Purti Parab v. Held As Under

Digitallysigned byPURTIPURTIPRASADPRASADPARAB IN THE HIGH COURT OF JUDICATURE AT BOMBAYPARABDate:2022.03.16ORDINARY ORIGINAL CIVIL JURISDICTION16:16:57+0530 WRIT PETITION NO. 880 OF 2015 Masina Alloys Pvt. Ltd. V/s. Deputy Commissioner of Income TaxRange 7(2)(1) and Anr. ….Petitioner …Respondents ---- Ms. Neha Paranjpe for Petitioner.Mr. Suresh Kumar for Respondents. ---- CORAM : K.R. SHRIRAM & N. J. JAMADAR, JJ. DATED : 11[th] MARCH, 2022 P.C. : 1. When the petition came to be admitted on 20[th] August, 2015, the court observed as under in paragraph no.3. 3. This petition challenges the Notice dated 25[th] March, 2014issued under Section 148 of the Income Tax Act, 1961seeking to reopen the assessment for the Assessment Year2009-10. The reasons in support of the impugned noticestates that information was received that share premium ofRs.10/- per share was received by the petitioner in the firstyear of its operation, when the intrinsic value of the sharewas of Rs.10/- per share. Prima facie we find that during thecourse of regular assessment proceedings a specific query wasmade with regard to the creditworthyness and identity of thepersons from whom the share premium amount wasreceived. This was responded to by the respondent-assessee.Thus, prima facie, the impugned notice appears to be basedon change of opinion. 2. We have also considered the petition and the documents annexed thereto and we are in agreement with the observations made by this court as quoted above. 3. 3.It is settled law that it is not necessary that the assessmentorder should contain reference and/or discussion to disclose its satisfactionin respect of the query raised. Once a query is raised during the assessmentproceedings and the assessee has replied to it, it follows that a query raisedwas a subject of consideration of the Assessing Officer while completing theassessment. This court in paragraph no.14 of Aroni Commercials Ltd. vs. 1 held as under : Deputy Commissioner of Income Tax 2(1)1 14) We find that during the assessment proceedings thepetitioner had by a letter dated 9 July 2010 pointed out thatthey were engaged in the business of financing trading andinvestment in shares and securities. Further, by a letter dated8 September 2010 during the course of assessmentproceedings on a specific query made by the Assessing Officer,the petitioner has disclosed in detail as to why its profit onsale of investments should not be taxed as business profits butcharged to tax under the head capital gain. In support of itscontention the petitioner had also relied upon CBDT CircularNo.4/2007 dated 15 June 2007. (The reasons for reopeningfurnished by the Assessing Officer also places reliance uponCBDT Circular dated 15 June 2007). It would therefore, benoticed that the very ground on which the notice dated 28March 2013 seeks to reopen the assessment for assessmentyear 2008-09 was considered by the Assessing Officer whileoriginally passing assessment order dated 12 October 2010.This by itself demonstrates the fact that notice dated 28March 2013 under Section 148 of the Act seeking to reopenassessment for A.Y. 2008-09 is based on mere change ofopinion. However, according to Mr. Chhotaray, learnedCounsel for the revenue the aforesaid issue now raised hasnot been considered earlier as the same is not referred to inthe assessment order dated 12 October 2010 passed for A.Y.2008-09. We are of the view that once a query is raisedduring the assessment proceedings and the assessee hasreplied to it, it follows that the query raised was a subject ofconsideration of the Assessing Officer while completing theassessment. It is not necessary that an assessment ordershould contain reference and/or discussion to disclose itssatisfaction in respect of the query raised. If an AssessingOfficer has to record the consideration bestowed by him on allissues raised by him during the assessment proceeding even 1 [2014] 44 taxmann.com 304 (Bombay) 1 [2014] 44 taxmann.com 304 (Bombay) where he is satisfied then it would be impossible for theAssessing Officer to complete all the assessments which arerequired to be scrutinized by him under Section 143(3) of theAct. Moreover, one must not forget that the manner in whichan assessment order is to be drafted is the sole domain of theAssessing Officer and it is not open to an assessee to insistthat the assessment order must record all the questions raisedand the satisfaction in respect thereof of the Assessing Officer.The only requirement is that the Assessing Officer ought tohave considered the objection now raised in the grounds forissuing notice under Section 148 of the Act, during theoriginal assessment proceedings. There can be no doubt in thepresent facts as evidenced by a letter dated 8 September 2012the very issue of taxability of sale of shares under the headcapital gain or the head profits and gains from business was asubject matter of consideration by the Assessing Officerduring the original assessment proceedings leading to anorder dated 12 October 2010. It would therefore, follow thatthe reopening of the assessment by impugned notice dated 28March 2013 is merely on the basis of change of opinion of theAssessing Officer from that held earlier during the course ofassessment proceeding leading to the order dated 12 October2010. This change of opinion does not constitute justificationand/or reasons to believe that income chargeable to tax hasescaped assessment. 4.In the circumstances, petition is allowed in terms of prayer clause – (a) which reads as under : (a)this Hon’ble Court may be pleased to issue a Writof Certiorari or a writ in the nature of Certiorari or anyother appropriate writ, order or direction under Article226 of the Constitution of India calling for the records ofthe Petitioner’s case and after examining the legality andvalidity thereof quash and set aside the notice dated 25[th]March 2014 (Exhibit “E”) issued under section 148 of theAct and the order dated 16[th] February, 2015 rejecting theobjections of the Petitioner (being Exhibit “J”) passed bythe Respondent No.1. 5.Petition disposed. (N. J. JAMADAR, J.) (K.R. SHRIRAM, J.)