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2015 (7) TMI 1030 - BOMBAY HIGH COURT

2015 (7) TMI 1030 - BOMBAY HIGH COURT - TMI - Reopening of assessment - Under invoicing of the exports and income arising out of mining is an illegal incomeHeld that:- The objection filed by the petitioner to the reasons recorded in support of the impugned notice, very categorically states that they do not hold any mining leases as they are only in the business of buying ores, processing it and exporting the processed iron ore. Thus, the second ground/ reason recorded in support of the notice vi .....

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ded in support of the reopening notice.

On such a fundamental lapse on the part of the Assessing Officer in disposing of the objections was pointed out to us, we expected the State-Revenue would withdraw the order and crave liberty to pass a fresh order dealing with the objections of the petitioner. Therefore, we decided to set aside the order of the Assessing Officer disposing of the objections to the impugned notice - Decided in favour of assessee for statistical purposes. - WRIT PE .....

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Act, 1961 (the Act). The impugned notice seeks to reopen the assessment for the Assessment Year 2008-2009. 3. The reasons recorded in support of the impugned notice dated 28/10/2014 for reopening of assessment are on the following two grounds : (i) Under invoicing of the exports on the basis of Justice M.B. Shah Commission's Report; and (ii) Income arising out of mining is an illegal income, in view of the Supreme Court order dated 21/04/2014 in Writ Petition C. No. 435/2012 which had held t .....

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ason recorded would not apply. This is so as they were only in the business of buying of Iron ore, processing it and exporting the processed Iron ore. Besides, various other contentions were also urged with regard to reopening not being sustainable on grounds of under invoicing of exports. 5. The Assessing Officer, by an order dated 20/02/2015, disposed of the petitioner's objections contained in the letter dated 09/02/2015. In the order dated 20/02/2015 disposing of the objections, the Asse .....

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nes & Minerals (Development and Regulation) Act [MMDR Act] vide The Mines & Minerals (Development and Regulation) Amendment Ordinance, 2015, dated 12/01/2015 and hence the decision of the Hon'ble Supreme Court is no more applicable. Moreover, you have stated that the Government of Goa has renewed a number of leases of the iron ore lessees with effect from 22.11.2007 for another 20 years. The facts pointed out by you need analysis and understanding of the entire scheme of the mining a .....

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n the aforesaid facts, we were of the view that the order dated 20/02/2015 of the Assessing Officer does not appear to be sustainable and may require reconsideration at the hands of the Assessing Officer. However, the same was opposed to by the Revenue and in support, reliance was placed upon an affidavit dated 06/05/2015 of the Deputy Commissioner of Income Tax, seeking to justify the order dated 20/02/2015 and in particular, paragraphs 8 and 10, which state as under : "8. I say that the a .....

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been dealt with and rejected vide speaking order dated 20/02/2015. I say that since the procedure adopted is completely legal, it is humbly prayed that the petition filed by the petitioner be dismissed with costs." 7. It is a settled position that reopening of assessment is not to be lightly done. In fact, it leads to unsettling settled positions. Therefore, it can only be done by the Revenue subject to strictly satisfying the jurisdictional requirement of Section 147 and 148 of the Act. It .....

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The Assessee would then have an opportunity to object to the reasons in support of the notice for reopening an assessment and the Assessing Officer on consideration of the objections would dispose of the objections by a speaking order. The above procedure is being consistently followed in all cases of notices issued under Section 148 of the Act seeking to reopen assessments. The procedure laid down by the Apex Court is a very salutary provision as it ensures that an Assessee is not dragged into .....

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ions. 8. In the present facts, we find that it has been the petitioner's case at all times (including during the assessment proceedings) and in its objections that it does not own any mining leases. It is purely in the business of purchasing iron ore, processing the same and exporting the processed iron ore. In fact, the reasons recorded in support of the impugned notice also commence by introducing the assessee as a Partnership Firm engaged in buying iron ore, processing the same and export .....

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ry, the order dated 20/02/2015 disposes of an imaginary objection, not taken by the petitioner, by a reasoned order. The least that is expected of Assessing officer while disposing of the objections filed by the Assessee is some application of mind to the objections raised by the Assessee and in that context, take a relook at the reasons recorded in support of the reopening notice. 9. On such a fundamental lapse on the part of the Assessing Officer in disposing of the objections was pointed out .....

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the impugned order indicates the attitude of the Revenue that right or wrong, the impugned notice for reopening is sustainable. The entire procedure laid down by the Apex Court to ensure that unwarranted reopening of assessments do not take place, is being frustrated by this attitude. The Officers of the Revenue should realise that they are not mere revenue collectors, but Officers administering the Act and in that process must ensure that not only the Assessee complies with the law but even the .....

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g of the objections to the impugned notice. However, looking at the manner in which the Assessing Officer has passed the order dated 20/02/2015 and also the affidavit dated 06/05/2015 filed in support of the order, we are of the view that the petitioner's objection would not be objectively dealt with by the Assessing Officer, who authored the order dated 20/02/2015 and the deponent of the affidavit dated 06/05/2015 resisting the petition. 10. However, before closing we may point out that the .....

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