TMI Blog2011 (5) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... the predecessor on the issue and disallowing the same in its entirety - change of opinion on the same set of facts and cannot be permitted - writ petition is allowed - 3418 of 2010 - - - Dated:- 20-5-2011 - DOSHIT R. M., JYOTI SARAN, JJ. JUDGMENT Jyoti Saran J.- 1. Heard learned counsel appearing on behalf of the petitioner and the learned counsel appearing on behalf of the respondents. 2. With the consent of the parties, this matter has been taken up for disposal at the stage of admission itself. 3. The sole question which arises for consideration before this court is as to whether the impugned order of assessment passed by the respondent- Income-tax Officer in purported exercise of power vested under section 147 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), on the reasons recorded under section 148 of the Act and the revisional order passed under section 264 of the Act satisfies the parameters enabling such exercise. 4. Shorn of unnecessary details, the facts leading to the present application filed under article 226 of the Constitution of India is that the petitioner is engaged in a twin business of, (a) wholesale dealership of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment of the petitioner. "1. Payment of Rs. 6,85,149 received from I.O.C. Ltd. has not been credited in the profit and loss account filed along with the audited report, however, driver expenses amounting to Rs. 33,550 is being debited, 2. Income of tanker lorry is taken under section 44AE, however, the numbers of lorries are not mentioned, 3. Income from tanker is being added in the proprietor's capital account annually, however, the value of the tanker is not included in his capital account." 9. The petitioner responded to the notice, vide letter dated July 6, 2007 (annexure 8). 10. The notice under section 148 of the Act as contained in annexure 7 was followed by another direction as contained in letter dated August 31, 2007 (annexure 9) requiring the petitioner to appear before the assessing authority to respond to the reasons set out in the notice. The petitioner appeared through his representative, who also filed a written submission to the notice dated August 31, 2007, and which is placed as annexure 10 to the writ petition. 11. It was contended on behalf of the petitioner that as the tanker lorry business is a separate business under section 44AE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of either the vehicle or its drivers/cleaners, etc. In view of the explanation offered, I do not take this sum of Rs.33,500 shown as 'driver expense' as a genuine business expense and as such disallow this sum and add back in the income." 13. As according to the petitioner, the exercise of powers by the assessing authority was clearly beyond the scope and the intent of the provisions underlying section 148 of the Act, hence, he chose to challenge the said order on the question of jurisdiction by filing a revision under section 264 of the Act. The revision of the petitioner was dismissed by the Commissioner, Income-tax, vide order dated June 12, 2009, placed at annexure 15 to the writ petition. As no appeal lies against an order passed under section 264 of the Act either before the statutory authority under the Act or before this court under section 260A of the Act, hence, the present writ petition. 14. Learned counsel appearing on behalf of the petitioner, relying upon a number of judgments passed by the Supreme Court, submitted that a bare perusal of the order of reassessment, manifests that this is a case of mere change of opinion by the successor-in-office of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat undoubtedly, the principles for exercise of powers under section 148 of the Act stands well settled by a series of judgments passed by this court and the Supreme Court, but the exercise of such powers has to be examined in the back drop of each case and there is no strait jacket formula. He submits that the explanation to section 147 of the Act also takes notice of the nature of cases like the one in hand. He submits that in the present case, the notice under section 148 of the Act was issued after obtaining approval of the Commissioner of Income-tax which was granted on March 20, 2007. Learned counsel submitted that non-inclusion of the value of the tanker in the balance-sheet and debiting the amount against the driver's expenses were sufficient reasons for the exercise of powers under section 148 of the Act. He submits that this court would not enter into the issue of sufficiency of materials leading to exercise of powers under section 148 of the Act and the moment any material comes within the knowledge of the assessing authority, he is well within his jurisdiction to exercise powers vested in him under section 148 of the Act. 19. Learned counsel appearing on behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s carriage. It has been stated and not controverted that the rate of calculation of profits and gains from each goods carriage during the relevant assessment year was Rs. 2,000 each month or part of the month. Sub-section (3) further provides that any deduction allowable under the provision of sections 30 to 38 of the Act would be deemed to have been given effect to and no further deductions would be allowed except that where the assessee is a firm, the salary and interest paid to its partners shall be deducted subject to the conditions and limits provided under section 40(b) of the Act. Sub-section (4) further provides that the written down value of any asset used for the purpose of business shall be deemed to have been calculated as if it was claimed and allowed. Another provision which would be relevant for the present purpose would be found under section 69C which relates to unexplained expenditure during any financial year. 24. It is manifest from the notice issued under section 148 of the Act as contained in annexure 7 that the reasons recorded by the successor-in-office of the assessing authority raises three issues. 25. The assessing authority, passing the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the impugned order of the assessment manifests that the enhancement is sans any material, any document or any information in the possession of the assessing authority of a definite nature. On the contrary, the order itself shows that the same has been estimated on an inference being drawn presumptuously. Whether or not the assessee was noticed to explain the expenditure under section 69C of the Act at any stage, is nowhere discussed especially when the petitioner has been returning his income from the plying of oil tanker since past years. In the absence of these important prerequisites to an exercise of power under section 148/147 of the Act, the formation of belief by the assessing authority on an inference drawn by him does not satisfy the test of there being any definite material or information coming within his possession for drawing such a conclusion and cannot be upheld. 30. The second issue of enhancement is upon rejection of the claim of the petitioner towards the driver's expenses. I find from a perusal of the order of assessment passed under section 143 of the Act and placed at annexure 3 of the writ petition that the then assessing authority did take note of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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