2024 (8) TMI 1083 - HC - Income Tax

Reopening of assessment u/s 147 - claim of the petitioner for depreciation on tippers at the higher rate of 30% is not allowable as the petitioner is engaged in the business of mining and excavation of contractors and not in the business of running the tippers/ motor lorries on hire - HELD THAT - It is not in dispute that the issue with regard to the claiming of depreciation at the rate of 30% on tippers is already decided by this Court vide Judgment and Order in Pr. Commissioner of Income Tax, Rajkot-1 Versus Durga Construction Company 2018 (5) TMI 1172 - GUJARAT HIGH COURT rendered in the Tax Appeal referred to herein above. The said decision is binding upon the respondent AO and therefore, the information in possession of the respondent AO cannot be said to result in escapement of the income on the same facts of the petitioner. It is pertinent to note that the petitioner has already provided all the material information during the course of the regular assessment and after considering the same, the assessment order u/s 143 (3) of the Act was passed. Thus, when the issue which is sought to be kept alive is already decided by this Court, the respondent AO cannot be said to have assumed the jurisdiction to reopen the assessment on the same facts which have achieved finality for disallowing the excess claim of the depreciation. Petitioner has disclosed fully and truly all the material facts relevant for the assessment and there is no failure on the part of the petitioner for the same. The respondent AO has also failed to point out any tangible material other than what is available on the record and as such the entire exercise of reopening is nothing but a change of opinion on the part of the AO. Appeal of assessee allowed.

Summary

Issues:
Challenge to notice issued under Section 148 of the Income Tax Act for reopening assessment for the Assessment Year 2016-2017.

Analysis:
The petitioner, a partnership firm engaged in the business of hiring Earth Moving equipment and Commercial Vehicles, challenged a notice under Section 148 of the Income Tax Act for reopening the assessment for the year 2016-2017. The notice was based on the claim of higher depreciation on Tipper-Plant & Machinery not being admissible at 30% due to the nature of the petitioner's business. The petitioner contended that it was not engaged in mining but in hiring equipment, and the nature of its business had not changed since 2010-11. The Assessing Officer, however, held that the depreciation had escaped assessment due to excess allowance. The petitioner argued that the issue had already been decided in its favor by the Court previously, and all relevant information had been provided during regular assessment.

The respondent argued that the petitioner's claim for higher depreciation was not allowable as it was engaged in mining and excavation, not in running tippers or motor lorries on hire. The respondent sought to keep the issue alive for reconsideration during reassessment, citing previous cases where the Revenue did not accept the Court's decision and filed SLPs which were dismissed due to delays. However, the Court noted that the issue of depreciation had already been decided in favor of the petitioner in a previous judgment, which was binding on the Assessing Officer. The Court found that the Assessing Officer had no jurisdiction to reopen the assessment on the same facts that had achieved finality. The Court held that the petitioner had fully disclosed all relevant facts during the regular assessment, and there was no failure on its part. The Court concluded that the reopening was merely a change of opinion by the Assessing Officer, quashed the notice issued under Section 148, and allowed the petition.

In conclusion, the Court ruled in favor of the petitioner, quashing the notice for reopening the assessment for the year 2016-2017 under Section 148 of the Income Tax Act. The Court found that the issue of depreciation on tippers had already been decided in favor of the petitioner in a previous judgment, and all relevant information had been disclosed during the regular assessment, leading to the decision that the reopening was unjustified and amounted to a change of opinion by the Assessing Officer.