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TMI Blog2015 (8) TMI 469X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. As the same was allowed in the first year which was without any discussion at all and it was an intimation under Section 143(3) of the Act, in the subsequent years the Assessing Officers have mechanically allowed the exemption under Section 10AA of the Act claimed by the assessee. That does not mean that the exemption under Section 10AA of the Act allowed by the Assessing Officers in the first year, which was allowed without any further discussion and/or without applying any mind, cannot be reopened. The same can always be permitted to be reopened, however subject to the conditions being fulfilled under Section 147 of the Act. Under the circumstances, on the aforesaid ground, the notice under Section 148 of the Act cannot be quashed and set aside. However, as observed hereinabove, as such it is not open for the petitioner now to challenge the notice under Section 148 of the Act in the facts and circumstances of the case narrated hereinabove. - Decided against assessee. - Special Civil Application No. 2120 of 2015 - - - Dated:- 29-4-2015 - M. R. Shah And S. H. Vora, JJ. For the Appellant : Mr S N Soparkar, Sr. Adv. with Mr B S Soparkar, Adv. For the Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer noticed that the income chargeable to tax has escaped assessment on account of the failure on the part of the assessee to disclose full and true facts and therefore, the notice under section 148 of the Act dated 29.03.2014 was issued and served upon the assessee (notice dated 29.03.2014 is the subject matter of present Special Civil Application). That thereafter the petitioner participated in the reassessment proceedings and the Assessing Officer completed the assessment under section 143(3) of the Act read with section 147 of the Act and passed the reassessment order on 25.05.2014 dropping the proceedings which were initiated. That thereafter the Revisional Authority Principal Commissioner of Income Tax, Ahmedabad5 had issued the show-cause notice dated 26.11.2014 under section 263 of the Act having opined and satisfied that the reassessment order dated 25.05.2014 dropping the reassessment proceeding is erroneous and prejudicial to the interest of the Revenue. That after having been served with the show-cause notice under section 263 of the Act dated 26.11.2014 by which the petitioner has been called upon to show cause why the order dated 25.06.2014 droppin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions, he has heavily relied upon the following decisions of the Hon ble Supreme as well as different High Courts. 1. Radhasoami Satsang v. CIT [1992] 193 ITR 321 2. Taraben Ramanbhai Patel v. ITO [1995] 215 ITR 323 (Guj.) 3. CIT v. N.P. Mathew (Decd.) [2006] 280 ITR 44 (Kerala) 4. Director of Income Tax (Exemptions) v. Escorts Cardiac Diseases Hospital Society [2008] 300 ITR 75 [3.2] Shri Soparkar, learned Counsel appearing on behalf of the petitioner has relied upon the following decisions in support of his submission that as the initiation of reassessment proceedings is absolutely on the audit objection and/or on change of opinion without there being any tangible material and therefore, the same is impermissible and/or invalid. 1. Calcutta Discount Co. Ltd. v. IncomeTax Officer [1961] 41 ITR 191 (Guj.) 2. Jagan Nath Singhal v. Deputy Commissioner of IncomeTax Anr. [2000] 242 ITR 554 (P H) 3. Commissioner of Income Tax v. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC) 4. Parixit Industries Ltd. v. Assistant Commissioner of IncomeTax [2013] 352 ITR 349 (Guj.) 5. Synbiotics Ltd. v. Assistant Commissioner of IncomeTax [2015] 370 ITR 119 (Guj.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs is nothing but an afterthought and having realized and found and/or apprehending that in the proceedings now under section 263 of the Act, the reassessment order cannot be sustained. [4.3] It is further submitted by Mrs. Bhatt, learned Counsel appearing on behalf of the Revenue that even the exemption under Section 10AA of the Act was granted to the petitioner in the first year i.e. AY 2007-08 (year under consideration) without any scrutiny and the intimation under section 143(1) of the Act was given and in the subsequent years the same has been mechanically followed. It is submitted that therefore when the original assessment for AY 2007-08 was reopened, as such the AO was required to consider the issue/grant of exemption under Section 10AA of the Act in detail, however and instead the Assessing Officer in the reassessment proceedings also dropped the reassessment proceedings without considering the issue in detail. It is submitted that therefore when as such the reassessment order is in favour of the petitioner and which is now taken under revision by the Commissioner in exercise of powers under Section 263 of the Act, it is requested not to entertain the present petition c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 148 of the Act dated 29.03.2014, obviously because the reassessment proceedings were dropped. That thereafter the Commissioner has issued the show-cause notice under Section 263 of the Act on 26.11.2014 and has taken the order of reassessment dated 25.06.2014 under suo moto revision. It appears that having realized and/or apprehending that the one line order of reassessment dated 25.06.2014 cannot be sustained and/or has no legs to stand, as an afterthought now the petitioner has challenged the notice under Section 148 of the Act. At this stage it is required to be noted that initially the petitioner challenged the notice under Section 148 of the Act dated 29.03.2014 as well as the show-cause notice under Section 263 of the Act dated 26.11.2014, however for the reasons best known, the petitioner has restricted the present petition with respect to challenge to the notice under Section 148 of the Act dated 29.03.2014 only. [5.2] Considering the aforesaid facts and circumstances of the case and in the facts and circumstances of the case narrated hereinabove, the petitioner now cannot be permitted to challenge the notice under Section 148 of the Act and initiation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f his submission challenging the notice under Section 148 of the Act are required to be considered and/or none of them shall be applicable to the facts of the case on hand. As observed hereinabove, once having participated in the reassessment proceedings without challenging the notice under Section 148 of the Act and thereafter reassessment proceedings are dropped and thereafter a show-cause notice has been issued by the Commissioner taking the reassessment order [which is a one line order] under revision, in such facts and circumstances of the case, it is not open for the petitioner now to challenge the notice under Section 148 of the Act. As observed hereinabove, it is nothing but a malafide and an afterthought. Therefore, in the facts and circumstances of the case, petitioner now cannot be permitted to challenge the notice under Section 148 of the Act. [5.4] Now, so far as the submission of Shri Soparkar, learned Counsel appearing on behalf of the petitioner that in subsequent years the benefit/exemption under Section 10AA of the Act has been allowed by the Assessing Officer and therefore, on the principle of Rule of Consistency, it is not permissible to open the issue with r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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