Itxa/879/2016 Of The Pr. Commissioner Of Income Tax-13 v. Popley Diamond And Gold Plaza Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 879 OF 2016 The Pr. Commissioner of Income Tax,City-13, Mumbai .. Appellant v/s. M/s. Popley Diamond & Gold Plaza Pvt. Ltd. .. Respondent Mr. Ashok Kotangle a/w Ms. Padma Divakar for the appellant Mr. Niraj Sheth I/b Atul Jasani for the respondent CORAM : AKIL KURESHI & M.S. SANKLECHA, J.J. P.C. DATED : 11[th] DECEMBER, 2018. 1.The Revenue is in appeal against the judgment of the Income TaxAppellate Tribunal (“the Tribunal” for short), dated 12.8.2015. 2.For the assessment year 2005-06, the Revenue has pressedfollowing question for our consideration :- “Whether on the facts and in the circumstances of the case andin law, the Tribunal was correct in cancelling the assessmentu/s 143(3) r.w.s. 147 of the I.T. Act for the year underconsideration, holding that notice u/s 148 was bad in lawwithout appreciating the fact that in this case no scrutiny assessment was done u/s 143(3) and that the reopening of thecase by way of issuance of notice u/s 148 of the Act was verymuch within the purview of law.” 3.The issue pertains to the validity of re-assessment proceedings.We notice that under similar circumstances the Revenue's appealconcerning the same assessee for earlier assessment year being IncomeTax Appeal No. 666 of 2016 came to be dismissed by this Court by anorder dated 04.12.2018. Following observations were made :- “3. The issue pertains to the Assessment Year 2002-2003 andconcerns the validity of notice of re-assessment issued by theAssessing Officer against the Respondent-Assessee. The Tribunalheld that the re-opening of assessment was invalid. In theimpugned judgment, the Tribunal observed inter-alia that theassessee had entered into a Lease Agreement with its sisterconcern for letting out premises for business purpose alongwithfurnitures, fixtures and equipments for the compensation ofRs.3,00,000/- per annum. The receipt was shown as businessincome since the Assessment Year 2000-2001. In the said year,the assessment had taken place and the assessee's claim wasaccepted by the Department. Once again in the AssessmentYear 2001-2002 the assessee had offered the receipt as businessincome, which was also accepted under scrutiny assessment.Notice for re-opening this assessment was issued which wasdeclared invalid by the Tribunal on the ground that there wasno failure on the part of assessee to disclose fully and truly allmaterial facts and that no new material or information hadcome into possession of the Assessing Officer after completion ofthe assessment. 4.Learned counsel for the Revenue may be correct inpointing out that in the present case the Tribunal ought not tohave invalidated the re-assessment on the ground of no failure of disclosure or that no new material was available with theAssessing Officer since the assessment was framed under Section143(1) of the Income Tax Act, 1961 ("the Tribunal" for short). 5.However, as noted the particular claim which theAssessing Officer wants to revisit through the re-assessmentproceedings, is not a new one. It was started by the assessee forthe first time in the Assessment Year 2000-2001 and wasaccepted by the Department. Without there being any otherchange, such issue could not have been re-issued in the presentassessment year, particularly when the claim was also acceptedafter scrutiny in the Assessment Year 2001-2002. 6.In the circumstances, it can be seen that the reason for re-opening the assessment lacks validity or in other words, theAssessing Officer did not have reason to believe that incomechargeable tax had escaped assessment.” 5.However, as noted the particular claim which theAssessing Officer wants to revisit through the re-assessmentproceedings, is not a new one. It was started by the assessee forthe first time in the Assessment Year 2000-2001 and wasaccepted by the Department. Without there being any otherchange, such issue could not have been re-issued in the presentassessment year, particularly when the claim was also acceptedafter scrutiny in the Assessment Year 2001-2002. 6.In the circumstances, it can be seen that the reason for re-opening the assessment lacks validity or in other words, theAssessing Officer did not have reason to believe that incomechargeable tax had escaped assessment.” 4.Learned Counsel for the assessee however, fairly pointed out thatin the present case, the reasons recorded by the Assessing Officercontending an additional element namely the assessee's claim ofdepreciation for which, according to the Assessing Officer, nosupporting documents were enclosed with the return, which requiredverification. The Courts have consistently held that re-assessmentcannot be resorted for a fishing inquiry. 5.In the result, the tax appeal is dismissed. (M.S. SANKLECHA, J.) (AKIL KURESHI, J.)