TMI Blog2023 (6) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... COURT] as indicated above and the said reasons were recorded on the very same day and this itself is a circumstance which indicates that in a routine manner re-opening is sought by the authority which is impermissible. Thus action of issuance of notice under Section 148 of the Act in the background of present facts as erroneous, reflects no subjective satisfaction nor any application of mind. Hence, this would be one of the relevant circumstance to arrive at a conclusion that a case is made out by the petitioner to call for interference. As per Adani Power Rajasthan Limited [ 1998 (12) TMI 51 - GUJARAT HIGH COURT] and in view of the conclusion which is arrived at in Special Civil Application[supra] we hold that very exercise of jurisdiction by the authority gets vitiated. Decided in favour of assessee. - HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI AND HONOURABLE MR. JUSTICE J. C. DOSHI Appearance: For The Petitioner(S) No. 1 : Mr. B.S. Soparkar (6851) For The Respondent(S) No. 1 : Ms Maithili D Mehta (3206) ORAL ORDER (PER : HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI) 1. By way of this petition under Article 226 of the Constitution of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner and Ms. Maithili Mehta, learned advocate who represented the respondent authority. 4. Mr. B.S. Soparkar, learned advocate appearing for the petitioner has vehemently contended that the impugned notice as well as the order passed by the respondent authority are patently erroneous and in conflict with the fundamental rights of the petitioner under Articles 14, 19(1)(g) of the Constitution of India and hence, same are required to be quashed and set aside. It has been submitted that perusal of the reasons recorded, the main substantial reason is to the effect that income has escaped assessment since claim of CSR expenses made by the petitioner of Rs. 4,05,629/- was not allowable and as such, requires to be disallowed and to that extent, the income has escaped assessment and thus, according to learned advocate Mr. Soparkar, is fundamentally erroneous, since expenses are incurred voluntarily, wholly and exclusively for the purposes of business and therefore, there is no question of escapement of income from the assessment. 4.1. Learned advocate Mr. Soparkar has further contended that in view of explanation 2 attached to Section 37 of the Act, any expenditure incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that there is no new material came to the notice of the respondent authority, this action in the absence of any new tangible material is impermissible and as such, on this count alone, notice under Section 148 of the Act requires to be set aside. Further it has been pointed out that this re-opening sought to be initiated is on the basis of the information/objection provided by the audit party which in view of the settled legal position is also impermissible and for canvassing such submission, learned advocate Mr. Soparkar has made a reference to the decisions which are narrated in paragraph 3.7 of the petition and after contending this, a request is made to allow the petition by granting relief as prayed for. 5. As against this, Ms. Maithili Mehta, learned advocate appearing for the respondent has submitted that the action which is sought to be initiated is after due and proper application of mind and after going though the entire record and it is not open for the petitioner to contend that in the absence of any fresh material, no re-opening is permissible. In fact, the petitioner is not remediless since remedy of revision is very much available. It has further been contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n hand in the present proceedings. The said order is delivered by the co-ordinate Bench on 20.02.2023 after considering all the relevant circumstances, which were pointed out and following are the observations which are relevant to the issue, we deem it proper to quote hereunder :- 3.1 According to Mr.Soparkar, the two decisions of this Court cover the issue in 2013(37) Taxmann com 158 Vodafone West Ltd V/s Assistant Commissioner of Income Tax, this Court has held that the Assessing Officer, when had no reason to believe that the income had escaped the assessment and on the contrary, when his opinion is that there was inconsistent stand adopted by the audit on the identical ground, there is a notice for reopening at the instance of the Assessing Officer despite his unwillingness, the petition needs to succeed. He has also further argued that wherever audit party raising the objection may provide the information, however, eventually, it is the Assessing Officer who should be satisfied himself. Another decision of this Court in the case of Commissioner of Income-Tax, Ahmedabad-IV V/s Shilp Gravures Ltd, (2013)40 Taxmann.com 309 (Gujarat) is relied on. That was a case where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the petitioner who challenges it. If the petitioner is able to demonstrate that in fact the AO did not have any reason to believe or did not hold such belief in good faith or the belief which is projected in papers is not belief held by him; in fact, the exercise of authority conferred on such person would be ultra vires the provisions of law and would be abuse of such authority. As the aforesaid decision of the Supreme Court indicates that though audit objection may serve as information, the basis of which the ITO can act, ultimate action must depend directly and solely on the formation of belief by the ITO on his own where such information passed on to him by the audit that income has escaped assessment. In the present case, by scrupulously analysing the audit objection in great detail, the AO has demonstrably shown to have held the belief prior to the issuance of notice as well as after the issuance of notice that the original assessment was not erroneous and so far as he was concerned, he did not believe any any time that income has escaped assessment on account of erroneous computation of benefit under Section 80HHC. He has been consistent in his submission of his report to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot form the basis for the AO to reopen the closed assessment that too beyond four years from the end of relevant assessment year 8. As is amply made clear in the instant case from the discussion herein-above that the subjective satisfaction of the Assessing Officer for the purpose of reopening of the assessment is lacking in the instant case and, therefore, the Officer having the jurisdiction to issue notice on the belief that the income has escaped the assessment in fact had no belief while issuing notice and, therefore, as held in the case of Adani Exports Vs Dy CIT (supra) it was a colourable exercise of jurisdiction by the Assessing Officer by recording the reasons for which he obviously had no conviction, had initiated the reassessment proceedings solely at the instance of the audit party which cannot be sustained. 6.2. Further Mr. Soparkar has contended that by virtue of explanation 2 to Section 37 of the Act, any expenditure incurred on the activities relating to corporate social responsibility, referred in Section 135 of the Companies Act, 2013, is not to be treated as expenditure incurred for the purposes of business. 7. In the backdrop of the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X
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