9911796707
TMI Blog2015 (8) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... -10 has been vitiated. Therefore, in the facts and circumstances of the case, the formation of the opinion by the Assessing Officer while reopening the assessment proceedings and his reason to believe that the income has escaped the assessment has been vitiated and therefore, the reopening of assessment proceeding for AY 2009-10 is not valid and permissible. - Decided in favour of assessee. - Special Civil Application No. 1651 of 2015 - - - Dated:- 30-4-2015 - M. R. Shah And S. H. Vora, JJ. For the Appellant : Mr Hardik V Vora, Adv. For the Respondent : Mr Pranav G Desai, Adv. JUDGMENT ( Per : Honourable Mr. Justice M. R. Shah ) [1.0] By way of this petition under Article 226 of the Constitution of India, the petitioner - assessee has prayed for an appropriate writ, direction and order to quash and set aside the impugned notice dated 07.03.2014 under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as Act ) for AY 2009-10 by which in exercise of powers under Section 147 of the Act the Assessing Officer has reopened the assessment for AY 2009-10. [2.0] That the petitioner - assessee was engaged in the business of contract work hiring a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the impugned reassessment proceedings and/or the notice issued under Section 148 of the Act to reopen the assessment for AY 2009-10. [3.0] Shri Hardik Vora, learned Advocate appearing on behalf of the petitioner has vehemently submitted that the reopening of the assessment for AY 2009-10 is solely on the basis of the audit objection and/or the audit objection by the audit party and therefore, the same is not permissible. It is submitted that therefore, forming opinion by the Assessing Officer that the income has escaped assessment has been vitiated. [3.1] It is vehemently submitted by Shri Vora, learned Advocate appearing on behalf of the petitioner that though in the objections raised by the petitioner against reopening of the assessment, it was specifically stated that reopening of the assessment is at the instance of the audit party and/or on the audit objections raised by the audit party only, the Assessing Officer while disposing off the objections has not dealt with the same at all. [3.2] It is further submitted that even in the present Special Civil Application though the petitioner has raised the specific ground on the aforesaid, in the affidavit in reply, the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t proceedings and relying upon the reasons recorded by the Assessing Officer while issuing the notice under Section 148 of the Act, Shri Desai, learned Advocate appearing on behalf of the petitioner has vehemently submitted that the Assessing Officer had formed an independent opinion that the income of ₹ 1,66,42,284/- had escaped assessment. It is submitted that therefore this is not a case where the assessment is reopened solely at the instance of the audit party and/or audit objection raised by the audit party. It is submitted that therefore the decisions upon which the reliance has been placed by the learned advocate appearing on behalf of the petitioner shall not be applicable to the facts of the case on hand and/or shall not be of any assistance to the petitioner. [4.3] Relying upon the decision of the Hon ble Supreme Court in the case of Commissioner of Income Tax v. P.V.S. Beedies Pvt. Ltd. reported in 237 ITR 13 (SC) and decision of the Division Bench of this Court in the case of N.K. Industries Ltd. v. Income Tax Officer (OSD) reported in 362 ITR 502 (Guj), it is vehemently submitted by Shri Desai, learned Advocate appearing on behalf of the Revenue that as observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ening of the assessment/reassessment proceedings has been challenged mainly on the ground that the reopening of the assessment is solely on the basis of the objection raised by the audit party and/or audit objection and the formation of the opinion by the Assessing Officer that the income of ₹ 1,66,42,284/- has escaped assessment has been vitiated inasmuch as there is no independent formation of opinion by the Assessing Officer on the escapement of the income from assessment. [5.2] It is required to be noted that though in the objections raised by the petitioner against reopening of the assessment proceedings, the petitioner specifically raised the above ground, the Assessing Officer while disposing off the objections has not dealt with the same. Even in the petition the said ground is raised, however the same has not been dealt with in the affidavit in reply. In the affidavit in reply it is the case on behalf of the Revenue that while recording the reasons for reopening of the assessment and/or while reopening of the assessment for AY 2009-10, the Assessing Officer has formed an opinion that the income of ₹ 1,66,42,284/- had escaped assessment. However, nothing has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason to believe that there is an escapement of income to the tune of ₹ 1,66,42,284/- for A.Y. 2009-10. 6. The time barring dates for remedial actions u/s 147 is 31.03.2016, in order to settle the audit objection. [5.4] From the aforesaid it appears that even while sending the proposal/communication to the higher authority to grant the approval for reopening the assessment, in para 4 the Assessing Officer continued to maintain that the audit objection raised by the audit party is not acceptable. As observed in para 4 as the tax effect is reported by the audit party is ₹ 74.10 Lacs and to safeguard the interest of Revenue and considering the guidelines in the matter it was proposed to grant approval for a remedial action under section 147 of the Act. It is true that in para 5 the Assessing Officer had mentioned that he has reason to believe that there is an escapement of income to the tune of ₹ 1,66,42,284/-for AY 2009-10. However, both paras 4 and 5 are required to be read together. Considering the above it appears that solely on the audit objection raised by the audit party the assessment is reopened and/or it can be said that the opinion of the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Supreme Court in the case of P.V.S. Beedies Pvt. Ltd. (Supra) and the decision of the Division Bench of this Court in the case of N.K. Industries Ltd. (Supra) by Shri Desai, learned Advocate appearing on behalf of the Revenue is concerned, it is true that the information given by the audit party and/or on the audit objection, can be used for the purpose of reopening of the assessment. However, for that there must be formation of the opinion by the Assessing Officer and/or Assessing Officer independently has reason to believe that the income chargeable to tax has escaped assessment. Even in a given case it may happen that initially the Assessing Officer might have opposed the audit objection by giving reply to the audit party on the audit objection as normally it is the human tendency to stick to what is held and/or decided. However, subsequently, there can be a formation of the opinion by the Assessing Officer on rethink of the entire issue and even considering the audit objection and may form an independent opinion and/or may have a reason to believe independently that the income chargeable to tax has escaped assessment. However, in a case like this where even while sending the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
