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TMI Blog2022 (10) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner and considered by AO in the course of regular assessment. The Assessing Officer was within the know of such facts and details. Reassessment notice was acted upon basing the formation of reasons on very facts. It amounted to change of opinion on part of the Assessing Officer which is not permissible in law. Also on facts, it was the case of clear change of opinion on part of the Assessing Officer in exercising powers to reopen the assessment but he misguided himself in law in seeking to reassess the income on the ground of mined and produced. It could not have acted on the same material which was examined by him in the regular assessment, in addition that the erring Officer erred in law too. Thus the present petition deserves to be allowed. It is accordingly allowed. - R/SPECIAL CIVIL APPLICATION NO. 18767 of 2018 - - - Dated:- 21-10-2022 - HONOURABLE MR. JUSTICE N.V.ANJARIA AND HONOURABLE MR. JUSTICE BHARGAV D. KARIA Appearance: MR SN DIVATIA(1378) for the Petitioner(s) No. 1 M R BHATT CO.(5953) for the Respondent(s) No. 1 CAV JUDGMENT (PER : HONOURABLE MR. JUSTICE N.V.ANJARIA) Heard learned advocate Mr. S.N. Divatia for the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the petitioner. It is this notice which is brought under challenge in this petition. By letter dated 6.4.2018 the petitioner requested the respondent to supply the copy of reasons recorded by the Assessing Officer for reopening the assessment. Reasons were supplied to the petitioner on 14.8.2018. The petitioner e-mailed its objections on 1.9.2018 and the petitions were disposed of by order dated 28.9.2018. 4. Learned advocate for the petitioner submitted that the notice under Section 148 of the Act and the order disposing of the objections were without jurisdiction. It was next submitted that for reopening the assessment under Section 147 of the Act, certain conditions were required to be satisfied. Firstly, the Officer must form a tentative opinion that there was an escapement of the income during the year under consideration and that he must record such prima facie opinion in writing. It was submitted that it should be demonstrated on the information available and the reasons recorded that the opinion so formed was not mere suspicion. It was further submitted that the condition to be satisfied is that the information and documents available on record must show nexus to the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29.02.2016. On scrutiny of profit and loss account, computation of income, balance sheet, 3CD report and submissions of assessee during the course of assessment, it was seen that assessee has incurred royalty expenditure of Rs. 1,93,45,708 on marble rubble mined. In the from 3CD report, the assessee has stated that it has mined 2,96,816 MT of marble rubble during the year. It was noticed that as per Gujarat Minor Mineral Concession Rules, 2010 that royalty at the rate of Rs.60 per MT is leviable on marble rubble. At this rate the marble rubble produced comes to 3,22,428MT (=1,93,45,708 / 60). The assessee has shown mining of marble rubble to the extent of 2,96,816 MT only. This shows that the assessee has under reported mining production of marble rubble by 25,612 MT. As assessee has sold the rubble marble on an average rate of Rs. 743 per MT, the consequent under reporting of profit comes to Rs. 1,90,29,716 (25,612 x.743). I have, accordingly, reason to believe that the income of Rs. 1,90,29,716 / has escaped assessment within the meaning of Section 147 of the Act. The assessment year involved is A.Y. 2013-14 and thus, it is covered under sub section (2) of Section 151 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th wise details opening stock, purchase, sales and closing stock of different materials and to indicate the quantity and value. The assessee had disclosed such details by forwarding letter dated 5.1.2016. In the ledger account, figuring on record, the amount towards royalty- block was shown to be Rs.11,042,436/-, surface rent was shown Rs.51,487/- and the royalty on marble rubbles was shown to be Rs.19,345,708/-. 5.4 When the respondent had called for details of the regular assessment and had examined the quantity of the marble rubbles, produced and sold, at that time, satisfying the query, the petitioner had given complete details of quantity of marble rubble in tax audit report in Form 3-CD at serial No.28. The details were also produced in Part-A-QD of prescribed return of income in Form ITR-6. In the course of regular assessment proceedings, as stated above, the respondent had asked relevant details under item No.22 which was furnished by the petitioner in reply dated 18.8.2015 detailing ledger account with complete narration relating to the royalty paid on the relevant quantity of sale of marble rubble was shown. The respondent had fully examined the rubble aspect and the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of opinion as an inbuilt test to check abuse of power by the Assessing Officer. 5.7 In Inductotherm (India) Private Limited [356 ITR 481] Division Bench of this court in the context of reopening of the assessment which was framed without scrutiny held and observed as under in para 13, Despite such difference in the scheme between a return which is accepted under section 143(1) of the Act as compared to a return of which scrutiny assessment under section 143(3) of the Act is framed, the basic requirement of section 147 of the Act that the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment is not done away with. Section 147 of the Act permits the Assessing Officer to assess, re-assess the income or recompute the loss or depreciation if he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. This power to reopen assessment is available in either case, namely, while return has been either accepted under section 143(1) of the Act or a scrutiny assessment has been framed under section 143(3) of the Act. A common requirement in both of cases is that the Assessing Officer should ..... X X X X Extracts X X X X X X X X Extracts X X X X
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