GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (8) TMI 571 - GUJARAT HIGH COURT

2015 (8) TMI 571 - GUJARAT HIGH COURT - TMI - Reopening of assessment - reliance on Audit report - Held that:- In a case like this where even while sending the proposal to the higher authority to grant the approval for initiation of the reassessment proceedings, the Assessing Officer still maintain that audit objection raised by the audit party is not valid and/or correct. Therefore, as such it cannot be said that the Assessing Officer had independently formed an opinion and/or had reason to bel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rmation of the opinion by the Assessing Officer that the income chargeable to tax has escaped assessment has been vitiated and therefore, the impugned reopening of the assessment cannot be sustained and the same deserves to be quashed and set aside.

Now, so far as the submission of revenue that as now, the order of assessment/reassessment under section 143(3) r/w section 147 has been passed and therefore, the present petition may not be entertained is concerned, it is required to be n .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

J. For the Appellant : Mr Vivek Chavda For Mr Sn Divatia, Adv. For the Respondents : Mr Pranav G Desai, Adv. JUDGMENT ( Per : Honourable Mr. Justice M. R. Shah ) 1. By way of this petition under Article 226 of the Constitution of India to quash and set aside the impugned notice dated 13.8.2013 (Annexure A) issued by the respondent under section 148 of the Income Tax Act (for short "the Act") to reopen the original assessment for AY 2010-11 as well as the order of reassessment passed. 2 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed notice dated 13.8.2013 under section 148 of the Act for AY 2010-11 to reassess the total income. That in response to the said notice, the petitioner vide letter dated 16.6.2014 requested the Assessing Officer to treat the original return filed on 15.10.2010 as in response to the impugned notice under section 148 of the Act and also supplied copy of reasons recorded for reassessment. 2.2 That thereafter, the Assessing Officer supplied to the petitioner - assessee copy of reasons recorded. That .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fficer has passed the order of assessment under section 143(3) of the Act read with section 147 of the Act, the petitioner has also challenged the impugned order of assessment also. 3. Shri Vivek Chavda, for Shri SN Divetia, learned Advocate appearing on behalf of the petitioner has vehemently submitted that the reopening of the assessment for AY 2010-11 is solely on the basis of the audit objection and/or the audit objection by the audit party and therefore, the same is not permissible. It is s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

while disposing off the objections has not dealt with the same at all. 3.2 It is further submitted that even in the present Special Civil Application though the petitioner has raised the specific ground on the aforesaid, in the affidavit in reply, the respondent has not dealt with the same. Making above submissions and relying upon the decision of the Division Bench in the case of Commissioner of Income-tax, Ahmedabad-IV vs. Shilp Gravures Ltd. reported in [2013] 40 taxmann.com 309 (Gujarat) as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed advocate appearing on behalf of the Revenue has vehemently submitted that the impugned reopening proceedings to reopen the assessment for AY 2010- 11 is absolutely just and proper and in consonance with Section 147 of the Act. It is vehemently submitted that in the present case, after forming an independent opinion though the petitioner was entitled for normal rate of depreciation i.e. 15%, the petitioner availed the higher rate of depreciation at 30%. It is submitted that the higher rate of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and has rightly issued notice under section 148 of the Act. 4.2 It is further submitted by Shri Desai, learned advocate appearing on behalf of the revenue that now when the reassessment order is already passed under section 143(3) r/w section 147 of the Act, it is requested not to entertain the present petition and relegate the petitioner to avail the remedy by way of appeal before the learned CIT (Appeals) and if aggrieved, in that case, before the learned Tribunal. 4.3 Relying upon para 6 of t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s is not a case where the assessment is reopened solely at the instance of the audit party and/or audit objection raised by the audit party. It is submitted that therefore the decisions upon which the reliance has been placed by the learned advocate appearing on behalf of the petitioner shall not be applicable to the facts of the case on hand and/or shall not be of any assistance to the petitioner. 4.4 Relying upon the decision of the Hon ble Supreme Court in the case of Commissioner of Income T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

udit party, reopening of the assessment is permissible. It is submitted that therefore even in case where the assessment is reopened on the basis of the objection raised by the audit party and on the information received by the Assessing Officer pursuant to the audit memo and/or the objections raised by the audit party, after forming an opinion, the reopening of assessment proceedings is permissible. Making above submissions and relying upon above decisions it is requested to dismiss the present .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

15.10.2010. The case was selected for scrutiny and the assessment was completed u/s 143(3) of the IT Act with total income assessed at ₹ 8,47,28,610/-. The assessee firm is engaged in the business of construction and mining contractor. For the AY 2010-11, the assessee firm has claimed depreciation @ 30% on dumpers, lorries etc. amounting to ₹ 6,12,33,988/-, the assessee firm is primarily a contractor and income received is towards civil works executed & from contract works. The .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ent. Consequently, an amount of ₹ 3,06,16,999/- (depreciation being restricted to 15% as against 30% as claimed) has escaped assessment." 5.1 The aforesaid reopening of the assessment/reassessment proceedings has been challenged mainly on the ground that the reopening of the assessment is solely on the basis of the objection raised by the audit party and/or audit objection and the formation of the opinion by the Assessing Officer that the income of ₹ 3,06,16,999/- has escaped as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not been dealt with in the affidavit in reply. In the affidavit in reply it is the case on behalf of the Revenue that while recording the reasons for reopening of the assessment and/or while reopening of the assessment for AY 2010-11, the Assessing Officer has formed an opinion that the income of ₹ 3,06,16,999/- had escaped assessment. However, nothing has been mentioned with respect to any objections raised by the audit party and/or any audit objection. Be that as it may, to satisfy ours .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, it appears that the case was audited by the revenue audit party. The audit party issued LAR 2497, para 3. It also appears that the same was sent to the Assessing Officer and Asst. Commissioner of Income Tax, Gandhidham and audit objection was brought to the notice of the Assessing Officer. However, the Asst. Commissioner of Income Tax, Gandhidham raised objection against audit objection and justified his action of allowing the depreciation at 30% by submitting that the assessee had executed ag .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cases under section 147 of the Act may be initiated, in the prescribed manner in view of the CBDT instructions on the matter. From the file, it appears that thereafter, the Deputy Commissioner of Income Tax sent a report in the prescribed proforma to the Commissioner of Income Tax so as to reopen the assessment under section 147 of the Act. Even the proforma report on the draft audit para No.1 LAR 2497, the Deputy Commissioner of Income Tax continued to maintain that audit pointed out are not ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er has stated as under: "(i)Assessee-firm is engaged in the business of providing equipments, motor Vehicles on hire, the same fact has been duly stated by the auditors in form No.3CD. Further, the claim of the assessee is also supported by Circular No.652 dated 14.06.1993. Since, the basic nature of the business of the assessee itself is providing equipments and motor vehicles on hire, hirer rate of depreciation is admissible. ii) The fact that the nature of business is that of HIRING OF E .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nce the vehicles are established as having been given on hire, the higher Claim of depreciation can be claimed. However, the case was reopened u/s 147 of the Act, to safeguards of the revenue." 5.5 From the aforesaid, it appears that even while sending the proposal/proforma report to the higher authority to grant approval for reopening the assessment, the Assessing Officer continued to maintain that the audit objection raised by the audit party is not acceptable and only with a view to prot .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f opinion by the Assessing Officer while reopening the completed assessment and his reason to believe that the income as escaped assessment has been vitiated and therefore, reopening assessment proceedings for AY 2010-11 is not valid and permissible. 5.6 In the case of Shilp Gravures Ltd. (Supra) after considering the decision of the Division Bench of this Court in the case of Adani Exports v. Dy. CIT reported in [1999] 240 ITR 224 (Guj.) and the decision of the Division Bench of this Court in t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d upon the decision of the Hon ble Supreme Court in the case of P.V.S. Beedies Pvt. Ltd. (Supra) and the decision of the Division Bench of this Court in the case of N.K. Industries Ltd. (Supra) by Shri Desai, learned Advocate appearing on behalf of the Revenue is concerned, it is true that the information given by the audit party and/or on the audit objection, can be used for the purpose of reopening of the assessment. However, for that there must be formation of the opinion by the Assessing Off .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

onsidering the audit objection and may form an independent opinion and/or may have a reason to believe independently that the income chargeable to tax has escaped assessment. However, in a case like this where even while sending the proposal to the higher authority to grant the approval for initiation of the reassessment proceedings, the Assessing Officer still maintain that audit objection raised by the audit party is not valid and/or correct. Therefore, as such it cannot be said that the Asses .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version