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TMI Blog2025 (2) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... olative of Article 14 and Article 19 (1) (g) of the Constitution of India. 3. The learned counsel for the petitioner submits that the petitioner is interalia, engaged in the manufacture and supply of soluble instant coffee powder, agglomerated/granule coffee, roast & ground coffee and concentrated liquid coffee and other related products. The petitioner filed its Return of Income for the Assessment Year 2015-2016 and all the audited financials including Form 3CA under Section 44AB of the Income Tax Act, 1961, balance sheets and statement of profit and loss on 28.09.2015 declaring a total income of Rs. 112,58,64,910/-. Then the petitioner received a notice under section 142 (1) of the Income Tax Act, 1961 dated 11.12.2018 from the 1st respondent requesting the petitioner to furnish accounts for the conduct of income tax assessment. The petitioner had complied with the notice received and furnished the required information and accounts including the tax audit report under Form 3CA, Balance sheets and statement of profit and loss. In particular, the petitioner also furnished information regarding interest expenses and the purchased shares of Ngon Coffee Company as requested by the 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on sought by the 1st respondent detailing its investments for an amount of Rs. 150.88 Crs. made as on 31.03.2015, its purposes, the sources of such investments and additional details sought. Again, the petitioner was issued with a notice dated 29.11.2021 (Impugned Notice-2) under section 142 (1) of the Act requesting the petitioner to furnish such information relevant to the AY 2015-2016 such as balance sheets, statements of profit and loss as well as the computation under Rule 8D read with section 14A of the Act for an amount of Rs.5.6 Cr. that was debited towards finance costs. The petitioner was further issued with an order dated 22.12.2021 (Impugned Order) disposing the objections to the reopening of assessment under section 147 of the Act for the AY 2015-2016. In the light of the above said set of facts, the learned counsel for the petitioner contends that the reopening of assessment based on mere change of opinion is not permissible under law, reopening of assessment after the expiry of four years from the end of relevant assessment year is not permissible under law, impugned order is a non speaking order and it is violative of principles of natural justice and as such it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respectively. Thereby the investments in shares during the previous year corresponding to A.Y. 2014-15 have increased by an amount of Rs. 18.34 Crs from the previous year corresponding to A.Y. 2015-16. It is further noticed that assessee has debited the P&L a/c, for the year ended 31.03.2015 an amount of Rs. 5.64 Crs towards finance costs. In view of the above stated facts, given that there are expenses incurred by assessee which are relatable to earning of exempt income, provisions of sec. 14A rwr 8D are squarely applicable to assessee's case, whereby expenses incurred be disallowed as per the provisions of sec. 14A rwr 8D detailed out as under: Investments in shares as on 31-03-2014: Rs. 138.62 Crs. Investments in shares as on 31-03-2015: Rs. 150.96Crs. Total: Rs. 289.58 Crs., Average total Rs. 144.79 Crs. 0.5% of the above Rs. 72,35,000/- Total assets as on 31-03-2014 Rs. 545.55 Crs. Total assets as on 31-03-2015 Rs. 596.29 Crs. Total Rs. 1141.85 Crs. Average total Rs. 570.92 Crs. Total interest debited Rs. 5.64 Crs. Proportionate interest to be disallowed Rs. 144.79/570.92X5.64=1.43Crs. The total disallowance Rs 72,35,000+1,43 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year: 8. In the case of Assistant Commissioner of Income Tax v. ICICI Securities Primary Dealership Ltd. [2012] 24 taxmann.com 310 (SC), in Civil Appeal No.5960 of 2012 dated 22.08.2012, the Hon'ble Apex Court held as under: Leave granted. We have heard learned counsel on both sides. The assessee had disclosed full details, in the Return of Income in the matter of its dealing in stocks and shares. According to the assessee, the loss incurred was a business loss, whereas, according to Revenue, the loss incurred was a speculative loss. Rejection of the objections of the assessee to the re-opening of the assessment by the Assessing Officer vide his Order dated 23rd June, 2006, is clearly a change of opinion. In the circumstances, we are of the view that the order reopening the assessment was not maintainable. The civil appeal is, accordingly, dismissed. No order as to costs. 9. In the case of Commissioner of Income Tax, Delhi v. Kelvinator of India Ltd. [2010] 187 taxman 312 (SC), in Civil Appeal Nos.2009-2011 of 2003 and 2520 of 2008, dated 18.01.2010, the Hon'ble Apex Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated supra, the 1st respondent issued notice under sub-section (1) of Section 142 of the Income Tax Act, 1961 for the AY 2015-2016 dated 11.12.2018 to the petitioner to furnish the accounts and documents specified as per the Annexure to the said notice which includes interest expenses, number of shares of Ngon Coffee Company purchased by the petitioner and what is the actual cost paid per share in VND and in INR at the time of purchase and what is the face value of each share at the time of purchase etc., apart from the other information to be furnished as detailed. Accordingly, the details of interest expenses were submitted. On furnishing the entire information by way of Return of Income by the petitioner, the 1st respondent completed the assessment under section 143 (3) of the Act by passing the assessment order dated 28.12.2018 which reads as under: The assessee is a company engaged in the business of manufacturing of instant coffee / soluble coffee, filed their Return of Income for the Asst. Year 2015-16 on 28.09.2015, declaring a Total Income of Rs. 112,58,64,910/-. The return was processed u/s 143(1) of the IT Act. Subsequently, the case was selected under CASS for compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no tangible material to come to the conclusion that there is escapement of income from the assessment. The above said impugned action of the respondent department thus does not establish that there was any failure to disclose fully and truly all the material facts necessary for the assessment. There has been no averment in the above said impugned notices and the order that the amount of income tax involved is more than Rs.1 lakh to attract section 149 (1) (b) of the Income Tax Act, 1961. Failure to mention in the above said impugned notices that there has been a failure to disclose fully and truly all the material facts and that the income involved is more than one lakh would vitiate the assessment sought to be reopened after four years. It is the assessing officer who needs to assess any disallowance under section 14A based on the information provided by the petitioner. Onus to make an appropriate determination of amount of expenditure in terms of section 14A of the Act lies on the assessing officer and when there is no failure on the part of the assessee in making available all the relevant account books, materials and documents, the assessing officer cannot assume jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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