ORACLE SYSTEMS CORPORATION Vs. ASSISTANT DIRECTOR OF INCOME TAX CIRCLE 2(1), INTERNATIONAL TAXATION, NEW DELHI

JUDGEMENT

(1.) These writ petitions are taken up together as they involve common questions. The writ petition being W.P.(C) No. 12870/2009 relates to the assessment year 2002-03 and W.P. (C) 12856/2009 pertains to the assessment year 2003-04. In both these writ petitions, the challenge is to the notices under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as "the said Act") as also to the orders disposing the objections. The section 148 notice was issued on 10.12.2008 in respect of assessment year 2002-03 and on 22.09.2008 in respect of assessment year 2003-04. The orders disposing the objections both dated 11.09.2009 in respect of both the assessment years were passed by the Dy. Assistant Director, Department of Income Tax rejecting the objections. Being aggrieved thereby, the present writ petitions have been filed.

(2.) The facts and circumstances are virtually identical in respect of both the assessment years and, therefore, we shall be referring to the facts of the assessment year 2002-03. In respect of this year, the original assessment under Section 143(3) was completed on 28.03.2005. More than 4 years from the end of the said assessment year, the impugned notice under Section 148 of the said Act was issued on 10.12.2008. Pursuant to the reasons having been furnished, the petitioner/assessee submitted its objections to the reopening of assessment on 31.08.2009 which, as indicated above, has been rejected by virtue of the impugned order dated 11.09.2009. The learned counsel for the petitioner/assessee submitted that the impugned notices and the orders rejecting the objections are liable to be set aside, primarily on two grounds. First of all, it is contended that there has been a change of opinion and, secondly, it has been contended that the pre-conditions as stipulated in the first proviso under Section 147 have not been satisfied. Particularly, there is no failure on the part of the assessee to disclose fully and truly all the material facts for assessment.

(3.) Before we examine these two points, it would be necessary to set out the purported reasons which have been recorded for reopening of the assessment for the assessment year 2002-03. It may be pointed out at this juncture itself that the reasons recorded for 2003-04 are virtually identical. The reasons recorded for assessment year 2002-03 are as under:-