of being carried forward for the reason that such allowance had already lapsed for being carried forward before the relevant assessment year. He considered the remaining amount of Rs. 319,41,24,000/- (Rs. 502,15,46,000/--Rs. 182,74,22,000/-) as eligible to be set off aga....
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....h the amendment was made." 10. Paragraph 3 is relatable to disallowance of unserved depreciation amount of Rs. 182,74,22,000/- pertaining to assessment years 1990-91, 92-93 and 92-93. Appeal was carried before the Commissioner of Income Tax (Appeals) challenging such disallowance which was allowed by the latter for the reason stated in his order. Challenging the order of the Commissioner of Income Tax (Appeals), the Department preferred appeal before the Tribunal which is now pending. Now the Department initiates the reassessment proceeding under Section 147 on the ground that depreciation amounting to Rs. 24.304 lakhs has been wrongly allowed pertaining to the assessment year 1993-94 to 1997-98 to which the petitioner was not entitled. Th....