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TMI Blog2021 (8) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, the petitioner is falling under the large tax payer unit and certain intricacies in deeper manner requires more adjudication with reference to the issues raised. Such an elaborate adjudication cannot be done with reference to the issues as the Assessee has to avail the opportunities to be provided, while proceeding with the reassessment proceedings and it is for the Assessee to participate in the reopening proceedings and avail the opportunities to be provided for the purpose of completion of reopening proceedings. This being the factum and the principles to the followed, this Court has no hesitation in arriving a conclusion that the Assessing Officer in the present case has established that he has reason to believe for reopening of assessment and there is no infirmity, as such, in reopening of the assessment u/s 147/148 - The petitioner has to cooperate for the early completion of the reopening proceedings. WP dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... opening are met with complete particulars in comparison with the discussions and the adjudication made by the Assessing Authority, while passing the original assessment order under Section 143(3) of the Income Tax Act, 1961. 8. The learned counsel for the petitioner reiterated that all the issues were adjudicated elaborately and the very same subject matter and the very same particulars are taken into consideration for the purpose of reopening of assessment in a different language and therefore, it is a case of change of opinion and cannot be fit in with the provisions of Section 147 of the Income Tax Act, 1961. 9. It is contended that the petitioner-Company have categorically explained the reasons for assessment and the details submitted during the assessment proceedings under Section 143(3) of the Income Tax Act, 1961 and references were also cited. Therefore, there is no reason whatsoever for reopening of assessment. 10. The learned counsel for the petitioner further contended that, while disposing of the objections, the Competent Authority has not considered any of these objections raised with complete details and blanketly stated that the reopening of assessment is in accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reopening of assessment order would show that from and out of the materials, the Assessing Authority has reason to believe that dis-allowance of provision for lease equalisation and charges under Section 115JB was made. That was not taken into consideration while arriving a taxable income under Section 115JB. 17. Further, relying on the reasons furnished for reopening of assessment contended that on those particulars, the Assessing Officer has reason to believe that the income chargeable to tax on escaped assessment. When the Assessing Officer could able to trace out certain new materials from and out of the materials submitted by the Assessee during the original assessment proceedings, such informations are also sufficient enough for the purpose of reopening of assessment. It is for the Assessee to participate in the reopening proceedings and place the records, enabling the authority to complete the reopening proceedings by following the procedures. 18. Considering the arguments as advanced by the respective learned counsel appearing on behalf of the parties to the lis on hand, this Court has to consider the fact that reopening of assessment in the present case is made within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctual inference and the application of provisions of Income Tax Act and the interpretation required to be given in such circumstances, creates a reason to believe for the authority that the income escaped assessment and reopening of assessment is initiated. 24. Thus it is not as if the Assessee can simply compare the issues discussed by the Assessing Authority and the reasons furnished for reopening of assessment. Within the issue, if materials are culled out, which is not discussed or adjudicated by the original assessing authority, then reopening of assessment is allowable and therefore, mere comparison would undoubtedly result in denial of an opportunity for the revenue to bring the tax escaped assessment within the net work. All these intricacies required to be considered in such cases, where the materials shown are one and the same both in the original assessment order as well as in the reasons furnished for reopening of assessment. 25. The other ground raised by the petitioner is that the Assessing Authority, while disposing of the objections, has not considered the objections. Though the petitioner has elaborately submitted the objections with reference to the reasons furn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years." 29. Though the Income Tax Act provides opportunity to an Assessee, the Supreme Court thought fit that an opportunity to be provided under the Income Tax Act must be in compliance with the principles of natural justice. That prompted the Apex Court to issue a direction in GKN Driveshafts (India) Ltd case (cited supra). The directions are that when a notice under Section 148 of the Income Tax Act is issued, the Assessee may file a return if he so desires and to seek reasons for reopening. The Supreme Court says that the Assessing Officer is bound to furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons furnished are having live link with the initiation of proceedings. The said nexus as well as the materials or informations considered for reopening would be sufficient. 35. Thus, the disposal of objections must be read with reference to the requisite condition contemplated under Section 147 of the Income Tax Act, i.e., "the Assessing Officer has reason to believe". If the said requirement is complied with, it would be sufficient to proceed with the reassessment proceedings. It is not as if the entire adjudication of issues must be done by the Assessing Officer while disposing of the objections filed by the petitioner with reference to reasons furnished within. 36. The point to be considered is that even after disposal of the objections if the Assessing Officer under Section 147 of the Income Tax Act noticed that any other income chargeable to tax which has escaped assessment during the course of proceedings, then also he is empowered to reassess such income. Thus various circumstances made available for the Assessing Authority to reopen the assessment, cannot be interfered with in a routine manner. The authority must be permitted to complete the reassessment proceedings in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es relating to its export earnings. In the return of income, the assessee has claimed an amount of INR 82,06,13,134/- being the mark to market loss on restatement of outstanding forward contracts as on 31.03.2013 as a deduction in computing the income under the head profits and gains from business or profession. Since the above unrealised expenses being the mark to market loss is not an allowable expenditure and requires to be disallowed and brought to tax. (3) It is seen from Notes forming part of the Financial Statements for the year ended 31.03.2013, vide Sl. No.25 under other expenses, an amount of ₹ 1,86,03,66,315/- was shown as expenses towards software. However, software being an intangible asset requires to be claimed depreciation at 25%. The entire expenditure should not be claimed an expenditure. Hence, the excess allowance requires to be brought to tax. On verification of break up details of repairs and maintenance an amount of ₹ 20,11,71,783/- was considered as computer software. The above expenditure should be restricted to 25% depreciation as against the 100%. This has resulted in excess allowance as under. .. .. .. ... .. .. ... .. .. .. .. (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in accordance with the provisions of Section 147 of the IT Act 1961. 5.3 From the above it is clear that the reassessment is permissible when Assessing Officer did not form opinion on any issue during first assessment and if any reason to believe is formed for escapement of income chargeable to tax that itself is sufficient enough to initiate reassessment proceedings. In view of the above discussion, your objection that reassessment proceedings were based on mere change of opinion and not based on any reason to believe and therefore the reassessment proceedings are invalid is rejected. 6.1. The Assessee's objection is carefully considered, however, it is not accepted for the reason that in the said case (Sahkari Khand Udyog Mandal Limited vs. ACIT) certain direction was issued by the Hon'ble High Court of Gujarat to the concerned Chief Commissioner. With due respect it may considered that the said decision is not binding in the assessment under consideration as the said decision is not of jurisdictional High Court. Hence Assessee's contention is not entertainable". 41. The learned counsel for the petitioner referred some of the judgments and so also the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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