2012 (8) TMI 714 - GUJARAT HIGH COURT

Reassess income/recompute loss/ depreciation allowance - notice under Section 148 - directions from Dispute Resolution Panel (DRP) - writ petition - Held that:- Writ petition under Article 226 of the Constitution of India is maintainable where no order has been passed by the AO deciding the objection filed by the assessee u/s 148 and assessment order has been passed or the order deciding an objection u/s 148 has not been communicated to the assessee and assessment order has been passed or the objection filed has been decided along with the assessment order, thus it was not open to the AO to decide the objection to notice under section 148 by a composite assessment order - AO was required to, first decide the objection of the assessee filed u/s 148 and serve a copy of the order on assessee. And after giving some reasonable time to the assessee for challenging his order, it was open to him to pass an assessment order. This was not done by the AO, therefore, the order on the objection to the notice u/s 148 and the assessment order passed under the Act deserves to be quashed - in favour of assessee.

Re-opening of assessment - non application of provisions of Section 32(2) by AO - Held that:- Once the AO notices a certain claim made by the assessee in the return filed, has some doubt about eligibility of such a claim and therefore, raises queries, extracts response from the assessee, thereafter in what manner such claim should be treated in the final order of assessment, is an issue on which the assessee would have no control whatsoever, therefore,that in a situation where the AO during scrutiny assessment, notices a claim of exemption, deduction or such like made by the assessee, having some prima facie doubt raises queries, asking the assessee to satisfy him with respect to such a claim and thereafter, does not make any addition in the final order of assessment, he can be stated to have formed an opinion whether or not in the final order he gives his reason for not making addition - If on the facts disclosed by the assessee, a wrong legal inference is taken by the AO at the time of original assessment then it would not confer any power on him u/s 147 to commence reassessment proceedings - in favour of assessee.

Treatment for Unabsorbed depreciation pertaining to A.Y. 1997-98 - allowed to be carried forward and set off after a period of eight years OR governed by Section 32 as amended by Finance Act 2001? - Held that:- Any unabsorbed depreciation available to an assessee on 1st day of April 2002 (A.Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001, thus once the Circular No.14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from A.Y.1997-98 upto the A.Y.2001-02 got carried forward to the assessment year 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act, 2001 and were available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever - writ petition allowed in favour of assessee.