TMI Blog2013 (8) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... ed:- 27-8-2012 - AKIL KURESHI AND HARSHA DEVANI MS. JJ. JUDGMENT The judgment of the court was delivered by Akil Kureshi J.-The petitioner has challenged the notice dated August 3, 2004, issued for the purpose of reopening assessment for the assessment year 2000-01. The petition arises in the following factual background : The petitioner is a company registered under the Companies Act and is regularly assessed to tax. For the assessment year 2000-01, the petitioner filed its original return of income on November 29, 2000, declaring a total income of Rs. 23,75,74,840. The return was selected for scrutiny. The Assessing Officer framed assessment under section 143(3) of the Act computing the total income of the assessee at Rs. 26,01,66,900. The petitioner carried the assessment order in appeal. With respect to such appeal and outcome thereof, we are not directly concerned in this proceeding. The Assessing Officer issued the impugned notice on August 3, 2004, seeking to reopen the assessment of the petitioner for the year 2000-01. At the request of the petitioner, reasons for reopening were supplied which read as under : "Reasons for reopening are as under : (1) The am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the Assessing Officer was under compulsion by the audit party to issue notice for reopening of assessment though she herself held a firm belief that no income had escaped assessment. In this context, our attention was drawn to the averments made in the petition, particularly, in paras. 2.8 and 3.3 thereof. Counsel also drew our attention to the reply statement of the respondent in which while replying to such paragraphs, according to him such averments were not specifically denied. 6.(2) Counsel relied on the decision of the Division Bench in the case of Adani Exports v. Deputy CIT (Assessments) reported in [1999] 240 ITR 224 (Guj), wherein it was held that the opinion of the audit party in regard to the income escaping assessment cannot be the basis of the Assessing Officer's firm opinion that income chargeable to tax had escaped assessment. In every case, the Assessing Officer must determine for himself what is the effect and consequence of the law mentioned in the audit note. On the other hand, learned counsel, Shri Parikh, for the Department opposed the petition contending that the Assessing Officer had recorded proper reasons before issuing notice. Such noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inclined to reopen the assessment holding a belief that grounds pointed out by the audit party were not sufficient. In the petition itself, it was stated as under : "2.8 It has come to the knowledge of the petitioner that the respondent has issued the impugned notice on the basis of remarks of the Accountant General (Audit). It has further come to the knowledge of the petitioner that the respondent has, as a matter of fact, not accepted the objections raised by the audit party and immediately, on receipt of the audit objections, raised counter-objections to the said audit remarks and informed the audit party that the view taken by her is correct in law as well as on facts and the said audit remarks are required to be dropped. 3.3 The petitioner submits that it has come to the knowledge of the petitioner that audit party has taken some objections and instructed the Assessing Officer to reopen the completed assessment and, therefore, the impugned notice came to be issued. It has further come to the knowledge of the petitioner that the respondent has, as a matter of fact, not accepted the objections taken by the audit party and asked them to withdraw the same. In other words, when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in order to give sufficient opportunity to the Revenue to contradict the petitioner's factual averments on the basis of the documents, we had previously requested learned counsel for the Revenue to make available the original files for the perusal of the court. After couple of opportunities since such files were not produced we had on July 16, 2012, passed the following order : "1. We had previously requested the learned counsel for the Revenue orally to make available the original files of the reassessment proceedings for our perusal. This was so on account of two allegations of the petitioner which remained substantially uncontroverted. The petitioner has been contending that the reasons for reopening of the assessment were not recorded by the Assessing Officer before issuance of notice. More importantly, the Assessing Officer issued notice only on the insistence of the audit party. 2. Previously, we had granted adjournments for this purpose. As a last chance, S. O. to July 30, 2012. If on such date, files are not produced, we may proceed to hear the matter on the basis of the documents on record." Even thereafter, this petition was adjourned on a couple of occasions. Today ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (page 230 of 240 ITR) : "In the present case, by scrupulously analysing the audit objection in great detail, the Assessing Officer has demonstrably shown to have held the belief prior to the issuance of notice as well as after the issuance of notice that the original assessment was not erroneous and so far as he was concerned, he did not believe at any time that income has escaped assessment on account of erroneous computation of benefit under section 80HHC. He has been consistent in his submission of his report to the superior officers. The mere fact that as a subordinate officer he added the suggestion that if his view is not accepted, remedial actions may be taken cannot be said to be belief held by him. He has no authority to surrender or abdicate his function to his superiors, nor the superiors can arrogate to themselves such authority." It was in this context extremely important for us to know whether recording of the reasons and consequent issuance of notice (even if it was in that sequence in the present case) was on the basis of an independent opinion of the Assessing Officer on the question of law and facts which may have been brought to her notice by the audit party ..... X X X X Extracts X X X X X X X X Extracts X X X X
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