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TMI Blog2021 (9) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... as disposed of and for a consequential direction to forbear the respondent from in any manner re-assessing the appellant's income for the assessment year 2008-09 under Section 147 of the Act. 3.Writ Appeal Nos.1922/2021 and 1987/2021 are directed against the common order dated 26.04.2021 in W.P.Nos.38185/2016 and 38186/2016. The common prayer in both the writ petitions is to quash the order passed by the first respondent dated 13.10.2016 by which the objections raised by the appellant against the reopening of the assessment under Section 147 of the Act for the assessment year 2009-2010 and 2010-2011 were disposed of by the respondent. The writ petitions have been dismissed by two separate orders both dated 26.04.2021. 4.Since the petitioner in all the three writ petitions is one and the same, namely, M/s.Thiriveni Earthmovers Private Limited, the facts as stated in W.P.No.10846/2016 are taken for consideration. In this judgment, the appellant shall be referred to as the assessee and the respondent as the revenue. 5.The assessee is a Company registered under the Companies Act, engaged in the business of iron ore mining services, transportation and handling of iron ore and lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to believe that income of Rs. 41,59,51,722/- had escaped assessment within the meaning of Section 147 of the Act, that the assessee had claimed less TDS credit in respect of other deductors corresponding to the TDS of Rs. 36,46,935/- claimed by the assessee in its rectification application dated 20.07.2011 and the assessee has suppressed income of Rs. 2,82,22,870/- on the basis that the assessee had not claimed TDS credit of Rs. 6,39,531/- corresponding to the aforesaid income in the return of income. 7.The assessee would contend that the second respondent failed to show any evidence of any failure on the part of the assessee to fully and truly disclose all materials. The assessee filed their objections to the reopening on 22.11.2015, among other things, submitting that the reopening was completely untenable as complete information was available with the Assessing Officer even at the time of scrutiny under Section 143(3) of the Act and the reopening was contrary to law. The assessee contended that they had made full and true disclosure during the scrutiny assessment, the re-assessment cannot be initiated after four years from the end of the relevant assessment year as per the firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted by the assessee was considered by the Assessing Officer and the information was verified and it was found that there was huge mismatch in the receipts appearing in Form 26AS vis-a-vis receipts credited in P&L account. Therefore, the Assessing Officer had reason to believe that the income of the assessee has escaped assessment and decided to reopen the assessment. Further, the learned Writ Court took note of the fact that the Assessing Officer relied on Justice MB Shah Commission report which was constituted by the Governments of India to enquire into the cases of illegal mining in the State of Odisha. The Court pointed out that the assessee was a raising Contractor employed by one KJS Ahulwalia, who was a lessee whose name finds place in the Commission's report. Noting the materials available on record, the Court opined that there are sufficient reasons to believe that there is escapement of income and the sufficiency of reasons cannot be gone into by the Court in a writ proceedings under Article 226 of the Constitution of India and those are all matters to be adjudicated before the competent authority and therefore, on the grounds raised in the writ petition, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the period covered under the report. Thus, it was contended that on receipt of new material based on the Commission's report, the Assessing Officer had reason to believe that there was escapement of income and thus initiated proceedings under Section 147 of the Act. 13.Further, it was contended that there was failure on the part of the assessee to disclose fully and truly all materials as envisaged in Section 147 of the Act and the assessment was validly reopened. There are fresh tangible material and there are enough reasons which have been set out for reopening the assessment as contained in the orders which were impugned in the writ petitions. With regard to the writ petition filed by the State of Odisha challenging the order of the Mines Tribunal, the Court pointed out that what was challenged in the writ petition is an order dated 16.01.2012 passed by the revisional authority under Section 30 of the Mines and Minerals [Development and Regulation] Act, 1957 and admittedly the assessee was not a party to the proceedings and the writ proceedings were conducted with reference to the issues in an independent manner and the materials relied on by the revenue for reopening t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the Assessing Officer has acted on the basis of Form 26AS available during the assessment proceedings, the same Form 26AS cannot form the basis for reopening under Section 147 of the Act. In so far as Justice MB Shah Commission's report is concerned, the assessee is neither a party nor referred to in the said report and nothing has been independently brought out to link the assessee to the alleged excess production by KJS Ahulwalia. It is submitted that though the assessee has given a detailed explanation, the same was brushed aside by the Assessing Officer while rejecting the objections to the reopening proceedings. Placing reliance on the decision of the High Court of Bombay in Sesa Sterlite Limited and others vs. Assistant Commissioner of Income Tax and others [(2019) 417 ITR 334 (Bom)], it is submitted that the opinion expressed by Justice MB Shah Commission report cannot qualify as information so as to sustain the belief on the part of the Assessing Officer of income having escaped assessment. Therefore, the reopening of the assessment was bad in law. 16.Reliance was placed on the decision of the High Court of Delhi in Commissioner of Income Tax vs. Kelvinator India L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e directions have been complied with. The Court therefore observed that since there is some area of doubt as to whether the order has been complied with or not, it gave liberty to obtain suitable clarification from the very same Hon'ble Court which passed the order dated 21.10.2019 and 19.11.2019 and the matter was adjourned. Subsequently another order was passed by the Assessing Officer on 11.02.2020. The interim directions issued in the writ petitions were referred to by the learned senior counsel with a view to impress upon the Court that when the rectification application was pending, there is no occasion for the Assessing Officer to reopen the assessment, more particularly, for the reasons which have been stated to be the basis for the reopening of the assessment. In fact this submission is without prejudice to the other contentions of the assessee that the entire reopening of the assessment was bad in law. 19.The learned senior counsel referred to the return of income filed by the assessee for the assessment year 2008-2009 in particular Column No.15 which relates to taxes paid and has drawn our attention to paragraph (b) of Column No.15 which deals with TDS and referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer initially and how the reasons furnished shown change of opinion. The records show that no opinion was formed by the Assessing Officer during the original assessment proceedings on the issues which have been mentioned in the reasons recorded in the reopening of assessment. In other words, it is submitted no opinion had been formed by the Assessing Officer during the course of original assessment on the issues under consideration. It is further submitted that the information in Form 26AS which is a statement of TDS deducted and deposited by itself was not used as a reason for reopening of the assessment. Rather the information was matched with the details provided by the assessee in his return of income and accompanying statements/documents and on observing that certain receipts of income were not accounted by the assessee, the Assessing Officer formed the belief that income chargeable to tax had escaped assessment and therefore, has reopened the assessment by issuing notice under Section 148 of the Act. Further, it is submitted that this observation was made from the rectification application filed by the assessee on 20.07.2011 claiming additional credit for tax deduction, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar itself. Therefore, there should not be any deviation in reporting of the gross receipts as this figure is very much available with the assessee and if the assessee had disclosed fully and truly all material facts before the Assessing Officer, there would not be any deviation between its financial statement and Form 26AS. Further, it is submitted that as per Justice MB Shah Commission report, a tabulated statement has been given which lists out 146 lessees who were involved in illegal and excess production of iron ore during the period 2000-2001 to 2009-2010 and KJS Ahulwalia and other persons are lesseses who employed the assessee as raising contractor. The assessee is doing extraction work for the lessee, the contract charges correspond to the value of the excess production was believed to have been suppressed and hence, the Assessing Officer has rightly reopened the assessment. The information in Form 26AS about the receipts of income found out from the rectification application filed subsequent to the assessment proceedings led to the discovery of non-disclosure of receipts in the P&L Account which is a tangible material and hence, exercise of power under Section 147 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TDS and also the receipts which form the income of the assessee. This undoubtedly is a tangible material to form an opinion that the income has escaped assessment. It is seen that from Form 26AS, the Assessing Officer was able to ascertain that the assessee was in receipt of Rs. 419,47,44777 whereas total amount credited in P&L account is Rs. 387,30,50,376. The break-up details were noted and it was pointed out that the income mentioned from sale of boulders, transportation receipts, trailer hire receipts and profit on sale of assets would not form part of receipts appearing in Form 26AS as tax deduction at source is not required on such receipts. Further the assessee has credited in the P&L account an income of Rs. 377,87,93,055/- only out of the total receipts of Rs. 419,47,44,777/- as appearing in Form 26AS. Thus the Assessing Officer while recording reasons for reopening stated that the assessee has suppressed incoe of Rs. 41,59,51,722/- by not crediting entire receipts as appearing in Form 26AS. Further, the Assessing Officer recorded that even if the entire receipts of Rs. 387,30,50,376/- credited in the P&L Account has suffered TDS which is much lesser than the amount appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D Contract Payment 11541112 261522 Tata Steel Ltd. RCHTO0148B Contract Payment 16681758 378009 Total Rs. 2,82,22,870 Rs. 6,39,531 28.Thus, the Assessing Officer recorded that the assessee never disclosed and claimed the above TDS during the assessment proceedings though he had opportunity to do so and therefore, deliberately concealed the particulars during assessment proceedings. Therefore, we are fully satisfied that the issue which is now subject matter of the reopening was never discussed during the original assessment proceedings and no opinion was formed by the Assessing Officer during the original assessment proceedings on this issue. In fact, the issue cropped up only after the assessee filed the rectification application. Therefore, the contention of the assessee that the reopening is a case of change of opinion and based on surmises and conjunctures has to be outrightly rejected. 29.Next we consider as to what would be the effect of the report of Justice MB Shah Commission. The assessee seeks to wriggle out from the rigor of the said report by contending that they are only a raising contractor, they are not party to the proceedings wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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