TMI Blog2015 (8) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... d in favour of assessee. - Special Civil Application No. 3023 of 2015 - - - Dated:- 6-5-2015 - M. R. Shah And S. H. Vora, JJ. For the Petitioner : Mr Vivek Chavda for Mr Sn Divatia, Adv. For the Respondent : 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. That the petitioner filed return of income for AY 2010-11 on 5.10.2010 declaring total income of ₹ 6,63,27,750/-. That the said return of income was selected for scrutiny and the Assessing Officer completed the regular assessment under section 143(3) of the Act after issuing/sending detailed questionnaire with notice under section 142(1) and after considering the details submitted by the petitioner in response to the said notice. 2.1 That thereafter, the respondent has issued the impugned notice dated 13.8.2013 under section 148 of the Act fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Commissioner of Income-tax, Ahmedabad-IV vs. Shilp Gravures Ltd. reported in [2013] 40 taxmann.com 309 (Gujarat) as well as in the case of Rajrtan Metal Industries Ltd vs. Assistant Commissioner of Income Tax reported in [2014] 49 taxmann.com 15 (Gujarat), it is requested to allow the present Special Civil Application and quash and set aside the impugned reopening of the assessment for AY 2010-11. 4. Present petition is opposed by Shri Pranav G. Desai, learned Advocate appearing on behalf of the Revenue. He has heavily relied upon the affidavit in reply filed on behalf of the respondent. 4.1 Shri Desai, learned 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 depreciation at 30% is admissible on motor vehicles only if they a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party and/or the objection raised by the audit 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 petition. 5. Heard learned advocates appearing on behalf of respective parties at length. At the outset it is required to be noted that what is challenged in the present Special Civil Application is the impugned notice under section 148 of the Act by which the assessment for AY 2010-11 has been reopened. The reasons recorded for reopening of the assessment proceedings for the AY 2010-11 reads as under: The assessee firm had filed return of income of ₹ 6,63,27,750/- for AY 2010-11 on 5.10.2010. The case was selected for scrutiny and the assessment was completed u/s 143(3) of the IT Act with total income assessed at ₹ 7,88,27,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment proceedings is solely on the basis of the audit objection raised by the audit party and/or at the instance of the audit party only and/or whether there is any independent formation of opinion by the Assessing Officer that the income has escaped assessment, we called upon the Revenue to produce the relevant file/s and Shri Desai, learned Advocate appearing on behalf of the Revenue has produce the file/s before this Court for perusal. 5.3 From the file, 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 agreement of hiring of heavy earth moving machinery for excavation work with GMDC and Rajasthan Government and therefore, higher depreciation was eligible to the assessee. It appears from the file that the explanation given by the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be claimed. However, the case was reopened u/ 5.147 of the Act, to safeuards 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 protect the revenue and/or safeguards the interest of the revenue, it was proposed to reopen the assessment under section 147 of the Act. There is no independent formation of opinion by the Assessing Officer that the amount of ₹ 3,26,65,256/- has escaped assessment. The complete assessment has been reopened only at the instance of the audit party and/or on the audit objection raised by the audit party, which is not permissible. Therefore, in the facts and circumstances of the case, formation of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer and the higher authority it appears that though the Assessing Officer maintains that the audit objection raised by the audit party is not correct, however as the amount involved is very high as mentioned by the audit party and to safeguard the interest of the Revenue and the guidelines issued the reassessment proceedings have been initiated. Therefore, as such the formation 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. 5.8 Now, so far as the submission of Shri Desai, learned advocate appearing on behalf of the 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 noted that as such, the reassessment proceeding has been passed during the pendency of the present petition. Even otherwise, when the reopening of the assessment is found to be invalid and not justifiable and the same is solely based on the audit objection raised by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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