TMI Blog2018 (2) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... is mind to the fact that the assessee had filed nil return of income and had accepted the same. Under the circumstances, the court is of the view that the reasons recorded for reopening the assessment reflect a mere change of opinion, inasmuch as, the Assessing Officer has already applied his mind to this aspect. Reopening of assessment being based upon a mere change of opinion. - Decided in favour of assessee - Special Civil Application No. 18138 of 2017 - - - Dated:- 31-1-2018 - MS. HARSHA DEVANI AND MR. A. S. SUPEHIA, JJ. For The Petitioner : Mr. Hardik v Vora, Advocate For The Respondent : Mrs Mauna M Bhatt, Advocate ORAL JUDGMENT ( PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. Rule. Mrs. Mauna Bhatt, learned senior standing counsel waives service of notice of rule on behalf of the respondent. 2. Having regard to the controversy involved in the present case and with the consent of the learned counsel for the respective parties, the matter was taken up for final hearing. 3. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 3.3.2017 issued by the respondent under section 148 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to be reopened on a mere change of opinion. It was further submitted that the income which is alleged to have escaped assessment, has been duly reflected in the return of income of the successor company and the tax has been paid on the same. It was submitted that the assessee is no longer in existence and ultimately, it is the successor company which would have to pay the amount of tax. It was submitted that, therefore, no income can be said to have escaped assessment, inasmuch as, the tax on the income in question has been duly paid. It was urged that, therefore, the proceedings would ultimately result into an exercise in futility and therefore also, the petition deserves to be allowed by setting aside the impugned notice. 5. Vehemently opposing the petition, Mrs. Mauna Bhatt, learned senior standing counsel for the respondent, invited the attention of the court to the reasons recorded, to submit that despite the fact that the assessee remained in existence till 30.6.2011, and had earned income during that period, it has not disclosed any income in the return of income. The Assessing Officer was, therefore, justified in forming the belief that the income chargeable to tax had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belief. It was submitted that therefore, what would be the outcome of the matter and the facts regarding the income having been taxed in the hands of the successor are not material at this stage. It was, accordingly, urged that on the reasons recorded, the Assessing Officer was wholly justified in forming the belief that income chargeable to tax had escaped assessment, and hence, the Assessing Officer has rightly assumed jurisdiction under section 147 of the Act. It was, accordingly, urged that the petition being devoid of merits, deserves to be dismissed. 6. This court has considered the submissions advanced by the learned counsel for the respective parties and has perused the record of the case as placed before the court. 7. Before adverting to the merits of the case, it may be germane to refer to the reasons recorded for reopening the assessment which read as under: In this case, the assessee had filed his Return of Income for A.Y. 2012-13 on 22.08.2012 declaring total income of Rs.NIL/-. Assessment have been completed and income was determined accepting return income vide order dated 07.07.2014. Scrutiny of balance sheet, P L Account, 3CD report and details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the scrutiny assessment came to be carried out, notice under section 142(1) of the Act along with detailed questionnaire was issued on 11.11.2013 and subsequently, due to change of incumbent, notice under section 142(1) read with section 129 of the Act was issued on 3.9.2014. The record further reveals that in response to the notice, the assessee submitted details and explanation vide a communication dated 18.12.2014 stating that the applicant firm M/s Giriraj Steel was converted into a Joint Stock Company with effect from 1.4.2011 on Going Concern basis under Part IX of Companies Act, 1956. Along with the letter, various documents have been submitted including the statement of profit and loss account of Giriraj Iron Ltd. for financial year 2011-12, highlighting the profit of Giriraj Steel upto 30.6.2011. In the submissions, it is further stated that from the documents submitted, it is clear that the firm is converted into a company with all assets and liabilities; profit earned by the firm is disclosed in the profit and loss account of the company. 10. In the backdrop of the aforesaid facts, if one looks at the return of income as described hereinabove, no income is declare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... called for an explanation or details in respect of such item and the assessee has furnished the explanation thereto, he is deemed to have applied his mind to the said issue. 12. Insofar as the decision of the Supreme Court in the case of Assistant Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers P. Ltd. (supra) is concerned, the same would not be applicable to the facts of the present case, inasmuch as, this court after considering the reasons recorded, has come to the conclusion that the same are based upon a mere change of opinion. The question as to whether or not at this stage there was sufficient ground for the Assessing Officer to form the requisite opinion is not in issue. Under the circumstances, the said decision also would not be applicable to the facts of the present case. 13. In the light of the above discussion, the court is of the view that the reopening of assessment being based upon a mere change of opinion, the assumption of jurisdiction on the part of the Assessing Officer lacks validity. The impugned notice issued under section 148 of the Act, therefore, cannot be sustained. 14. In the result, the petition succeeds and is, accordingly, allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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