9911796707
TMI Blog2019 (7) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... ial, the assessment cannot be reopened on some change of opinion. In the facts and circumstances of the present case, we are of the view that the issue of notice u/s 148 is not justified. In the result, this petition succeeds and is hereby allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... 08.15, furnished the following details among various other details: Details of month-wise "purchase" and "sales" in the specified format (Point "10"); Details of "Sales promotion expenses" along with supporting evidences (Point "14"); Copy of letter dated 14.08.15 along with details of purchases and sales is annexed herewith and marked hereto as ANNEXURE "D (Colly.)" 2.6 The petitioner, vide letter dated 07.11.14, also placed on record ledger of "Kamdhenu Enterprise" (Point "iv") as well as names of the persons who attended the conference, tours, etc. (Point "v"). copy of letter dated 07.11.14 is annexed herewith and marked as ANNEXURE "E". 2.7 The then Assessing Officer, after perusing the details as well as the documentary evidences furnished by the petitioner, consciously chose not to make any addition in respect of sales promotion expenses, purchase or sales while framing assessment under section 143(3) of the Act vide order dated 26.10.15. Copy of the Assessment Order dated 26.10.15 passed under section 143(3) of the Act is annexed herewith and marked as ANNEXURE "F". 2.8 Suddenly thereafter, the Respondent issued the impugned notice dated 30.03.18 under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus, against the purchases of ₹ 7,81,132/- for the month of March 2013, total sales including value of branch transfer aggregated to ₹ 1,62,29,929/- (i.e. ₹ 80,89,891/- + ₹ 81,40,038/-). Hence, the Respondent is of the view that the petitioner must be in possession of goods valuing at least ₹ 1,62,29,929/- or more. It is further mentioned in the reasons that permutation-combination of incoming and outgoing goods reveals that the petitioner does not have goods available for such huge dales. Thus, the Respondent is of the view that further verification and investigation is required in connection with the same. Hence, the case of the petitioner has been reopened. Copy of letter dated 30.05.18 along with reasons for reopening is annexed herewith and marked hereto as ANNEXURE "G" (Colly.). 2.11 The petitioner, vide letter dated 18.07.18 (filed on 27.07.18), raised objections against reopening. The petitioner made various factual and legal submissions in the objections raised against reopening. Thus, it was submitted that the action of reopening is not justified and hence, reopening proceedings deserves to be dropped. Copy of letter daetd 18.07.18 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Hemani places reliance on the decision of the Supreme Court in the case of Commissioner of Income-Tax vs. Kelvinator of India Ltd. reported in (2010) 320 ITR 561 (SC). 5. On behalf of the Revenue affidavit-in-reply has been filed, duly affirmed by one Shri M.N. Sahay, Income Tax Officer, Ward-2(1)(2), Ahmedabad, inter alia, stating as under : "2. At the outset, I most respectfully submit that the petition is filed at a pre-mature stage in as much as only a notice u/s. 148 read with section 147 of the Income Tax Act ('the Act' for short) has been issued. In the event, the petitioner is aggrieved by the reassessment, alternative efficacious remedy is available by way of an Appeal to the CIT(A) and thereafter to the Tribunal as per the provisions of the Act. On this ground alone, I humbly submit that the petition is devoid of any merits and be summarily rejected. 3. Without prejudice to the above para wise reply to the petition is as under : 4. The facts are that the assessee company filed E return of income for AY 2013-14 on 28.09.2013 declaring total income at NIL. The case was thereafter selected for scrutiny and assessment order under Section 143(3) was passed on 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roviding the details. Therefore, notice issued under Section 148 is valid notice. 8. It is submitted that in this case, notice under Section 148 was issued on 30.03.2018 for AY 2013-14 which is within a period of four years from the end of the relevant Assessment Year. As can be seen from the original assessment order, no opinion is formed in original assessment order in relation to the grounds stated in the reason recorded. Therefore, there cannot be any change of opinion as alleged. Therefore, notice issued by the Assessing Officer is legal and valid notice. 9. With reference to para 4 to 7, it is submitted that sufficiency of reason is not open to question in a court of law but existence of belief can be challenged. The Hon'ble Court can examine whether the reasons are relevant or have bearing in the matters with regard to which he is required to entertain the belief before he can issue notice. Moreover, reliance is also placed in the case of Commissioner of Income-tax vs. Chhabil Dass Agarwal ITR 357 (SC)/[2013] 261 CTR the hon'ble Supreme Court has held that when statutory forum is created by law for redressal of grievances, a writ petition should not be entertai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Legislature presumably in view of the highly complex nature of assessment proceedings involving large number of assessees concerning multiple questions of claims, deductions and exemptions, which assessments have to be completed in a time frame. To protect the interest of the revenue, therefore, such special provisions are made under section 147 of the Act. However, it must be appreciated that an assessment previously framed after scrutiny when reopened, results into considerable hardship to the assessee. The assessment gets reopened not only qua those grounds which are recorded in the reasons, but also with respect to entire original assessment, of course at the hands of the revenue. This obviously would lead to considerable hardship and uncertainty. It is precisely for this reason that even while recognizing such powers, in special requirements of the statute, certain safeguards are provided by the statute which are zealously guarded by the courts. Interpreting such statutory provisions courts upon courts have held that an assessment previously framed cannot be reopened on a mere change of opinion. It is stated that power to reopening cannot be equated with review. 42. Beari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons in the assessment order would not alter this position. It may be a non-reasoned order but not of acceptance of a claim without formation of opinion. Any other view would give arbitrary powers to the Assessing Officer. 48. Before closing this issue, we would like to clarify one aspect. We have expressed our opinion on the question framed by us. In a given case, it may so happen that a particular claim may have many facets. For example, a claim of deduction under section 80- HHC of the Act would have various parameters. If one of the parameters is scrutinized or accepted either with or without reasons, that by itself may not mean that the entire claim of deduction under section 80- HHC of the Act stood verified and accepted by the Assessing Officer. We hasten to add that each case must depend on facts individually and in a given case, it may be possible for the assessee to argue that all aspects of the claim were examined or that different facets of the claim were so inextricably interlinked that the assessing officer must be taken to have examined the entire claim. We only clarify that our answer to the second question must be seen within the limited scope of the question its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, Assessing Officer has power to re-open, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to Section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words "reason to believe" but also inserted the word "opinion" in Section 147 of the Act. However, on receipt of representations from the Companies against omission of the words "reason to believe", Parliament reintroduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer. We quote hereinbelow the relevant portion of Circular No.549 dated 31st October, 1989, ([1990] 182 ITR (St.) 1, 29) which reads as follows : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve credit for prepaid taxes after due verification. Issue demand notice and challan and RO as the case may be." 6.3 The writ applicant was served with a notice under Section 142(1) of the Act, 1961 calling upon him to furnish certain details. The notice is at Page 20 Annexure "B" to this petition. Clause - xiv reads thus : "(xiv) Please furnish the complete details of sales promotion expenses with account copy, name and address of parties, PAN, confirmation, its business expediency etc." 6.4 The writ applicant was asked to furnish a complete details of the sales promotion expenses with account copy, name and address of the parties, PAN, confirmation, its business exigencies, etc. It is not in dispute that such details were furnished by the writ applicant at the relevant point of time in response to the notice issued under Section 142(1) of the Act, 1961. The department seeks to reopen the assessment on the ground that the income chargeable to tax to the extent of ₹ 20,00,271/- had escaped assessment and, therefore, further verification and investigation is required. In the copy of the reasons recorded for reopening of assessment under Section 147 of the Act for A.Y. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
