TaxTMI 
TaxTMI 
2022 (7) TMI 1601
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....th. Learned advocate Mr. Karan Sanghani waives service of notice of rule for the respondents. 4. The petitioner has preferred this petition under Article 226 of the Constitution of India challenging the impugned notice dated 19.02.2018 issued under section 148 of the Income Tax Act, 1961 (For short "the Act") proposing to reopen the assessment for the Assessment Year 2011-2012. After filing of the petition, the respondent has passed the final assessment order dated 20.11.2018 under section 144 read with section 147 of the Act and therefore, the petitioner has also challenged the same. 5. Brief facts of the case are that the petitioner is a company incorporated under the Companies Act, 1956 and is engaged in the business of manufacturing woven labels and generation of power. 5.1) The petitioner filed return of income for the Assessment Year 2011-2012 on 24.09.2011 declaring total income at Rs. 85,99,759/-. The return of income was later on revised on 26.09.2011 declaring total income at Rs. 85,99,759/- after claiming depreciation of Rs. 3,69,42,979/-. 5.2) The case of the petitioner was selected for scrutiny assessment. Various details were called for by the Assessing Of....
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....f the Act. It is the case of the petitioner that the petitioner also filed a chart showing complete justification along with compliance of conditions stipulated under section 32(1)(a) of the Act . 5.8) It is the case of the petitioner that the Assessing Officer, after perusing all the above details and information furnished by us, consciously chose not to make any addition in respect of the additional depreciation claimed by the petitioner under section 32(1)(a) of the Act while framing assessment under section 143(3) of the Act vide order dated 11.10.2013. 5.9) However, thereafter, the respondent issued the impugned notice dated 19.02.2018 under section 148 of the Act seeking to reopen the case of the petitioner for the year under consideration. 5.10) The petitioner filed return of income on 23.05.2018 in response to the notice issued under section 148 of the Act. 5.11) The respondent supplied the copy of reasons recorded for reopening the case of the petitioner on 10.07.2018. The reasons recorded by the Assessing Officer for reopening the assessment read as under : "The assessee company is engaged in the business of manufacturing of narrow woven labels & gene....
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....ot provide complete details w.r.to depreciation claim & specifics of the same. Documentary evidences were not provided at all in this regard. In view of the above facts, I have reason to believe that income chargeable to tax has escaped assessment within the meaning of section 147 of the ac, for this assessment year by reason of the failure on part of the assessee to disclose fully & truly all material facts necessary for this assessment. As per the provisions of section 149(1) (b), the income chargeable to tax, which has escaped assessment for the AY 2011-12 is more than Rs 1 lakh." 5.12) The petitioner, vide letter dated 10.10.2018, raised objections against reopening of the assessment. 5.13) The respondent, vide order dated 15.10.2018 disposed off the objections raised by the petitioner. 5.14) The Petitioner, after receiving the order disposing off the objections against reopening, filed the present writ petition which came up for hearing before this Court on 27.11.2018 and this Court issued notice to the respondent making it returnable on 07.01.2019. This Court, further directed that the respondent may proceed further pursuant to the impugned notice but shall not pass ....
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....e Act. It was therefore, submitted that there is no failure on part of the petitioner to disclose fully and truly all material facts necessary for assessment. 6.1) It was submitted that the respondent has acted illegally and without jurisdiction in issuing notice under section 148 of the Act inasmuch as notice can be issued under section 148 of the Act if and only if an Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment. It was submitted that it is well settled that the words "reason to believe" suggest that firstly, the belief must be that of the Assessing Officer secondly, it must be that of an honest and reasonable person based upon reasonable ground, not a mere change of opinion, suspicion, gossip or rumour and thirdly, there must be live link or close nexus between the material before Assessing Officer and the belief he has formed regarding escapement of income. Such belief must lead to a conclusion that income has escaped assessment. It was submitted that the petitioner's case was selected for scrutiny and the issues on hand were already scrutinized by the then Assessing Officer which is evident from notice dated 26.06.2013....
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....of the Act, merely because he happens to change his opinion or to hold an opinion different from that of his predecessor on the same set of facts. In the petitioner's case, there is nothing to indicate that the respondent, in consequence of any information in his possession which came subsequent to framing of the original assessment, had reason to believe that income had escaped assessment. It was submitted that during the course of original assessment proceedings, the petitioner had submitted various details in respect of the issue on hand and having considered such details, the then Assessing Officer consciously built an opinion, did not call for any further information and clarifications, accepted the issue as it is and did not raise any objection at the time of original assessment proceedings. It was submitted that having formed an opinion, it is not open to now, change that opinion and take a different stand based on the very same set of facts and information. 6.5) It was submitted that despite the fact that the petitioner had already approached this Court for seeking appropriate relief by challenging the impugned notice under section 148 of the Act, which was granted b....
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....t of the revenue. It was further submitted that section 147 itself covers the instances where the remedy under this section can be resorted to and calling for details relating to investment will not amount to forming of opinion by the Assessing Officer. It was submitted that in a case, where no opinion has been formed, there cannot be any change of opinion. 7.3) It was submitted that in the present case satisfaction was drawn with independent application of mind on the basis of material facts available on record and thereafter only the Assessing Officer has formed his reasons to believe and recorded the same and proceeded to reopen the case. 7.4) In support of his submission that audit objection on the point of fact can be a valid ground for reopening of assessment, reliance was placed on the decision of the Hon'ble Apex Court in case of CIT v. P. V. S Beedies P. Ltd. reported in [1999] 237 ITR 13 (SC) and on decision of this Court in case of M/s N.K. Industries Ltd. Vs. Income-tax Officer (OSD), reported in [2014] 49 taxmann.com 216 (Gujarat). It was submitted that in the present case, reopening has been done after independent application of mind on the basis of facts av....
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.... is for the Financial Year 2010-2011, i.e. for Assessment Year 2011- 2012. Such issue is already considered in regular assessment by the Assessing Officer after scrutiny of the books of accounts as well as explanation tendered by the assessee in respect of additional depreciation claimed under section 32(1)(iia) of the Act. The assessee in reply to point no.13 in the notice issued under section 142(1) of the Act has given explanation along with statement for additional depreciation under section 32(1)(iia) of the Act. Thus there is no failure on part of the petitioner assessee to disclose truly and fully all material facts during the course of regular assessment, failure of which would enable the Assessing Officer to assume the jurisdiction to issue notice under section 148 of the Act beyond a period of four years from the completion of assessment year as per the proviso to section 147 of the Act. 10. With regard to the contention of the assessee that the assessment order allegedly passed on 20.11.2018 was sent to the assessee after order of this Court dated 27.11.2018 was served upon respondent Assessing Officer is concerned, it is required to be noted that when the impugned no....