TMI Blog2016 (12) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned notice under Section 148 of the Act cannot be sustained. The decisions of this Court in the case of Raajratna Metal Industries Ltd ( 2014 (8) TMI 598 - GUJARAT HIGH COURT) and National Insurance Co (2015 (8) TMI 571 - GUJARAT HIGH COURT ) shall be squarely applicable to the facts of the case on hand. Under the circumstances on the aforesaid ground alone, the impugned notice deserves to be quashed and set aside. - Decided in favour of assessee - SPECIAL CIVIL APPLICATION NO. 5692 of 2006 - - - Dated:- 2-12-2016 - MR. M.R. SHAH AND MR. B.N. KARIA, JJ. FOR THE PETITONER : MR. S.N. SOPARKAR LD. SR. ADV WITH MRS SWATI SOPARKAR, ADVOCATE FOR THE RESPONDENT : MR NITIN K MEHTA, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0. By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for an appropriate writ, direction and order to quash and set aside the impugned notice issued under Section 148 of the Income Tax Act dated 03.09.2004, by which, the Assessing Officer has sought to reopen the assessment for AY 200001 under Section 147 of the Income Tax Act. 2.0. The facts leading to the present Spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th and no remedial action was called for on the merits of the case. 2.2. That after a period of approximately 18 months, Assessing Officer issued the impugned notice dated 03.09.2004 under Section 148 of the Act, reopening the assessment for AY 200001. That in reply to the aforesaid notice, the assessee vide letter dated 28.09.2004, asked the Assessing Officer to treat the original return filed as return filed in response to the notice under Section 148 of the Act. At the request of the assessee, Assessing Officer supplied the reasons recorded to reopen the assessment for AY 200001 vide communication dated 23.02.2005. The reasons recorded to reopen the assessment is as under: The reasons to believe that income chargeable to tax has escaped assessment: The power tariff of the assessee company was higher than the power tariff of the Gujarat Electricity Board (GEB). As a result of the agitation of the consumers of the assessee company, the Government of Gujarat asked the assessee company to charge the consumers at par with the rate of GEB and the Government of Gujarat agreed to reimburse the difference to the assessee company by way of subsidy. From the records, it is se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l as on merits. It is vehemently submitted by Shri Soparkar, learned counsel for the petitioner that as such impugned notice under Section 148 of the Act is not sustainable under law as the same is on the audit objection raised by the audit party only and that there is no independent opinion by the Assessing Officer income has escaped assessment. It is submitted that on the contrary after considering the material on record it was submitted by the assessee to the Additional Commissioner of Income Tax, Range 4Surat, communicated to the Commissioner of Income Tax, II, Surat that the objections raised by the Audit Party do not survive more so when there is no discrepancy in the accounting system of the assessee with regard to the accounting of subsidy. It is submitted that no remedial action was called for on the merits of the case. It is submitted that despite in the objections, it was specifically pointed out that solely relying upon the audit objection raised by the audit party and without any independent opinion formed by the AO that the income has escaped assessment, by disposing of the objection, the Assessing Officer has not deliberately not dealt with the same. 3.1. It is fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. It is submitted that therefore, the case on behalf of the assessee that amount of subsidy / repaid to the extent of ₹ 30.66 crores has been duly accounted for any gross receipt was required to be verified. It is submitted that on verification of the details filed along with submissions / objection it has been found that subsidy / repaid receivable is nowhere reflected in the balance sheet. It is submitted that therefore, reopening of the assessment for 200001 is just and proper. Making above submissions, it is requested to dismiss the present Special Civil Application. 5.0. Heard the learned advocates for the respective parties at length. At the outset, it is required to be noted that assessment for AY 200001 is reopened by impugned notice. From the reasons recorded, it appears that the assessment is reopened with respect to assessee received subsidy from the income during the previous year amounting to ₹ 30.66 crores on the ground that the said subsidy amount has not been distinctly shown in the profit and loss account of assessee company. However, it is required to be noted that according to the assessee reopening is solely 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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