TMI Blog2011 (9) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner Kamal Sawhney, Adv. for the Revenue JUDGMENT Sanjiv Khanna, J 1. The petitioner-Minda HUF Limited has challenged reassessment proceedings under Section 147/148 of the Income Tax Act, 1961(Act, for short) initiated vide notice dated 18th April, 2007 for the assessment year 2003-04. They have also prayed for quashing of the order dated 15th October, 2007 passed by the Assessing Officer, the respondent No. 2 herein rejecting the objections raised by the petitioner to the reassessment proceedings and holding that they were valid grounds for initiation of reassessment. 2. For the assessment year 2003-04, the petitioner had filed their return on 2nd December, 2003 and an assessment order under Section 143(3) was passed on 28th March, 2006. The taxable income was enhanced from Rs.2,78,95,579/- as declared in the original return to Rs.3,18,14,069/- in the assessment order dated 28th March, 2006. We are not concerned with the additions made, which were later on made subject matter of appellate proceedings. 3. After reassessment notice under Section 147/148 of the Act dated 18th April, 2007 was served, the petitioner filed the same return as was originally filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is not accepted on the reasons given below- If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Reference in this regard may be made to Explanation 2(c)(i) and (iv) u/s 147 of the I.T. Act i.e. Explanation 2,-For the(sic) purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely:- (c) where an assessment has been made, but- (i) Income chargeable to tax has been under-assessed; or (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed. Further, the contention raised that details of royalty paid, proo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no. 2. The said reason was merely a suspicion without any material and had no foundation or prima facie basis. 10. The petitioner had further stated that the aspect of bad and doubtful debts was examined during the course of the original assessment proceedings and the then Assessing Officer was informed that this amount had been added back and accordingly the Assessing Officer had agreed. It may be noted that in the original assessment proceedings an addition of Rs.7,41,240/- was made on account of bad debts written off. 11. Original records maintained by the Revenue have been produced before us. The original order sheet of the Assessing Officer is missing and not available. The original assessment records are scanty and almost anything relevant is not available. The return, tax audit report including/encloses thereto, one notice under Section 142(1) and two notices under Section 143(2), in addition to the assessment order, are the only papers/documents available. What happened to the other papers is not stated and no answer is forthcoming from the Revenue. 12. With regard to royalty payment, the petitioner had stated in the objections that during the course of original asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce was placed on case laws. 13. During the hearing of the writ petition because of this controversy, the respondents were asked to produce their original record. In the order dated 22nd September, 2008 it is recorded as under:- "WP(C) No. 8273/2007 The learned counsel for the petitioner seeks time to examine the record with regard to the aspect as to whether the petitioner had filed the note on royalty which is at page 45 of the paper book during the course of original assessment proceedings. This would be material because according to the learned counsel for the petitioner, the Assessing Officer had examined this issue in detail and then made the assessment order. The assessment is sought to be reopened on the ground that payment of royalty was in the nature of 'capital expenditure' and not 'revenue expenditure' and that this 'fact' had escaped assessment. The revenue shall produce the original record on the next date also. Interim orders to continue. Renotify on 03.11.2008. CM No. 17313/2007 in WP (C) No. 8273/2007 Renotify on 03.11.2008" 14. Thereafter in the order dated 3rd November, 2008 it is mentioned that the petitioner, after conducting inspection of the reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order of 28th March, 2006 was passed. Thereafter, the order rejecting the objections was passed on 15th October, 2007. In the objections the petitioner had referred to the reply filed during the course of the original assessment proceedings. Nothing prevented the Assessing Officer from examining the said aspect and stating that no reply was filed by the petitioner in the course of the original assessment proceedings. The new Assessing Officer could have also asked and verified facts from the earlier Assessing Officer who had passed the original assessment order, as the documents/papers were missing. On the other hand, a cryptic order was passed without specifically dealing with the said contention and fact stated by the petitioner. 17. In view of the aforesaid discussion, the present writ petition is allowed and Writ of Certiorari is issued quashing the notice under Section 147/148 of the Act dated 18th April, 2007 and the order dated 15th October, 2007 rejecting the petitioner's objections. It is held that the reasons recorded show only a change of opinion and, therefore, the reassessment proceedings are not valid. There will be no order as to costs. - - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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