SAYAJI HOTELS LTD` Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) Rule. Mr. K.M. Parikh, learned standing Counsel waives service of rule on behalf of the Respondent. Considering the controversy involved in the present case which lies in a narrow compass, the petition is taken up for hearing and final disposal today.

(2.) In this petition under Article 226 of the Constitution of India, the Petitioner has challenged the notice dt. 24th March, 2010 issued under Section 148 of the IT Act, 1961 ('the Act') reopening the Petitioner's assessment for asst. yr. 2003-04.

(3.) The facts of the case stated briefly are that the Petitioner, a limited company, filed return of income on 27th Nov., 2003 declaring a loss of Rs. 1,46,546 which was accompanied by computation of total income in which tax was calculated according to Section 115JB of the Act and no tax was payable under the said provision, hence, refund of TDS was claimed. Along with the computation, the status of carried forward unabsorbed business loss and depreciation and bifurcation of accumulated depreciation and accumulated loss as per books for the asst. yr. 2003-04 were also attached. An intimation under Section 143(1) of the Act was passed accepting the return filed by the Petitioner. Thereafter, a notice under Section 154 of the Act came to be served on the Petitioner requiring the Petitioner to withdraw excess depreciation claimed and allowed to the Petitioner on hotel building @ 20 per cent as against 10 per cent admissible w.e.f. 1st April, 2003 for asst. yr. 2003-04. The mistake apparent on record was corrected by an order dt. 18th Feb., 2005 made under Section 154 of the Act. The depreciation was effectively reduced to Rs. 2,18,51,428 from Rs. 2,99,86,870 and the net reduction was set off against the business loss of Rs. 81,35,442. Thereafter, notice was issued under Section 142(1) of the Act. During the course of scrutiny assessment proceedings the AO asked the Petitioner to clarify the method of claiming depreciation pertaining to fixed assets for the projects of Gandhidham and Indore vis-a-vis the method of claiming depreciation for the Baroda project, pursuant to which the Petitioner submitted fresh computation of income pertaining to revised depreciation chart. After due scrutiny, the AO framed assessment under Section 143(3) of the Act by an order dt. 29th March, 2006. Subsequently, by the impugned notice dt. 24th March, 2010, the assessment for the year 2003-04 was sought to be reopened. In response to the notice the Petitioner by a letter dt. 16th April, 2010 requested the Respondent to treat its previous return as the return filed in response to the reassessment notice and asked for a copy of the reasons recorded. Upon receipt of a copy of reasons, the Petitioner filed its objections thereto by a letter dt. 18th Oct., 2010. By an order dt. 12th Nov., 2010, the objection raised by the Petitioner against reopening of the assessment came to be rejected. It is in the background of the aforesaid facts, that the Petitioner has filed the present petition challenging the notice dt. 24th March, 2010 issued under Section 148 of the Act.