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TMI Blog2016 (12) TMI 1558X X X X Extracts X X X X X X X X Extracts X X X X ..... there cannot be any reassessment for the verification. At this stage it is required to be noted that even in the reasons recorded, there is no allegation that there was any failure on the part of the assessee in not disclosing truly and fully material facts necessary for assessment. Under the circumstances, the assumption of the jurisdiction to reopen the assessment beyond the period of four years in exercise of powers under section 147 of the Act is bad in law and contrary to the provisions of section 147 of the Act. Under the circumstances, on the aforesaid ground alone, the impugned reassessment proceedings deserve to be quashed and set aside. - Decided in favour of assessee - SPECIAL CIVIL APPLICATION NO. 16204 of 2016 - - - Dated:- 20-12-2016 - MR. M.R. SHAH AND MR. B.N. KARIA, JJ. FOR THE PETITIONER : MR B S SOPARKAR, ADVOCATE FOR THE RESPONDENT : MR SUDHIR M MEHTA, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.00. By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for appropriate writ, order and/or direction to quash and set aside the impugned notice issued by the respondent, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the A.Y. 2009-2010 is bad in law and without jurisdiction. 3.01. Mr.Soparkar, learned advocate appearing on behalf of the petitioner has further submitted that even the reasons of reopening are ambiguous and vague inasmuch as it does not reveal any income escaped much less due to any failure on the part of the petitioner truly and fully disclose all material facts. It is submitted that the respondent has adopted Lavenshtein Distance Analysis or digit edit analysis utility, both of which are foreign to the Income Tax Act, 1961, to suggest that the distance of variation in case of the petitioner as per Lavenshtein Distance Analysis comes at 3 and in the opinion of the respondent if the distance is 1 then the mistake is genuine but if the same is 4 or 5 then it cannot be a genuine mistake but a deliberate change. It is submitted that therefore, even as per the opinion of the respondent himself, the case of the petitioner where distance is 3, does not fall within the distance of 4 and 5 and yet the respondent seeks to reopen the completed assessment. 3.02. Mr.Soparkar, learned advocate appearing on behalf of the petitioner has further submitted that the respondent has merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the client s code in case of the assessee, by applying Lavenshtein Distance Analysis or digit edit analysis utility, in those cases where the assessee is original client and the transactions were carried out from the assessee s client code, then subsequently client code was modified to other client and the total and the total reduction in income due to CCM was to the tune of ₹ 1,19,848/-. It is submitted that after receiving specific information and forming satisfaction for reopening of the case, and after getting approval from the competent authority, notice under section 148 of the Act has been issued. It is submitted that therefore, reopening of the case has been made after following procedure as required under the Income Tax Act. It is submitted that therefore, the impugned reopening proceedings are in consonance with the provision of section 148 read with section 148 of the Act. Therefore, it is requested to dismiss the present petition. 5.00. Heard the learned advocates appearing on behalf of the respective parties at length. 5.01. At the outset, it is required to be noted that the impugned notice under section 148 of the Act to reopen the assessment in exercis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Binay R. Chaturvedi WW/2108 3 Rs.1,19,848/- In order to verify the genuineness of the error, the Lavenshtein Distance analysis or digit edit analysis utility is also provided by the investigation Wing. This utility gives a clear indication as to whether the code is wrongly typed or is completely replaced. If the number of digits changed from original code to modified code is 1, then it can be reasonably argued that the OCC (Original Client Code) may have been typed wrongly by mistake. Similarly, if the number of digits changed is more say 4 or 5,it cannot be genuine mistake buyt a deliberate change. To this extent, Levenshtein Distance Analysis or digit edit analysis act as a clear indicator for genuineness in client code modification. In short, the longer the distance (i.e. number of digits changed), the lesser the chance of genuineness. 3. Hence, the editing of client code above it is termed as deliberate change and establishes the non-genuineness and contrived nature of the code change. 4. In view of the above facts, I have reason to believe that the income to the extent of ₹ 1,19,848/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the assessee and thereafter is required to form an independent opinion on the basis of the material on record that the income has escaped assessment. Without forming such an opinion, solely and mechanically relying upon the information received from other source, there cannot be any reassessment for the verification. 5.04. At this stage it is required to be noted that even in the reasons recorded, there is no allegation that there was any failure on the part of the assessee in not disclosing truly and fully material facts necessary for assessment. Under the circumstances, the assumption of the jurisdiction to reopen the assessment beyond the period of four years in exercise of powers under section 147 of the Act is bad in law and contrary to the provisions of section 147 of the Act. Under the circumstances, on the aforesaid ground alone, the impugned reassessment proceedings deserve to be quashed and set aside. 5.05. In view of the above and for the reasons stated above, present petition succeeds. The impugned notice issued under section 148 of the Income Tax Act, 1961 and reopening of the proceedings for A.Y. 2009-2010 cannot sustain and the same deserves to be quashed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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