Unilever India Exports Ltd v. The Deputy Director Of Income Tax1(3), Mumbai & Anr

Dmt IN THE HIGH COURT OF JDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTIONWRIT PETITION NO. 349 OF 2011 Unilever India Exports Ltd.,.. Petitioner. Vs. The Deputy Director of Income Tax1(3), Mumbai & Anr. .. Respondents. Mr. P.J. Pardiwala i/by Mulla & Mulla C.B. & C. for the Petitioner.Mr. Vimal Gupta for Respondents. CORAM : J.P. DEVADHAR AND A.A. SAYED, JJ. DATE : 19TH APRIL, 2011. P.C. 1.Heard. Rule. Rule returnable forthwith. By consent of the parties taken up for final hearing. This writ petition is filed challenging the notice under Section 148 of the Income Tax Act dated 26.11.2010 seeking to reopen the assessment for AY 2005-2006. 3.The reasons recorded for reopening the assessment for AY 2005-2006 reads thus :- “From the AIR information, it is seen that during the previous year relevant to A.Y. 2005-06, the assessee had purchased units of Mutual Fund of Rs. 77,19,84,263/- and sold units worth Rs. 65,33,123/- and offered short term capital gain. However, the assessee had shown units worth Rs. 5,62,15,000/- and Rs. 1,00,12,000/- under the head “Investments” as on 31/3/2005. Further, the assessee had not made any provision for diminution in value of investment on account of the above units. Thus, the assessee has not accounted for units amounting to Rs.5,54,54,140/-/ This has resulted in escapement of income chargeable to tax to the extent of Rs.5,54,54,140/- within the meaning of Section 147 of the I.T. Act, 1961. The relevant assessment year being A.Y.2005-06, the remedial action contemplated is before the expiry of four years from the end of the relevant assessment year. I have therefore reasons to believe that the income of Rs. 5,54,54,140/- has escaped assessment under the provisions of Income-tax Act, 1961 for the AY 2005-06 and accordingly it is a fit case for reopening u/s. 147 of the I.T. Act, 1961. Hence, the assessment for A.Y. 2005-06 is hereby re-opened. Issue notice u/s. 148 of the I.T. Act, 1961.” 4.The Petitioner by their letter dated 26.05.2010 objected to the reopening of the assessment. By the impugned order dated 22.11.2010 the objections raised by the assessee were rejected and thereafter reassessment order was passed on 26.11.2010. This petition is filed to challenge the order dated 22.11.2010 rejection the objections as also the reassessment order dated 26.11.2010. 5.A perusal of the order dated 22.11.2010 shows that the Assessing Officer has not dealt with the objections raised by the assessee vide their letter dated 26.5.2010. Similarly, the assessment order dated 26.11.2010 has been passed without hearing the petitioner. In these circumstances, in our opinion, it will be just and proper to quash and set aside the order dated 22.11.2010 as well as 26.11.2010 and direct the Assessing Officer to dispose of the objections raised by the petitioner afresh in accordance with law. 6.Accordingly, Rule is made absolute by quashing and setting aside the order dated 22.10.2010 as also the reassessment order dated 26.11.2010. The Assessing Officer is directed to pass a fresh order on the objections raised by the petitioner after giving a personal hearing to the petitioner as early as possible. 7.Rule is made absolute in the aforesaid terms. No order as to costs. ( A.A. SAYED, J. ) (J.P. DEVADHAR, J.)