TaxTMI 
TaxTMI 
2017 (11) TMI 921
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.....P.No.1855 of 2017 is taken up as a lead case and it would suffice to refer to the facts therein as the facts in the other cases are identical. The petitioner's case is that he grows coffee and after pulping and drying, sells the coffee as raw coffee and the process of pulping and drying is completely different from curing and mere pulping and drying the coffee seeds does not result in cured coffee. Proceeds of sale of raw coffee is an agricultural income exempted under Section 10(1) of the Act. In case of sale of cured coffee, 25% of the income is subjected to tax as business income under Rule 7B(1) of the Income Tax Rules (hereinafter referred to as "the Rules"). The petitioner had been assessed under the Act for several years including the subject assessment year 2009-2010, wherein the claim for exemption of income from sale of coffee subjected to only pulping and drying was accepted under Section 10(1) of the Act. The petitioner would state that there are several hundreds of coffee growers including the petitioner whose income has been exempted. However, the respondent chose to issue notice under Section 148 of the Act for the subject assessment year on the ground that inco....
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....47 of the Act. 5.It is further submitted that on receipt of the reasons for reopening the assessment, the petitioner submitted their objections dated 24.05.2016 through their authorized representative. The respondent by reply dated 30.08.2016 terming it as rebuttal for the objection did not agree with the submissions made by the petitioner and in case the petitioner wants to provide further submissions in support of his claim, the petitioner was directed to provide the same by 08.09.2016. The petitioner's authorized representative addressed the respondent by letter dated 07.09.2016 requesting for extension of time without prejudice to their challenge of the jurisdiction of the respondent to invoke Section 147 of the Act. Subsequently, a detailed submission was made on 29.09.2016 through the authorized representative explaining in detail the process involved in curing the coffee and referring to various texts in the Coffee Act. Subsequently, a notice under Section 143(2) of the Act was issued dated 28.12.2016 mentioning the assessment year as 2012-2013 for which a corrigendum was issued on 28.12.2016 correcting the assessment year as 2009-2010. The petitioner made a represent....
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....ons for reopening, it is clear that it is a change of opinion and nothing else. Further, it is submitted that in the absence of any tangible material to come to the conclusion that income chargeable to tax has escaped assessment, the reassessment has to be held to be illegal. It is further submitted that the petitioner has been singled out and a discriminatory treatment has been adopted in respect of the assessment year 2009-2010. Several hundreds of coffee growers are not engaged in curing coffee seeds like the petitioner and they filed returns of income and claimed that the entire income from sale of such coffee seeds was exempted under Section 10(1) of the Act and the petitioner learns that there is no other case where reopening of assessment has been done in respect of the assessment year 2009-2010 and the respondent may be called upon to disclose as to whether they have issued notices to any other similarly placed person for reopening the assessment for the relevant year. 8.Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Calcutta Discount Company Limited vs. Income Tax Officer, Companies District I Calcutta and another reported in AIR 196....
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....ith the impugned notice/assessment order. 10.Heard the learned counsels for the parties and carefully perused the materials placed on record. 11.Broadly three issues fall for consideration in this writ petition, namely, 1)Whether the impugned notice issued under Section 148 of the Act is on account of change of opinion of the Assessing Officer when the petitioner's case is that he has fully and truly disclosed all the details at the time of scrutiny assessment and whether any tangible material was available with the Assessing Officer to come to a conclusion that income chargeable to tax has escaped assessment during the relevant year? 2)Whether the respondent had complied with the mandate laid down by the Hon'ble Supreme Court in the case of GKN Drive Shafts (India) Limited vs. Income Tax Officer - 2002 Supp (4) SCR 359? 3)Whether the impugned reopening proceedings and the consequential assessment order amounts to discrimination by singling out the petitioner and taking up the case for reopening the assessment for the relevant year when there are several hundreds of similar coffee growers whose claim for exemption has not been questions or r....
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....essment. The reasons must have a live link with the formation of the belief. 14.In the case of Calcutta Discount Company Limited, the Hon'ble Supreme Court examined the words used in the provision "omission or failure to disclose fully and truly all material facts necessary for assessment for that year" and held as follows: "10.Does the duty however extend beyond the full and truthful disclosure of all primary facts ? In our opinion, the answer to this question must be in the negative. Once all the primary facts are before the assessing authority, he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else - far less the assessee - to tell the assessing authority what inferences whether of facts or - law should be drawn. Indeed, when it is remembered that people often differ as regards what inferences should be drawn from given facts, it will be meaningless to demand that the assessee must disclose what inferences - whether of facts or law he would draw from the primary facts. 11.If from primary facts more i....
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....3.04.2016. The respondent by communication dated 19.04.2016 furnished the reasons for reopening. On a perusal of the reasons, I find that the respondent on verification of the assessment records and the order sheet entries inferred that the Assessing Officer on scrutiny had failed to examine and deliberate on the correctness of the income reported under the head agricultural income. Further, the respondent would state that even though the assessee had derived the predominant portion of the agricultural income from sale of coffee seeds, the aspect as to whether the income so derived is completely exempt or is it a case falling under Rule 7B was also omitted to be verified. Added to this, the Assessing Officer was inspired by a direction issued by the ITAT in the case of one TC Abraham. Thus, on a mere reading on the reasons for reopening clearly show that there is no allegation against the petitioner that there has been omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment for that year. The so called reason to believe that income chargeable to tax has escaped assessment is on the ground that the Assessing Officer at ....
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....the objections outright but afforded further opportunity to the petitioner to make further submissions and fixed the outer time limit as 08.09.2016 to make further submissions. This rebuttal dated 30.08.2016 cannot be treated to be an order as required to be passed in terms of the directives in the case of GKN Drive Shafts (India) Limited as the respondent himself did not attach any finality to it. The petitioner sought for extension of time to make further submissions and accordingly the same was made on 29.09.2016. This submission appears to be an elaborate submissions bringing out the distinction between pulping and drying of coffee and curing of coffee. Further it was pointed out that the Assessing Officer erred in referring to the decision of ITAT in the case of TC Abraham as one of the reasons for reopening when the said order was modified by the Tribunal and the matter has been remitted for reconsideration by the concerned Assessing Officer. Though the respondent gave an opportunity to the assessee to make further submission which the petitioner had availed and submitted the same on 29.09.2016, without reference to the said submission, notice dated 28.12.2016 was issued unde....