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TMI Blog2022 (2) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... ets repurchase - The situation which is obvious is that during the course of the scrutiny assessment under Section 143(3) of the Act, 1961, the Assessing Officer had made specific query as regards leased assets repurchase expenses and solicited explanation and documents. In compliance thereto, the petitioner furnished the requisite information and documents. It is true that in the assessment order dated 18th December, 2008, the Assessing Officer did not specifically advert to the said aspect of the matter and in terms record that the explanation so furnished was accepted and allowance upheld. However, this factor is not of decisive significance. It is trite law that once a query is raised and the assessee furnishes explanation thereto, the Assessing Officer is presumed to have applied his mind to the question so raised and the fact that the Assessing Officer had not specifically dealt with the said aspect in the assessment order does not justify an inference that the Assessing Officer did not consider the same. On the contrary, it would be justifiable to assume that the Assessing Officer was satisfied with the explanation so furnished by the assessee. Once it becomes evident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 - K. R. SHRIRAM N. J. JAMADAR, JJ Mr. J. D. Mistri, Senior Advocate, a/w Mr. Madhur Agrawal, and Mr. Rajesh Poojary, i/b Mulla Mulla, CB C, for the Petitioner. Mr. Suresh Kumar, for the Respondents. JUDGMENT: (PER : N. J. JAMADAR, J.) 1. Rule. Rule made returnable forthwith, and with the consent of the Counsels for the parties, heard finally. 2. The petitioner assails the legality and validity of a notice dated 25th February, 2013, issued by respondent no.1 under Section 148 of the Income Tax Act, 1961 ( the Act, 1961 ) and the order dated 17th February, 2014, whereby the objections raised by the petitioner to the said notice to reopen the assessment for Assessment Year 2006 2007, came to be rejected. 3. The background facts leading to this petition can be stated in brief as under: (a) The petitioner is a company engaged in the business of running a petroleum refinery. In respect of Assessment Year 2006 2007, the petitioner filed the return of income on 25th October, 2016. It came to be revised on 28th March, 2008. In the revised return of income the petitioner disclosed total income of Rs.Nil under the normal provisions of the Act, 1961 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice suffers from clear non-application of mind as respondent no.1 lost sight of the fact that the amount of ₹ 1,78,05,149/- was added back to the computation of income by the petitioner itself and no deduction was claimed on the said count. Thirdly, since the scrutiny assessment under Section 143(3) of the Act, 1961 was completed in respect of Assessment Year 2006 2007, respondent no.1 committed an error in assuming jurisdiction without satisfying himself that the income had escaped assessment on account of failure on the part of the petitioner to disclose fully and truly all material facts necessary for the assessment. In the case at hand, the issues sought to be raised by respondent no.1 were specifically adverted to, and dealt with, in the original assessment. Fourthly, in any event, the exercise on the part of respondent no.1 was in the nature of taking a different view of the matter on the basis of a mere change of opinion with regard to the same material. Therefore, the impugned notice under Section 148 and the consequent action deserve to be quashed and set aside. 5. An affidavit-in-reply is filed on behalf of respondent no.1. An endeavour is made to support the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submission appears impeccable. The reasons recorded by the Assessing Officer, which we have extracted above, on purpose, singularly lack the element of satisfaction recorded by the Assessing Officer that the escapement of income was on account of the failure on the part of the petitioner to make a true and full disclosure. Nay, there is no assertion that there was a failure to disclose on the part of the petitioner. As the first Proviso to Section 147 of the Act, 1961 operated, it was incumbent upon the Assessing Officer to satisfy himself about the twin conditions; that there was a reason to believe that there was an escapement of income and such escapement was the effect of failure to make a true and full disclosure of the material facts by the petitioner, before the Assessing Officer assumed jurisdiction to issue notice for reopening the assessment. In other words, the causal connection between alleged escapement and failure to disclose is simply non-existent. 10. The next challenge to the reopening of the assessment on the count that, in fact, the petitioner had made a full and true disclosure of the material, which forms the basis of the alleged reasons to believe escapemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Aroni Commercials Ltd. vs. Deputy Commissioner of Income-tax-2(1) [2014] 44 taxmann.com 304 (Bombay)., wherein the following observations were made:- 14. We are of the view that once a query is raised during the assessment proceedings and the assessee has replied to it, it follows that the query raised was a subject of consideration of the Assessing Officer while completing the assessment. It is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. If an Assessing Officer has to record the consideration bestowed by him on all issues raised by him during the assessment proceeding even where he is satisfied then it would be impossible for the Assessing Officer to complete all the assessments which are required to be scrutinized by him under Section 143(3) of the Act. Moreover, one must not forget that the manner in which an assessment order is to be drafted is the sole domain of the Assessing Officer and it is not open to an assessee to insist that the assessment order must record all the questions raised and the satisfaction in respect thereof of the Assessing Officer. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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