2018 (2) TMI 441

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....t of the learned advocates for the respective parties, the matter was taken up for final hearing. 3. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the validity of the notice dated 25.3.2017 issued by the respondent under section 148 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). 4. The petitioner is a partnership firm carrying on the business of manufacturing machinery parts, articles and job work as per drawing and specifications supplied to it. The petitioner filed its return of income for assessment year 2011-12 on 30.4.2012 declaring total income of Rs. 3,29,63,510/-. The Assessing Officer called for and examined the necessary evidence and completed regular assessme....

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....for its assessment. It was submitted that, therefore, the first proviso to section 147 of the Act would be squarely applicable to the facts of the present case and in the absence of any failure on the part of the petitioner to fully and truly disclose all relevant facts, the reopening of assessment beyond a period of four years from the end of the assessment year is without jurisdiction. 5.1 Next, it was submitted that the reopening is based upon a mere change of opinion and hence, also the assumption of jurisdiction on the part of the Assessing Officer lacks validity. The attention of the court was invited to the notice dated 7.1.2014 issued by the Assessing Officer under section 142(1) of the Act, to point out that the Assessing Officer ....

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.... expenses of Rs. 25,54,960/- was debited to profit and loss account by the assessee under the head 'other expenses'. The said expenses were paid to various parties. Out of this expenses, payment of Rs. 5,69,208/- were made to 8 persons in cash which exceeded Rs. 20,000/- per day. As per section 40(3) of the Act, the said payment was required to be disallowed. Hence allowance of these expenses resulted into underassessment of income of Rs. 5,69,208/- with short levy of tax of Rs. 1,88,196/- + Rs. 63,318/- interest. I have therefore reason to believe that the above income of Rs. 5,69,208/-, chargeable to tax has escaped from assessment and this is a fit case for issue of notice u/s.148." 8. It is an admitted position that in t....