TaxTMI 
TaxTMI 
2026 (6) TMI 833
X X X X Extracts X X X X
X X X X Extracts X X X X
....rder dated 28/06/2025 issued under Section 148A (3) of the Act. 4. The brief facts of the case are that, the petitioner is engaged in providing the services to the cluster of industries in Pandesara, Surat in the field of waste effluent management. The petitioner filed its return of income under Section 139 of the Act for the Assessment Year (for short A.Y.) 2020-21 on 31/10/2020 declaring total income of Rs. Nil after claiming deduction under Section 80IA(4)(I) of the Act amounting to Rs. 20,51,02,091/-. In that return of income, the petitioner has offered book profit of Rs. 23,50,77,870/- for taxation under section 115JB of the Act. Subsequently, the case of the petitioner was selected for scrutiny through Computer Aided Scrutiny Selection (CASS) for complete scrutiny and the Assessment Order under Section 143(3) read with Section 144B of the Act was passed on 30/08/2022 after accepting the returned income. 4.1. Thereafter, the case of the petitioner for the year under consideration was reopened by issuance of the show cause notice dated 12/02/2025 under section 148A(1) of the Act suggesting that income chargeable to tax has escaped assessment within the meaning of Section ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to a mere change of opinion, which is impermissible in law. d. The provision of Section 152(2) of the Act entitles the petitioner to seek that the reassessment proceedings be dropped upon demonstrating that it had been assessed on an amount not lower than what it would have been rightly liable for even if the income alleged to have escaped had been taken into account. The petitioner has already offered a higher income to tax by claiming depreciation at 10% on building and 15% on plant and machinery instead of 40% as prescribed. Had the higher rate of depreciation been adopted by the petitioner, the business profits would have been lower, and accordingly, the deduction under Section 80IA(4)(i) of the Act, which is at 100% of eligible profits, would have reduced proportionately. As a result, the final total income would still have remained at Nil, and the tax liability under Section 115JB on book profit of Rs.23,50,77,870/- would remain unchanged. Even assuming the allegation of escaped income (i.e. lower depreciation claim) is accepted, the petitioner would not have been liable to any additional tax, and in fact, the amount assessed originally is not lower than the amount ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l assessment does not ipso facto establish that the Assessing Officer had formed any conscious opinion on the correct rate of depreciation applicable to the assets in question. It is contended that in the present case, the assessment order passed under Section 143(3) read with Section 144B of the Act does not reflect any deliberation, discussion, or finding with regard to the correctness of depreciation claimed at 40%. 6.2. It is also contended that the liability under Section 115JB of the Act is only a mode of tax computation for a particular assessment year and does not validate or condone incorrect claims made under the normal provisions of the Act, and the petitioner's assumption that recomputation of depreciation would not affect tax liability is speculative and premature and the same is not correct. 7. We have heard the learned counsel appearing for the respective parties at length. 8. The petitioner filed its return under Section 139 of the Act for A.Y. 2020-21 on 31/10/2020 declaring its total income of Rs. Nil after claiming deduction under Section 80IA(4)(I) of the Act. The case of the petitioner was selected for scrutiny through CASS under Section 143 (3) of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....same is duly certified by the Auditor. 11. In the present case, it is not disputed that the petitioner has already offered a higher income to tax by claiming depreciation at 10% on building and 15% on plant and machinery instead of 40% as prescribed. The petitioner had specifically contended that it had inadvertently claimed the depreciation at lower rates, and Assessing Officer precisely completed the assessment proceedings without altering the claim of depreciation since there would be no escapement of income as it would not have any impact on the total income as the profit and gains from business derived by the petitioner was eligible for 100% deduction under section 80IA(4)(i) of the Act. It is not controverted that even if the depreciation is allowed at enhanced rate of 40% in place of 10% in the case of building and 15% in the case of plant and machinery claimed in original return by the petitioner, the income chargeable to tax under the head 'Profits and Gains from Business and Profession' would get reduced and therefore there would be no escapement of income chargeable to tax, but the objection is on the claim of depreciation on WDV method. Thus, claiming depreci....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reopening the assessment by alleging that the income has escaped assessment on the same material by alleging that while accepting the original return the Assessing Officer has not considered the claim of deprecation appropriately. 13. We may now refer to the decision of the Coordinate Bench of this Court in case of Moto Tiles (P.) Ltd. (supra), wherein, on a similar issue, while examining the provision of Section 115 JB of the Act, the Court observed as thus: "6.1 Insofar as the second contention raised on behalf of the petitioner that even if the total amount as proposed to be added by the Assessing Officer is sustained, there would be no increase in the tax liability of the petitioner, the learned counsel submitted that this is a case where no scrutiny assessment has been made under section 143(3) of the Act and that the petitioner had declared income of Rs.35.96 lacs under section115JB of the Act. It was submitted that in the present case, the tax levied under section 115JB of the Act is on the book profit. Even if any addition is made to the total income shown in the return of income filed, the same results into reduction of loss to be carried forward to subsequent ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed out that in terms of the reasons recorded, the income chargeable to tax to the extent of Rs.81,18,000/- has escaped assessment. In the return of income filed by the petitioner, the petitioner has disclosed loss of Rs.77,51,810/- and the petitioner has been assessed at an income of Rs. 35,96,518/- on the book profit under section 115JB of the Act. It has, accordingly, been contended that even after making the proposed addition, there would be no difference in the taxable income of the petitioner and it will still be governed by the provisions of section 115JB of the Act. 10. The learned counsel for the petitioner has also drawn the attention of the court to the provisions of section 152(2) of the Act, which provides that where an assessment is reopened under section 147, the assessee may, if he has not impugned any part of the original assessment order for that year either under sections 246 to 248 or under section 264, claim that the proceedings under section 147 shall be dropped on his showing that he had been assessed on an amount or to a sum not lower than what he would be rightly liable for even if the income alleged to have escaped assessment had been taken into ac....