TMI Blog2015 (5) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... easons stated, on the aforesaid ground alone and not on merits with respect to deemed dividend under Section 2(22)(e) of the Act and as it is found that condition precedent for assumption of jurisdiction under Section 147 of the Act are not satisfied, the impugned notice under Section 148 of the Act and consequently reassessment proceedings for AY 2007-08 are hereby quashed and set aside. - Decided in favour of assessee - SPECIAL CIVIL APPLICATION NO. 3862 of 2015 - - - Dated:- 7-5-2015 - MR.JUSTICE M.R. SHAH AND MR.JUSTICE S.H.VORA, JJ. MR B S SOPARKAR, ADVOCATE FOR THE PETITIONER MR SUDHIR M MEHTA, ADVOCATE , MRS MAUNA M BHATT, ADVOCATE FOR THE RESPONDENT 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 under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) dated 31.3.2014 (Annexure A to the petition), by which, the assessment for AY 200708 is reopened. 2.0. That the petitioner filed his returned of income for AY 2007-08 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e time of passing the original assessment order and during the original assessment proceedings, the AO did raise query related to Section 2(22)(e) of the Act and deemed dividend in the case of M/s. Vesta Exim Pvt. Ltd. It is submitted that during the relevant assessment year, the assessment of the petitionerM/ s. Jivraj Tea Limited and M/s. Vesta Exim Pvt. Ltd was with the same AO and the assessment orders in all these cases were also served on the same day. It is submitted that therefore, all the information was available and examined by the same individual and assessments were framed. It is submitted that therefore, it is not open to respondent no.2 to reopen the assessment of the petitioner after four years in the absence of any failure to disclose any material facts and merely for the recomputation taking different view on the same materials available with him. Making above submissions, it is requested to allow present Special Civil Application and grant the relief as prayed for. 4.0. Present petition is opposed by Ms. Mauna Bhatt, learned advocate for the revenue. An affidavit in reply is filed opposing the present petition. 4.1. It is vehemently submitted by Ms. Mauna B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truly and fully all material facts necessary for the assessment with respect to the additional depreciation claimed, initiation of reassessment proceedings beyond the period of 4 years is not permission and shall be wholly without jurisdiction. 5.2. Now, in the backdrop of the above legal provision, challenge to the impugned reassessment proceedings are required to be considered. 5.3. In the present case, reassessment proceedings under section 147 of the Act for A.Y. 200708 are initiated beyond the period of four years. The reasons recorded for reopening of the assessment for A.Y. 2007-2008, which are communicated to the petitioner assessee vide communication dated 8/7/2014 are as follows : Reasons for reopening of Assessment in the case of above mentioned assessee; The provisions of Section 2(22)(e) of the Act stipulate that any payment by a company not being a company in which the public are substantially interested by way of advance or loan shall be treated as deemed dividend if the following conditions are fulfilled: (c). Such payment of advance or loan is made to any equity shareholder possessing more than 10% of the voting right; OR (d). Such payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission to do so has resulted in under assessment of ₹ 4,85,93,639/as borne out from the assessment records of the assessee for AY 2007-08. It is also clear from the records pertaining to the relevant assessment year that the income thus chargeable to tax has escaped assessment for AY 200708 by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. After a detailed analysis and comprehension of the all the material information available on record and after due application of mind on all the facts, circumstances, statutory provisions and the position of law in this regard, I have reason to believe that the income of the assessee to the extent of ₹ 4,85,93,639/has escaped assessment within the meaning of Section 147 of the IT Act. Thus, it is a fit case for issue of notice under section 148 of the I.T. Act. 5.4. Considering the material on record, it cannot be said that there was any failure on the part of the assessee to disclose fully and truly all material facts necessary for that assessment year. Therefore, the condition precedent for assumption of jurisdiction for init ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial facts which were necessary for the purpose of computing the income of the assessee. Assuming that in the notice for reopening. such wordings are not specifically mentioned and they can be supplemented either while rejecting the objections or by way of affidavit of the Assessing Officer, then also, the revenue has failed to point out as to in what manner there has been nondisclosure on the part of the assessee. 27. From the ratio that can be culled out from all these decisions, it is amply clear that the Assessing Officer, who is authorized to issue notice under section 148 of the Act for reassessment. on his having a reason to believe that income chargeable to tax had escaped assessment for any assessment year, can assess or reassess such income and also any such other income chargeable to tax, which has escaped the assessment. However, no such action is permissible after lapse of 4 years from the end of the relevant assessment year unless income chargeable to tax has escaped assessment on account of failure on the part of the assessee to disclose fully and truly all material facts necessary for the purpose of such assessment. The onus is on the assessee to reveal the prima ..... X X X X Extracts X X X X X X X X Extracts X X X X
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