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TMI Blog2018 (4) TMI 1781X X X X Extracts X X X X X X X X Extracts X X X X ..... ecting the reasons, neither in the affidavit of reply. How a preexisting Circular amounts to discovery of new tangible material is also not explained. Therefore, what is before us is only a change of opinion of the Assessing Officer, without any new material. The Petitioner had placed the material before the Assessing Officer. The Assessing Officer is supposed to apply law, including the Circulars, to the material placed before him. The Assessing Officer took a particular view and the Respondent no. 1 has merely on a change of opinion sought to reopen the proceedings. Since the criteria for exercise of the jurisdiction are not met, the action of the Respondent no.1 is without jurisdiction and will have to be set aside. - WRIT PETITION NO. 1001 of 2017 - - - Dated:- 11-4-2018 - N. M. Jamdar And Prithviraj K. Chavan, JJ. For the Appellant : Mr. K. Gopal, Advocate with Mr. Shivan Dessai, Advocate For the Respondent : Ms. Susan Linhares, Junior Standing Oral Judgment (Per N. M. Jamdar, J) Rule. Rule made returnable forthwith. Respondents waive service. Taken up for disposal. 2. By this Petition, the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st 2015 observed thus: 2. In response to notices issued, Shri. Ashish Prabhu Verlekar, Chartered Accountant appeared from time to time and produced various details asked for and the case was discussed vis-a-vis assessee showing its income as Agricultural Income. 3. The assessee Zuari Foods and Farms Pvt. Ltd. is engaged in Mushroom farming activities in Cancona, Goa, Mushroom grows from long fine white grey threads called mycelium which ultimately develop fruiting bodies when treated under specific/controlled conditions. Mushrooms are grown in a closed chamber and various other aspects of cultivation of Mushroom are discussed with Shri Verlekar, CA AR of the assessee. He also produces various Certificates/Letters issued by different Govt. Authorities in support of assessee disclosing its income from Mushroom Cultivation as Agricultural Income. These include a) Certificate from Directorate of Agriculture certifying that Mushroom growing is agricultural activity. b) Registration Certificate from Ministry of Civil Supplies, Consumer Affairs and Public Distribution (Weight and Measures) stating the product to be fresh mushrooms (vegetable). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been taken in respect of the Petitioner. The Petitioner also pointed out that the CBDT Circular no. 258 dated 14 June 1979 which was made basis of reopening the assessment on the grounds that tangible material, was not applicable as it has lost its relevance after promulgation of Section 80JJA and in view of the subsequent circular dated 27 March 2009. 6. While dealing with the objections the Assistant Commissioner of Income-Tax Respondent no. 1, reiterated the objections raised and sought to base its order on the premise that mushroom farming cannot be considered as Nursery, neither it can be considered as agricultural income and in view of the circular dated 14 June 1979, which ought to have been considered, the reassessment proceedings need to be continued. With this reasoning the Respondent no. 1 passed the impugned order. 7. We have heard Mr. K. Gopal, the learned Counsel for the Petitioner and Ms. S. Linhares, the learned Standing Counsel for Respondent no. 1. 8. Mr. Gopal, learned Counsel for the Petitioner relied upon the decision of the Apex Court in the case of Commissioner of Income Tax vs. Kelvinator of India Ltd [2010] 320 ITR 561 (S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 and 148 deal with Section of reopening of assessment. Section 147 provides that if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned. In respect of the reopening of Assessment after period of four years, Section 147 states that no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. In the present case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rters on behalf of the foreign principal. Under the agreement, the assessee was entitled to a commission for services rendered to its foreign principal. For the assessment year 2006-07, the assessee had filed its return. The assessee had not allocated for its use certain container detention charges in accordance with the RBI circular. This fact was disclosed in the returns. The order of assessment contained a specific discussion on items in respect of which the Assessing Officer made disallowances. However, as regards the submission of the assessee on an amount representing US dollars of the container detention charges, the Assessing Officer did not make any specific observation. A notice of reassessment was issued on the ground that in the assessment for the year 2007-08 this amount had been added to the income of the assessee. With this factual backdrop the question that arises for consideration before the Division bench was whether the assessment of the Assessee therein could be reopened under Section 147 of the Act within the period of four years. It was contended on behalf of the Assessee that there is no tangible material on the basis of which reassessment is sought to be reo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s background, that the facts of the present case will have to be evaluated. We have reproduced the order passed by the Assessing Officer dated 27 August 2015. The issue whether the activity of the Petitioner is agriculture or not clearly arose before the Assessing Officer. The Assessing Officer considered the aspect of mushroom cultivation. The Petitioner had produced various certificates and letters including that of the Pollution Control Board stating that growing and processing tropical mushroom in Goa is not an agricultural activity. Based on this material the Assessing Officer accepted the case of the Petitioner and recording a categorical finding treated the income as an agricultural income. 17. When the impugned notice was served on the Petitioner and reasons were supplied, the Respondent no. 1 -Commissioner stated in the reasons that mushroom cultivation cannot be treated as agricultural activity as it has no connection with land. Apart from the comments on the manner of cultivation, as it can be seen from the reasons given and which is also the argument of Ms. Linhares, substantial emphasis was placed on Circular of the year 1979. When the Petitioner submitted hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent No.1- Assistant Commissioner of Income-Tax has observed as under: The Income-Tax Act provides a complete machinery for the assessment-reassessment of tax, imposition of penalty and for obtaining relief in respect of any improper order passed by the revenue authorities. The law says that, it is mandatory, to first exhaust all avenues under the Income-Tax Act (which are equally effective) before filing a Writ Petition (WP) before the Hon'ble High Court, and no assessee can bypass the alternate remedies availabel under the Income-Tax Act and file WP to bring interim order, to short circuit and circumvent the statutory procedure in finalization of the re-assessment order. It is, therefore clear, that, the assessee cannot be permitted to abandon the alternate remedies available to it, and to invoke the jurisdiction of the High Court under article 226 of the Constitution, and thus the Writ Court should not entertain the writ Petition.. Hence, you are not eligible to file writ petition at this stage, to get interim stay before the finality of re-assessment proceedings. Courts also do not encourage such short-cut methods to jeopardize reassessment proceedings, as exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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