Income Tax Case

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.2801 OF 2019 Dentsu Aegis Network Marketing Solutions Pvt. Ltd., (Formerly, Carat Media Services India Pvt. Ltd.)6th floor, Poonam Chambers,Dr. Annie Besant Road,Worli, Mumbai 400 018PAN: AAACC6236F ...Petitioner vs.1. Assistant Commissioner of Income-Tax Circle- 6(2)(1), Mumbai,Room No.504, 5th Floor,Aayakar Bhavan, M. K. Road,Mumbai 400 020 2. Principal Commissioner of Income Tax- 6,Mumbai, Room No.504, 5th Floor,Aayakar Bhavan, M. K. Road,Mumbai 400 020 3. Union of Indiathrough the Secretary, Department of Revenue,Ministry of Finance, Government of India,North Block, New Delhi- 110 001 ...Respondents ---- Mr. Jitendra Jain i/b Mr. Atul K. Jasani for Petitioner.Mr. Suresh Kumar for Respondents. ---- CORAM : K. R. SHRIRAM AND AMIT B. BORKAR, JJ. DATE : 13 DECEMBER 2021. JUDGMENT : (Per Amit B. Borkar, J) Petitioner by way of present petition is challenging theissuance of notice dated 27[th] March 2019 under section 148 of Income TaxAct, 1961 (“the said Act” for brevity) for reopening the concluded regularassessment for Assessment Year 2012-13 and the order dated 18[th]September 2019 rejecting objections. 2. Petitioner is a company engaged in the business of mediaconsultancy and strategy through campaign organization, etc., by usingdata analysis. 3.On 30[th ]November 2012, Petitioner filed its return of incomefor Assessment Year 2012-13 returning a loss of Rs. 3,11,13,560/-. In thesaid return Petitioner gave details of unabsorbed depreciation andunabsorbed business loss from Assessment Year 2004-05 till 2010-11 whilearriving at the income. However, Petitioner was liable under MinimumAlternative Tax (MAT) for Rs. 28,98,428/- being tax payable under Section115JB on book profit of Rs.1,44,86,526/-, the said book profit was arrivedat by claiming set off of Rs.1,36,85,720/- being brought forward loss orunabsorbed depreciation, whichever is less. The amounts reduced to arriveat the book profit was duly disclosed in computing book profit. The income rsk was uploaded in the prescribed form ITR-6. In the said form, Petitionergave the details assessment year-wise of brought forward business loss andunabsorbed depreciation in Schedule BFLA and CFL. Petitioner alsodisclosed the working of book profit including specific disclosure ofRs.1,36,85,720/- under the head "Loss brought forward or unabsorbeddepreciation, whichever is less", in Schedule relating to MAT in the saidform. 4.The aforesaid return of income was selected for scrutinyassessment vide notice under Section 143(2) dated 3rd September 2013.During original assessment, Respondent No.1 asked queries videcommunications/notices dated 15[th ]September 2014 and 13[th] February2015, calling for details in support of the claims made by Petitioner.Petitioner vide letters dated 13[th] November 2014 and 27[th] February 2015furnished all the details called for. Petitioner filed its computation ofincome, audited accounts, tax audit report and enclosed a chart givingdetails of brought forward losses and depreciation along with the relevantorders for all the Assessment Years, i.e., Assessment Year 2004-05 to 2011-12. Respondent No.1 after going through the details filed during the courseof the original assessment proceedings passed an assessment order dated28[th] March 2016 under Section 143(3) of the said Act assessing income of Rs.1,39,41,070/-. 5.It needs to be noted that Respondent No.1 while passing theassessment order under Section 143(3) dated 28[th] March 2016 had notgranted any set off of brought forward business losses or unabsorbeddepreciation. Rs.1,39,41,070/-. 5.It needs to be noted that Respondent No.1 while passing theassessment order under Section 143(3) dated 28[th] March 2016 had notgranted any set off of brought forward business losses or unabsorbeddepreciation. 6.Almost 3 years later, Petitioner received a notice dated 27[th]March 2019 issued under Section 148 of the said Act for Assessment Year2012-13, whereby, Respondents sought to reopen the completed scrutinyassessment for Assessment Year 2012-13. On 17[th] April 2019, Petitionerrequested Respondent No.1 to furnish the reasons recorded for reopeningthe assessment. On 26[th] April 2019, Petitioner filed return of Income inresponse to notice under Section 148 of the said Act. On 10[th] May 2019,Petitioner was served with a letter dated 7[th] May 2019 giving extracts of thereasons recorded for reopening of the concluded assessment. Petitioner,vide its letter dated 23[th] July 2019, objected to the reopening of theconcluded assessment. Petitioner’s objections were rejected by an orderdated 18[th] September 2019. 7. Petitioner has therefore filed present petition challenging notice dated 27[th ]March 2019 issued under Section 148 of the said Act andorder dated 18[th ]September 2019 rejecting objections 8.Respondent No.1 has filed reply stating that there is failure onthe part of Petitioner to disclose truly and fairly all material facts. It isstated that in the original assessment, the Assessing Officer ignored appealorder for Assessment Year 2005-06 and had committed mistake whilegiving effect to computing of income under Section 115JB of the said Act.It is also stated that Petitioner has the alternate statutory remedy tochallenge the final order of assessment by way of Appeal. 9.We have heard Mr. Jitendra Jain and Mr. Suresh Kumar. forthe parties. With the assistance of learned Advocates for the parties, wehave scrutinized the record, and we find that the impugned notice has beenissued after four years from the end of the relevant Assessment Year.Section 147 of the said Act permits Respondent No.1 to reopen anassessment, provided he has reasons to believe that income has escapedassessment. However, the exercise of such power is circumscribed by thefirst proviso. It is now well settled that unless any income has escapedassessment by reason of failure on the part of the assessee to disclose fullyand truly all material facts necessary for assessment, the Assessing Officer has no jurisdiction for re-assessment. 10.The criteria for reopening of assessment after a period of fouryears are no longer res Integra in view of the judgment of this Court in thecase of Ananta landmark (P) Ltd. v/s. Dy. Commissioner of Income Tax[1]wherein this Court held that where assessment was not sought to bereopened on the reasonable belief that income had escaped assessment onaccount of failure of assessee to disclose truly and fully all material factsthat were necessary for computation of income but was a case whereinassessment was sought to be reopened on account of change of opinion ofAssessing Officer, the reopening was not justified. It is also held that whereprimary facts necessary for assessment are fully and truly disclosed, theAssessing Officer is not entitled to reopen the assessment on a change ofopinion. It is held that while considering the material on a record, one viewis conclusively taken by Assessing Officer, it would not be open for theAssessing Officer to reopen the assessment based on the very same materialand take another view. 11.Perusal of the reasons record by respondent No.1 indicates thatthe notice of reassessment proceeds on the basis of material which wasavailable during original assessment and is not based on fresh tangible1 (2021) 131 taxmann.com 52 (Bombay) rsk 11.Perusal of the reasons record by respondent No.1 indicates thatthe notice of reassessment proceeds on the basis of material which wasavailable during original assessment and is not based on fresh tangible1 (2021) 131 taxmann.com 52 (Bombay) rsk material received. The record indicates that a specific query was raisedduring original assessment and Petitioner had submitted details ofunabsorbed depreciation and business loss. Petitioner had disclosed thefigures of unabsorbed business loss and unabsorbed depreciation in ITRForm-6. Petitioner had also filed computation of income under provisionsof the said Act. Petitioner had also disclosed in Schedule relating to MAT inthe said Form giving details of working of book profit including specificdisclosures of Rs.1,36,85,720/- under the head "Loss brought forward orunabsorbed depreciation, whichever is less". From the reasons recorded byRespondent No.1, it appears that there was no tangible material forRespondent No.1 to conclude that income had escaped assessment. 12.For the aforesaid reasons the Assessing Officer has acted inexcess of the limit of his jurisdiction to reopen the assessment in theexercise of powers under Section 147 read with Section 148 of the said Act.Accordingly, Petitioner would be entitled to succeed in this proceeding. 13.We, therefore, pass the following order:- (i)The impugned notice dated 27[th ]March, 2019 (Exhibit"A") and the order dated 18[th] September, 2019 rejectingobjections (Exhibit "AF") issued by Respondent No.1 for Assessment Year 2012-13 are quashed and set aside; (ii)Rule made absolute in the above terms. (AMIT B. BORKAR, J) (K. R. SHRIRAM, J.)