TMI Blog2016 (12) TMI 1294X X X X Extracts X X X X X X X X Extracts X X X X ..... -2016 - S. C. Sharma And Rajeev Kumar Dubey, JJ. Mr. Sumit Nema, learned counsel for the petitioner Ms. Veena Mandlik, learned counsel for the respondents JUDGMENT The petitioner before this Court is a Company registered under the provisions of Companies Act, 1956, is aggrieved by order dated 13/05/2016 passed by the Assessing Officer, order dated 28/11/2016 rejecting the objections filed by the petitioner and also the notice dated 18/03/2016 issued under Section 148 of the Income Tax Act, 1961. 02- The petitioner's contention is that the petitioner's assessment for Assessment Year 2009-10 was completed under Section 143(3) of the Income Tax Act, 1961 on 22/02/2013 and a demand was raised to the tune of ₹ 1,36,120/-. The petitioner has further stated that during the assessment proceedings copy of audit report in respect of book of accounts was also brought to the notice of the Assessing Officer. 03- The petitioner has further stated that the petitioner has received a notice on 18/03/2016 under Section 148 issued by the Assessing Officer initiating reassessment proceedings for the Assessment Year 2009-10. The petitioner has further stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... half of the respondent No.1 and the respondent No.1 has stated that he has passed a detailed and speaking order on 28/11/2016 rejecting the objections raised by the petitioner for assessment under Section 148 of the Income Tax Act. It has also been stated that assessment proceedings under Section 147/148 have been initiated for the Assessment Year 2009-10 after recording the reasons in writing and after duly obtaining the prior approval of competent authority. 09- It has also been stated that notice under Section 148 of the Act was issued within the statutory time limit and was served to the assessee on 22/03/2016. It has been further stated by the respondent that during the course of assessment under Section 143(3) the assessee was never asked for providing the details or explanation shown in the reasons recorded under Section 148(2) for reopening the case. It has been further stated that assessee has explained only about computation of book profit under Section 115JB in reply but did not informed about the submission of Form No.56-F for claiming exemption under Section 10AA. 10- It has been further stated no document was found or asked for submission of the notice of Audito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 reveals that your auditors have mentioned clearly that During the year, the company also decided to expand its operations and enter the field of re manufacturing of engines and sub-assemblies from the existing core business. This would be a new division of the company named PSMI (Parts and Service Manufacturing India). The PSMI division would have manufacturing facilities at two places, viz, for its domestic requirement at Pune and for its export requirements at SEZ Pithampur. As on financial year ended March 31, 2009, operations were not commenced but during the year, the Company has changed its estimate of providing for slow/non moving inventory as a result of which profit before tax and inventory is lower by ₹ 2,94,03,474/-. You did not disclose its income in your return of income and therefore, the same is remained unexplained which is escaped assessment amounting to ₹ 2,94,03,474/-. 2. Further, you have deducted an amount of ₹ 6,67,37,928/- in item No.5B of schedule MAT. It is noticed that report u/s 10AA in form 56F was not filed by you and also details/calculation sheet for exemption u/s 10AA was not filed. You had stated during the original asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48 of I. T. Act, 1961 to reopen the assessment order passed u/s 143(3) for A. Y. 2009-10, dated 22.03.2013. Assessment of the case for AY 2009-10 has been reopened U/s 147/148 by this office after recording reasons in writing and duly obtaining prior approval of Principle Commissioner of Income-tax, Ujjain vide his office letter dated 17.03.2016. Notice U/s 148 was issued within the statutory time limit and duly received by the assessee on 22.03.2016. You have filed objections for reopening the assessment vide letter dt. 18.04.2016. In the said letter, you were stated that return of income in response to notice u/s 148 is filed under protest and asked to provide reasons recorded for reopening proceedings. An objection was also filed challenging the reopening proceedings u/s 147 on a mere change of opinion, which does not entitle the Assessing Officer to reopen the assessment u/s 148. On 13.05.2016, objections raised by you were rejected along with providing reasons recorded for reopening proceedings and case fixed on 25.05.2016 at 3:00 PM. On the said date request for adjournment was submitted and on 25.11.2016, the assessee again objected the reopening proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated March 18, 2016. Hence, we humbly submit that extended time period for reopening cannot be invoked for non filing of return. 5. Thus the assessment for AY 2009-10 can be reopened only if we have failed to disclose all material facts necessary for assessment. 6. With reference to point 4 and 5 of your goodself's notice, we submit that we had submitted Form 56F to the assessing officer on September 30, 2009 (copy of letter enclosed as Annexure 2). We further invite your goodself's attention to question number 26 of AO's letter dated September 10, 2012 and our response to the same dated September 19, 2012 (enclosed as Annexure 3) wherein we have provided the details of income and expenditure claimed under Section 10AA. Further your goodself's reference to clauses of Tax Audit Report is evidence to fact that company had submitted all required information during assessment proceedings and has not withheld any material fact. During the Financial Year 2008-09, the Company's Auditor disclosed under Significant Accounting Policies of the Financial Statement under Schedule 17 at Point No.3 as under: During the year, the Company has changed its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court in ACI Oils (P.) Ltd. v. Dy. CIT [2015] 370 ITR 561/57 taxmann.com 260 (All.), which is fully applicable in the present case. [CIT v. Jubilant Organosys Ltd. [2016] 65 taxmann.com 196 (Allahabad)] 3) The Bombay High Court in Godrej Industries Ltd. v. DCIT Circle 14(1)(2) [2015] 232 Taxman 380 (Bombay) has laid that Once the assessment is sought to be reopened after a period of four years, then, the proviso mandates recording that the assessee has failed to fully and truly disclose all materials facts necessary for the assessment for the relevant assessment year. There is absolutely nothing which would enable us to conclude that the assessee had failed to make such disclosure even prima facie. If the issue which has been raised and regarding which the assessment is proposed to be reopened has been dealth with, then, had the assessee not provided materials and completely, it would not be possible for the authorities under the Act to deal with those issues, discuss them while passing the assesment order and appellate orders. In the circumstances, we do not find that the impugned notice can be sustained. Once we have arrived at this conclusion and on all counts, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Nos.1 to 5, you're invited attention towards the proviso of section 147 of the Income Tax Act which states that beyond expiry of four years an assessment proceedings can only be reopened if the assessee has failed to furnish any return of income or not disclosed fully and truly all material facts of the reassessment year in response to notice under section 142(1)/143(2). The objection is rejected on the facts available on record that during the course of assessment proceedings u/s 143(3) of the Act, the assessee was never asked for providing the following details or explanation: a) In the audit report of the Company at point No.3 of the Notes to the Accounts for the A.Y.2009-10 reveals that your auditors have mentioned clearly that The company has changed its estimated of providing for slow/non moving inventory as a result of which profit before tax and inventory is lower by ₹ 2,94,03,474/-. You did not disclose its income in your return of income and therefore, the same is remained un explained which is escaped assessment amounting to ₹ 2,94,03,474/-. b) Further, you have been deducted an amount of ₹ 6,67,37,928/- in item NO. 5B of schedule M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave relied on various case laws of honourable courts. On careful consideration of all these judgments, it has been found that the facts of the your case and the facts of the judgments relied by you are different therefore, on the basis of such decided cases, you are not entitled to get relief from the reopening proceedings. Therefore, this objection is also not tenable and hereby rejected. In view of the above discussion, the objection raised by you for reopening the case for AY 2009-10 is hereby rejected. You are hereby required to submit the reply of the show cause letter sent by this office vide letter No. 582 dated 13.05.2016 on 05.12.2016. at 11:00 AM to this office. This letter may be treated as notice u/s 142(1) of the I. T. Act, 1961. Yours faithfully, (J. S. Rao) Asstt. Commissioner of Income-Tax Circle-1(1), Ujjain 14- In the considered opinion of this Court, the order passed by the Assessing Officer makes it very clear that the assessee has failed to disclose fully and truly all materials facts at the time assessment proceedings initiated under Section 143(3). Not only this, Section 149 which provides for time limit of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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