TMI Blog2016 (12) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... with MRS SWATI SOPARKAR, ADVOCATE FOR THE RESPONDENT : MR MANISH BHATT, SR. ADVOCATE with MS MAUNA M BHATT, 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 assessee has prayed for an appropriate writ, direction and order to quash and set aside the impugned notice dated 28.03.2010 (wrongly typed as 20.03.2009) issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as IT Act ), by which the Assessing Officer has sought to reopen the assessment for AY 200607, in exercise of powers under Section 147 of the IT Act. [2.0] Facts leading to the present Special Civil Application in nutshell are as under: [2.1] That the assessee filed the return of income for the AY 200607 on 21.12.2006 declaring a total income of ₹ 6,18,63,815/. The case was selected for scrutiny and accordingly notice under Section 143(2) of the IT Act was issued and served upon the petitioner on 08.10.2007. That the assessee claimed the Security Transaction Tax (STT) rebate of ₹ 1,78,48,022/under Section 88E of the IT Act against the tax payabel under n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf of the petitioner assessee that it is evident from the information received under the Right to Information Act that even subsequently and after the issuance of the impugned notice, the Assessing Officer communicated and opined that the audit objection raised by the audit department is not acceptable and the same is required to be dropped. It is submitted that in the communication dated 30.11.2010 the Assessing Officer wrote a letter to the Deputy Accountant General, Rajkot that the audit objection is required to be dropped. It is submitted that therefore the Assessing Officer on the date of issuance of notice under Section 148 of the IT Act would not have formed a belief that any income has escaped assessment. Shri Soparkar, learned advocate appearing on behalf of the petitioner assessee has submitted that therefore the impugned notice and the reassessment proceedings for AY 200607 deserves to be quashed and set aside on the aforesaid ground alone. In support of his above submissions, he has heavily relied upon the decision of this Court in the case of Adani Exports vs. Deputy Commissioner of Income Tax (Assessments) reported in (1999) 240 ITR 224 . Shri Soparkar, learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case has been reopened. [4.2] It is further submitted by Shri Bhatt, learned Counsel appearing on behalf of the respondent Revenue that as such the correspondence with the audit party is the internal matter of the Department and does not form the basis of reasons of reopening of the assessment. It is submitted that reasons recorded by the Assessing Officer is the material which form the basis for reopening of the assessment and not the internal correspondence of the Department with the audit party. It is submitted that thus correspondence with the audit party is not to be considered as satisfaction recorded by the Assessing Officer. Making above submissions, it is requested to dismiss the present petition. [5.0] Heard learned Advocates appearing for respective parties at length. At the outset it is required to be noted that the assessment for the AY 2006-07 is sought to be reopened in exercise of powers under Section 147 of the IT Act. The reason recorded to reopen are as under: REASON FOR REOPENING A company filed its return of income for assessment year 200607 on 21.12.2006 declaring income of ₹ 618.64 lakh. The assessee company claimed STT (Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the taxable securities transactions entered into in the course of his business during that previous year: Provided that no deduction under this subsection shall be allowed unless the assessee furnishes along with the return of income, evidence of payment of securities transaction tax in the prescribed form The assessee company filed its return of income on 21/12/2006 declaring income of ₹ 61863815. The assessee company claimed Security Transaction Tax (STT) rebate of ₹ 17848022 against the tax payable under normal and paid the difference amount of ₹ 843945. The assessment was finalized u/s. 143(3) on 19/12/08 accepted the same income without making any addition. It was mandatory to submit Form No.10DB 10DC as per provisions of section 88E r.w. Rule 20AB during assessment to claim rebate for STT paid. Scrutiny of records revealed that the assessee did not submit it during assessment. Thus in view of provisions of section 88E r.w. Rule 20AB non submission of Form No.10DB 10DC during the assessment, the assessee would not entitle the assessee company for claiming rebate u/s.88E. Thus, there was irregular grant of rebate of ₹ 17848022 u/s.88E. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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