BALL AEROSOL PACKAGING INDIA PRIVATE LIMITED Vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(1)(1), AHMEDABAD

JUDGEMENT

(1.) By way of this petition under Article 226 of the Constitution of India, petitioner has challenged the legality and validity of the impugned notice dtd. 20/3/2021 at Annexure-A and has also sought for quashing and setting aside the impugned order dtd. 16/11/201 at Annexure-H to the petition.

(2.) The background of facts which has given rise to the present petition is that petitioner is engaged in the business of manufacturing of aluminum extruded aerosol containers in various sizes. Petitioner filed its original return of income for A.Y. 2016-17 on 29/11/2016, declaring a total loss of Rs.39,16,25,787.00. Return of the petitioner was processed and case of the petitioner was selected for scrutiny. Notice under Sec. 142(1) was issued on 11/6/2018, requiring the petitioner to submit specific details relating to (a) increase in share capital along with confirmation and ITR of the persons from whom the same was received, (b) details of premium received on shares along with name, PAN, address and confirmation of the persons from whom same was received and (c) details of method adopted for determining premium of shares.

(3.) Learned advocate Mr. Bandish Soparkar appearing for petitioner has vehemently contended that action on the part of respondent authority is not only unjust and arbitrary, but also grossly in violation of the fundamental rights guaranteed under Article 14 of the Constitution of India and impugned notice being patently bad, illegal and contrary to the settled proposition of law, same deserves to be quashed. It has been contended that in view of Sec. 151 of the Income tax Act, 1961, no notice under Sec. 148 can be issued unless superior authority is satisfied of the reasons recorded by the Assessing Officer. Whereas, in the instant case, sanction which is shown to have been accorded by relevant higher authority is less than few hours on the same day, which clearly indicates that higher authority has not applied its mind while granting sanction and as such, sanction being reflected is merely an empty formality and very issuance of notice under Sec. 148 of the Act is mechanical exercise of power, without just reasons. Hence, deserves to be quashed. It has also been submitted that respondent is seeking to reopen the assessment only on one issue that petitioner received excess share premium of Rs.12,43,55,310.00 against issuance of 6,00,75,029 shares and such share premium is required to be added under Sec. 56(2)(vii) (b) of the Act and this issue had been clarified by the petitioner and when called for assessing officer after having satisfied himself with the explanation so offered has not made any addition on this issue while passing the assessment order under Sec. 143(3) on 15/12/2019 and as such, authority is now inclined to take a different view than what has been examined and decided and as such, impugned notice issued under Sec. 148 is based upon change of opinion which is impermissible by virtue of Sec. 147 of the Act. Hence, he prays for quashing of said notice.