Wp/12914/2018 Of The Ugar Sugar Works Ltd v. The Assistant Commisioner Of Income Tax And Ors

IN THE HIGH COURT OF JUDICATURE AT BOMBAYAPPELLATE SIDE CIVIL JURISDICTION WRIT PETITION NO.12914 OF 2018 The Ugar Sugar Works Ltd., ..Petitioner.v/s.The Asst. Commissioner of Income TaxCricle-2, Sangli & Others ..Respondents. Mr. Riyaz Padvekar with Mr. Tanzil Padvekar i/b. Dave & PadvekarAssociates, for the Petitioner.Mr. Sham Walve, for the Respondents. P.C:- CORAM: AKIL KURESHI & M.S.SANKLECHA, JJ.DATE : 18[th] JANUARY, 2019. Petitioner has challenged a notice of re-opening of anAssessment dated 26[th] March, 2018, is annexure 'A' to the Petition. Thischallenge, arising in the following back-ground:- (a)Petitioner is a company registered under the Companies Act. For theAssessment Year 2011-12, Petitioner had filed return of income, which was taken in scrutiny by the Assessing Officer who passed an order of Assessing under Section 143(3) of the Act on 28[th] March, 2018;Assessment Year 2011-12, Petitioner had filed return of income, which was taken in scrutiny by the Assessing Officer who passed an order of Assessing under Section 143(3) of the Act on 28[th] March, 2018; (b)To re-open such Assessment, Assessing Officer has issued impugned notice. In order to do so, he recorded following reasons:-notice. In order to do so, he recorded following reasons:- “On perusal of the case records for the A.Y. 2011-12, it isseen that as per financial statement of the assessee (72[nd] annualreport of F.Y. 2010-11 relevant to A. Y. 2011-12) profit beforetax of assessee is Rs.385.45 lakhs and net profit is Rs.401.57lakhs. However, in assessment order u/s. 143(3) of the I.T. Actdated 28.03.2014 for the A.Y. 2011-12, book profit has beenassessed as (-) Rs.41,58,410/-, it is also seen that additionshave been done on similar issue in A.Y. 2012-13 in whichassessee's appeal has been dismissed by Ld. CIT(A). I, therefore, have reason to believe that book profit ofRs.385.45 lakhs under the MAT provisions of the section 115JBof assessee in F. Y. 2010-11 has escaped assessment within themeaning of section 147. Based on the above reasons, I considerthat this is a fit case for reopening of the assessment u/s. 147.Therefore, approval of the Pr. Commissioner of Income Tax-1,Kolhapur is sought in this case as per the provisions of Section151(1), for issue of notice u/s. 148.” (c)Upon being supplied reasons, Petitioner received objections to the notice for the re-opening under communication dated 18[th]September, 2018. Such objections were rejected by the Assessing Officer by an order dated 21[st] September, 2018. Hence,this Petition. 2Having heard the learned Counsel for the parties for finaldisposal of the Petition and having perused the documents on record,what emerges is that, the impugned notice has been issued beyond aperiod of four years from the end of the relevant Assessment Year. Therequirement flowing from the first proviso to Section 147 of the Act, thatincome chargeable to tax has escaped Assessment due to failure of theAssessee to disclose fully and truly all material facts, therefore, wouldhave to be satisfied. In the present case, the reasons recorded by theAssessing Officer would clearly establish that, these requirement is not satisfied. In the reasons itself, the Assessing Officer has referred to perusalof the case recorded for the Assessment Year in question from which, hecould see that certain error in the assessment has crept in. He refers to thesimilar additions made in the assessment for the Assessment Year 2012-13which were confirmed by the Commissioner of Income Tax (Appeals). satisfied. In the reasons itself, the Assessing Officer has referred to perusalof the case recorded for the Assessment Year in question from which, hecould see that certain error in the assessment has crept in. He refers to thesimilar additions made in the assessment for the Assessment Year 2012-13which were confirmed by the Commissioner of Income Tax (Appeals). 3In the absence of the failure of the Assessee to disclose fullyand truly all material facts, the impugned notice issued beyond a period offour years of the relevant Assessment Year, cannot be sustained. TheAssessing Officer has not referred to any material outside of theAssessment records to form the belief that, income chargeable to tax hasescaped assessment. In fact, he proceeds essentially on the basis of thecase records. Under the circumstances, impugned notice is set aside. 4Petition disposed of. (M.S.SANKLECHA,J.) (AKIL KURESHI,J.)