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2016 (6) TMI 742 - GUJARAT HIGH COURT

2016 (6) TMI 742 - GUJARAT HIGH COURT - TMI - Reopening of assessment - period of limitation - Held that:- . In view of the provisions of Section 150 (1) and 150 (2), on the basis of which order came to be passed on 5.11.2008, limitation was over on 31.3.2008, therefore, Special Civil Application is required to be allowed in favour of assessee - SPECIAL CIVIL APPLICATION NO. 13999 of 2010 With SPECIAL CIVIL APPLICATION NO. 14009 of 2010 - Dated:- 9-6-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ .....

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scrutiny assessment and show cause notices were issued calling for explanations/details on several issues. The petitioner submitted such details and authorized representative of the petitioner attended the assessment proceedings, thereafter, assessment order was framed. Against such orders, the petitioner preferred appeals before CIT (A), which were partly allowed. Thereafter, the respondent issued impugned notice under Section 148 of the Act, reopening the assessment for both the Assessment Yea .....

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petitions before this Court. 3. Mr.Soparkar, learned Senior Advocate appearing for the petitioner submitted that no notice under Section 148 can be issued for reopening beyond six years from the end of the relevant assessment year and the only exception to this provision is contained in sub-section (2) of Section 150 of the Act. He further submitted that even this provision do not authorize the respondent to issue the notice for more than one reason. He submitted that for the Assessment Year 20 .....

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pies of invoices raised and the copy of final account of Tarak Chemicals Ltd. A notice u/s 133 (6) was issued to Tarak Chemicals Ltd. for furnishing the agreement along with details of valuation of knowhow in respect of fee received from the assessee. No response was received from the Tarak Chemicals P. Ltd. The Assessing Officer observed that no agreement has been executed between the assessee and Tarak Chemicals P. Ltd. and concluded that this is a colourable device to reduce the profit of the .....

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of the counsel and the facts of the case. The appellant has claimed depreciation on technical knowhow supposed to have been supplied by Tarak Chemicals. No information about the technical knowhow, how valuation was done, agreement with the supplier or competence of the supplier was submitted. Even Tarak Chemicals did not respond to the Assessing Officer's query. Tarak Chemicals was found to be associated enterprise. During appellate proceedings also a specific query has been raised as to the .....

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of technical knowhow. I, therefore, fully agree with the Assessing Officer that appellant has used this claim as a colourable devise to reduce its income. The purchase during the year may be ₹ 28.87 lacs but the appellant claimed depreciation to the extent of ₹ 46,91,710/- and therefore the Assessing Officer is justified in disallowing the claim of depreciation on nonexistent assets. While confirming the disallowance made by the Assessing Officer, he is directed to disallow the clai .....

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re-assess the income/recomputed loss depreciation/allowance for the said assessment year and I hereby require you to deliver to me within 30 days from the date of service of this notice, a return in the prescribed form of your income in respect of which you are assessable for the said assessment years. 5. He submitted that the period of limitation was over on 31.3.2008 while notice is given on 12.10.2009, therefore, Section 150 (2) will not come into operation. In this regard, he has relied upon .....

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96- 97 and 1997-98 are not saved from the rigors of the law of limitation, under the exclusionary provisions of Sections 150(1) and 153(3)(ii) of the Act, stated: "In this regard, it is important to note that these notices were issued to give effect to the directions contained in the revision order u/s 263 passed by the CIT on 12.7.2004 unlike Section 149 of the Act, there is no time limit u/s 150(1) that starts with non obstante clause and to that extent the observations of the Hon'ble .....

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the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision or by a Court in any proceeding under any other law. (2) The provisions of sub-section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referr .....

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n that recourse to reopening of the proceedings in terms of Sections 147 and 148 of the Act can be initiated at any point of time whatsoever. Such a proceeding can be initiated only within the period of limitation prescribed therefor as contained in Section 149 of the Act. Section 150 (1) of the Act is an exception to the aforementioned provision. It brings within its ambit only such cases where reopening of the proceedings may be necessary to comply with an order of the higher authority. For th .....

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the other hand, counsel for the respondent Mr.Parikh has also taken us through the notice dated 19.7.2010, reply to the notice and decision of the authority rejecting the contention of the assessee. He submitted that while passing the order dated 15.9.2010, it is observed in para 4 as under:- 4. The submission of the assessee which runs in 6 pages is too broad and general in nature in the facts of the case. The submission of the assessee has been duly considered but the same is not tenable in la .....

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