9911796707
TMI Blog2006 (9) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessment year 1997-98. Writ Petition No. 1356 of 2006 pertains to the assessment year 1999-2000. Writ Petition No. 1357 pertains to the assessment year 2000-01 and Writ Petition No. 1358 pertains to the assessment year 2002-03. Since the reasons for reopening all these assessments are common, all these writ petitions are heard together and disposed of by this common judgment. The petitioner is a Hindu undivided family (hereinafter referred to as "the assessee" for short) and is assessed to tax since the year 1922. The assessee is carrying on the business of cotton ginning and pressing from its four factories located at Jalna Lasur, Deulgaon Raja and Kurduwadi in Maharashtra. The head office of the petitioner is situated at Bombay. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 1997-98, it is seen from the profit and loss account for the year ended March 31, 1997, the only income showed by the assessee for the assessment year 1997-98 from Mumbai office was dividend of Rs. 26,612 and interest of Rs. 35,544. As the assessee's claim ofloss of Rs. 4,14,046 on account of Mumbai office is not allowable, to that extent there was under assessment in this case. In the circumstances, if approved the provisions under section 147 may be invoked in this case and notice under section 148 may be issued for the assessment year 1997-98. The petitioner objected to the reopening of the assessments and pointed out that in the past the very same issue relating to the expenditure/loss at the Bombay office has been adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income-tax (Appeals) on October 4, 2004, wherein the disallowance of the expenditure incurred at the Bombay office made by the Assessing Officer in the assessment year 2001-02 has been deleted. Accordingly, Mr. Kaka submitted that in the absence of any material record and merely by way of change of opinion, the concluded assessments cannot be reopened and, therefore, the notices impugned in all these petitions are liable to be quashed and set aside. Mr. Shah, learned counsel appearing on behalf of the respondents, submitted that the impugned notices have been issued based on the assessment order passed in the assessment year 2001-02, wherein the expenditure incurred by the assessee at its Bombay office has been disallowed. The fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained. In the absence of any material or information which prima facie suggests that the income has escaped assessment, the action of the Assessing Officer in invoking the jurisdiction to reopen the assessment cannot be sustained. The material or the information relied upon by the Assessing Officer must be real and not vague or imaginary. In other words, the existence of some material or information to show prima facie that the income has escaped assessment is a must before reopening the assessment. In the present case, the facts established and accepted over the years are that the cotton ginning and pressing business of the assessee carried on at its factories located at four places in the State of Maharashtra are controlled and managed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty from the Bombay office. However, admittedly, the said disallowance made by the Assessing Officer in the assessment year 2001-02 has been set aside by the Commissioner of Income-tax (Appeals) on October 4, 2004. This fact was brought to the notice of the Assessing Officer, however, the same has not been accepted on the ground that the order of the Commissioner of Income-tax (Appeals) is subsequent to the date of the issuance of the notice under section 148 of the Act. In our opinion, the reasons recorded that there is "hardly any activity from the Bombay office" are totally vague and would neither constitute any material or information so as to form nexus or reason to believe that the income has escaped assessment. As stated earlier, for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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