TMI Blog2005 (10) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... . C. DAGA J.-These petitions, filed under article 226 of the Constitution of India, are directed against the notices dated September 15, 2003, issued under section 148 of the Income-tax Act, 1961 (the "Act" for short), seeking to reopen completed assessments of the petitioner-assessee for the assessment years 1997-98 and 1998-99, along with the orders dated February 18,2005, passed by the Deputy Commissioner of Income-lax, Range 6(3), Mumbai, rejecting the objections taken by the petitioners to reopening their completed assessments. The parties to the petition are the same; the issue involved is identical; challenges to the impugned orders are common; so this common judgment shall dispose of both the petitions. The facts necessary to appreciate the rival contentions are taken from Writ Petition No. 619 of 2005, wherein the assessment year involved is 1998-99. The facts: The petitioners are a public limited company engaged in the business of manufacturing pharmaceutical products and other formulations. The return of income for the assessment year 1998-99 was filed on November 29, 1998. The last date of the assessment year was March 31, 1998. The assessment order was passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners, the period of 4 years commences on March 31, 2003, and as such the impugned notice issued under section 147 seeking to reopen for both the assessment years 1997-98 and 1998-99 is bad in law and without jurisdiction. Learned counsel further submits that the returns were subject to scrutiny and the assessment under section 143(3) as such notice under section 148(1) cannot be issued merely on change of opinion. No fresh facts have been brought on record to issue the notice in question, as such, the impugned notice issued under section 148 seeking to reopen the assessment for the year 1998-99 is without jurisdiction and bad in law. Learned counsel for the petitioners further submits that the approval granted by the Commissioner of Income-tax, Mumbai, suffers from non-application of mind. According to him, the approval was granted in a most casual manner. He placed reliance on the judgment of the Delhi High Court in the case of United Electrical Co. P. Ltd. v. CIT [2002] 258 ITR 317, wherein the Delhi High Court held that the power vested in the Commissioner under section 151 to grant or not to grant approval to the Assessing Officer to reopen an assessment is coupled with a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lever Ltd. v. R. B. Wadla1r, Asst. CIT (No.2) [2004] 268 ITR 339 (Born) ; (4) Grindwell Norton Ltd. v. Jagdish Prasad Jangid, Asst. CIT [2004] 267 ITR 673 (Born). Per contra : Learned counsel appearing for the Revenue submits that the notice under section 148 of the Act was issued after recording reasons for reopening of the assessment. He further submits that section 149(1)(b) empowers the respondents to reopen the assessment with the prior approval of the Commissioner of Income-tax under section 151(1) of the Act. He further submits that there was no evidence on record to show that IDS had been deducted after making payment under section 40(a) of the Act. He further submits that since the assessee had failed to make full and true disclosure of relevant material the assessment remained under section 147 of the Act. He further submits that the respondent applied the provisions of section 147 which empowers reopening of assessments completed under section 142(3) after recording reasons. The reasons recorded for re-opening the assessment were already furnished and, therefore, the action of the respondent was in accordance with law. He further submits that the reasons furnished we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spute that the return of income filed by the petitioner was accompanied by the audit report, profit and loss account and tax audit report under section 44AB of the Act. The record reveals that true and full information with respect to IDS from the payments made to various parties towards expenditure was disclosed in the return for IDS in Form No. 27 on June 22, 1998, which is produced on record at exhibit J along with challan at page 155. The details of the various parties and payments were enclosed to the return of income which clearly showed that all obligations with respect to IDS were properly complied with. The petitioner vide letter dated November 27, 1998, had also submitted the statement of TDS and certificate as such, according to the petitioners, the first reason pressed into service to reopen is unsustainable. So far as the second reason for issuing notice under section 148(1) with respect to valuation of closing stock with Modvat (excise and customs duty paid) is concerned, it may be noted that the inventory is required to be valued either at cost or market price whichever is lower. According to this principle, the assessee had valued its closing stock at cost. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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