TaxTMI 
TaxTMI 
2021 (3) TMI 487
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....ear A.Y. 2014-15 declaring its income at Rs. 58,08,013/- and the same was processed under Section 143(1) of the Act. 2.3 The case of the assessee company for the year under consideration was selected for scrutiny assessment and various details were called for by issuing the notice dated 08.06.2016 under Section 142(1) of the Act and the same was complied with by the assessee. The respondent vide Notice dated 09.12.2016 issued under Section 142(1) of the Act called upon the assessee company to show cause as to why the amount of VAT payable Rs. 78,79,941/- for the year 2013-14 should not be disallowed under Section 43 B of the Act, since it being a statutory liability had not paid before the due date of filing of the return. The assessee company vide letter dated 16.12.2016 had furnished its explanation. Despite of this, the revenue after considering various details furnished by the assessee company framed the assessment under Section 143(3) of the Act vide order dated 22.12.2016, whereby, the total income was determined at Rs. 95,03,166/- and made certain additions to the return of income including the addition of Rs. 10,41,320/- in respect of the VAT refund. The assessee company....
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....ntaining the submissions made by the assessee in response to various notices issued during the assessment proceedings and have noted that the assessee has not fully and truly disclosed the material facts necessary for its assessment for the year under consideration. 4. Enquiries made by the AO as sequel to information collected/received: The copy of balance-sheet, profit and loss a/c and submission received the assessee has filed its return of income on 22.12.2016 are available in assessment records. The information received is processed and examined from the assessment records and material available on record with the department. 5. Finding of the AO : On verification of the bank statement it is seen that the assessee company has received VAT refund of Rs. 79,78,941/- during the year. The assessee has already availed the deduction in the form of purchase which includes VAT expenses. As such the entire amount of Rs. 79,78,941/- liable for tax when it has escaped from the assessed income. 6. Basis of forming reason to believe and details of escapement of income:- The assessee had received a sum of Rs. 79,78,941/- as VAT refund, a....
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....missible. 6. We have heard Mr. Tushar Hemani, the learned Senior Counsel assisted by Ms. Vaibhavi K. Parikh, the learned counsel appearing for the writ applicant and Mrs. Mauna M. Bhatt, the learned Senior Standing Counsel assisted by Mr. Karan Sangani, the learned counsel appearing for the Revenue. 7. Learned counsel appearing for the writ applicant has submitted the following contentions:- (i) It was submitted that, the impugned notice is illegal, bad in law, barred by limitation and without jurisdiction and therefore, the same deserves to be quashed and set aside; (ii) It was pointed out that, mere a change of opinion is not sufficient to reopen any completed assessment. He further submitted that, the assessing officer cannot take any action under Section 147 of the Act merely because of the fact that, the assessing officer has change of opinion on the same set of facts. In this regard, it was submitted that, the case of the assessee company was selected for scrutiny and the issue of the VAT amount was examined at the stage of original assessment by the then assessing officer and the differential amount of Rs. 10,41,320/- (Rs. 79,78,941/- minus Rs. 69,37,....
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....ted the explanation submitted by the Revenue and had made addition of Rs. 10,41,320/- (addition for VAT refund received Rs. 79,78,941/- minus Rs. 69,37,061/-) towards the VAT refund receivable adjusted erroneously in the assessment order. 13. It is a settled principle of law that, a mere fresh application of mind to the same set of facts or mere a change of opinion does not confer jurisdiction upon the Assessing Officer to issue notice under Section 148 of the Act. 14. In the case of CIT Vs. Kelvinator of India Ltd., the expression "change of opinion" has been interpreted and held that, the reopening of the assessment on the basis of "mere a change of opinion" cannot be per say reason to open. The relevant paras 5, 6 & 7 reads thus: "5......where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re- open the assessment. Therefore, post-1st April, 1989, power to re-open is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basi....
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....for the year under consideration. We are of the opinion that, the impugned action on the part of the respondent to issue Notice under Section 148 of the Act is without authority of law and therefore, the same is required to be quashed and set aside for the following reasons:- (i) The issue of VAT amount thoroughly examined at the stage of the original assessment by the then assessing officer and had considered various details and consciously, he arrived at a conclusion not to make an addition in respect of the entire amount of Rs. 79,78,941/- and add only differential amount of Rs. 10,41,320/- and the same was deleted by the Income Tax Appellate Tribunal vide order dated 21.10.2019. A perusal of the reasons recorded, it reveals that, the assessment is sought to be reopened mainly on the ground that, "the assessee was failed to disclose the VAT refund of Rs. 79,78,941/- in his return of income which has resulted into under assessment of income". Considering the scrutiny assessment order, it appears that, the assessee had disclosed fully and truly all primary material facts with regard to VAT amount and accordingly, the then assessing officer had framed the assessment. In th....