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TMI Blog2015 (2) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... a mere change of opinion is wholly impermissible in law. We are therefore of the clear opinion that the Assessing Officer has acted without application of mind and wholly without jurisdiction in issuing the impugned notice to reopen the assessment of the petitioner. - Decided in fvaour of assessee. - WRIT PETITION NO.2331 OF 2007 - - - Dated:- 5-1-2015 - M.S.SANKLECHA G.S.KULKARNI, JJ. For the Appellant : Mr.P.J.Pardiwalla, Sr.Advocate a/w Mr.Nilesh Joshi i/b Mr.Atul K.Jasani For the Respondent : Mr.Suresh Kumar Oral Judgment:- (Per G.S.Kulkarni, J.) 1. The petitioner has sought to question the legality of a notice dated 15.3.2007 issued by the Assessing Officer under section 148 of the Income Tax Act, 1961 (for short 'the Act') seeking to re-open assessment for A.Y.2000-01. There is also a challenge to the order of the Assessing Officer disposing of the objections raised by the petitioner to the re-opening of the assessment. As the reopening pertains to the A.Y.2000-01 the impugned notice is admittedly issued beyond a period of four years from the end of the relevant Assessment year. 2. For the Assessment Year 2000-01 the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices include handling of various cargo such as coal, cement, clinker, salt extraction etc. from ships to shore/shore to ships and clients destination to the mother vessel/mother vessel to the client destination. The company also owns barges, onshore, equipments and dumpers for its business. The appellant either taps its own sources or appoints or looks for agents who can get business for it. The agents appointed by the appellant assist the appellant to achieve large revenue by increasing its turnover. From the elaborate details furnished by the assessee before CIT(A)(C)-IV, it is seen that assessee's main business is not operation of ships as claimed in the return of income but only ancillary services. The deductions u/s.33AC is allowed to an assessee whose main business is operation of ships. The deduction u/s.33AC has been wrongly allowed to the assessee on the basis wrong facts submitted alongwith the return of income. I have, therefore, reason to believe that income chargeable to tax for AY 2000-01 has escaped assessment to the extent of ₹ 182,28,705/- by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary services. I, therefore, reject your submission for allowing of deduction u/s.33AC of the Income Tax Act,1961 and that reopening is valid. 7. Learned counsel appearing on behalf of the petitioner has made the following submissions in support of the petitioner's case: (i) There was complete disclosure on the part of the assessee all material facts truly and fully during the course of assessment. (ii) The fact that the petitioner is engaged in the business of 'Operation of Ships' was appropriately disclosed and on this basis the petitioner was claiming deduction under section 33AC of the Act and hence there was full and complete disclosure of the activity of the petitioner. (iii) The petitioner being engaged in shipping operation was accepted in totality by the revenue. (iv) It can be seen from the reasons as furnished by the as Assessing Officer it cannot be said that the Assessing Officer had any reason to believe that the income had escaped assessment nor it could be said that the petitioner had failed to disclose fully and truly any material which would warrant reopening of the assessment as per the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. (II) Reply of the petitioner to the notice dated 4-1-2002 by its letter dated 12.2.2002 inter alia recording the nature of business as under:- 1. Brief Note regarding the Nature of Business: (a) the company owns Barges, Onshore Equipments and dumpers. The Company provides the lighterage services to the ships of national and international lines calling on ports like Bedi, Sikka, Navlakhi, Okha, Magdalla, Dahanu, Dahej etc. These services includes handling of various cargo such as coal, cement, clinker, salt extraction etc. from ships to shore/ shore to ships and/or from clients' destination to the Mother vessels, Mother vessels to the client's destination. (III) Letter of the petitioner dated 17.1.2003 being petitioner's reply to the notice under Section 143(2) of the Act, in which the petitioner recorded that the petitioner had a fleet of barges and tugs operating at the minor ports on the Western port of India such as Bedi, Sikka, Navlakhi, Okha, Magdalla and Dahanu. (IV) Assessment order dated 27.1.2003 passed under Section 143(3) of the Act in which the Assessing Officer has recorded that the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as under :- The appellant is engaged in providing lighterage services to the ships of national and international lines calling on Ports like Bedim, Sikka, Navlakhi, Okha, Magdalla, Dahanu, Dharamtar etc. These services include handling of various cargo such as coal, cement, clinker, salt, extraction etc. from ships to shore/shore to ships and client's destination to the mother vessel/mother vessel to the client destination. The company also owns barges, onshore equipments and dumpers for its business. The appellant either taps its own sources or appoints or looks for agents who can get business for it. The agents appointed by the appellant assist the appellant to achieve large revenue by increasing its turnover.......... A plain reading of section 33AC makes it abundantly clear that deduction u/s 33AC is available to an assessee which is a government company or a public company formed and registered in India with a main object of carrying on the business of operation of ship..... As can be seen from the appellant's submissions, the appellant is not engaged in the business of operating ships but only providing ancillary services. It is kindly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income had escaped assessment. 14. We have given our anxious consideration to the material as placed on record and the submissions as made on behalf of the learned counsel for the parties. It is an obligation on the assesse to disclose fully and truly all material particulars necessary for assessment in support of the return of income. In the case of the petitioner the Assessing officer had passed an order dated 27-01- 2003 under Section 143(3) of the Act by which the total income was determined at ₹ 2,56,02,060/- after making certain dis-allowances. One of the partial disallowances was a deduction under section 33AC of the Act which was claimed by the petitioner on the ground that the petitioner is engaged in the business of 'Operation of Ships.' On this count the petitioner had interalia claimed a deduction of ₹ 2,15,94,598/- however the Assessing officer allowed allowed the same to an extent of ₹ 1,82,28,205/-. It is an admitted position that the notice in question issued under section 148 of the Act is issued by the Assessing Officer after expiry of a period of four years from the end of the relevant assessment year. When an assessment is sought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed by the petitioner in regard to the nature of its business in shipping. What we find is that this disclosure is in fact identical to the disclosure as made by the petitioner in response in its letter dated 12.2.2012 to the notice of the Assessing Officer under section 142(1) of the Act which raised various queries in the course of assessment proceedings for the assessment year in question. In our opinion the assessing officers attempt to reopen the petitioner s assessment on the petitioner's own disclosure can in no manner be termed as an appropriate exercise of his jurisdiction and authority under Section 147 so to reopen the assessment beyond the period of four years as this can in no manner be said to be any failure on the part of the petitioner to disclose fully and truly all the facts necessary for assessment. 17. Thus the issue which goes to the root of the matter is the jurisdictional requirement the assessing officer was required to be satisfy before issuing the notice in question under section 148 to reopen an assessment after expiry of four years from the end of the relevant assessment year. The jurisdictional requirement would be whether the petitioner had fai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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