INTERCONTINENTAL (INDIA) Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The petition is directed against issuance of notice under section 148 of the Income Tax Act, 1961 ("the Act" for short) dated 28.3.2012. The case of the petitioner is that the petitioner is a partnership firm. Original return of income was filed by the petitioner alongwith attached documents under section 139(1) of the Act for the assessment year 2005 -2006 on 28.10.2005 declaring total income of Rs. 18,09,040/ -. Alongwith with said return under section 139 of the Act, the petitioner had attached several documents and furnished particulars which are reflected on page -3 of the petition memo. It was also specifically pointed out by the petitioner about the issue pertaining to brokerage and commission during the hearing. The petitioner's return came to be selected for scrutiny and after scrutiny under section 143(3) of the Act, assessment order came to be passed on 27.12.2007. By that time, on 20.2.2006, notice was issued under section 143(2) of the Act and in compliance thereto and in response to the questionnaire which was furnished on 23.10.2007, the petitioner has replied again and furnished all necessary details by communication dated 28.11.2007. In addition thereto, the petitioner has also submitted a detailed reply on 5.7.2007 and in this regard during the course of hearing also, the petitioner has produced all necessary documents and books. It was then after considering several materials which was adduced, scrutiny assessment came to be passed. From the record, it emerges that against that scrutiny assessment, the petitioner has preferred an appeal before CIT(Appeals) and later on the department had filed appeal before Tribunal. The said appeal came to be dismissed on 22.10.2010 and pursuant thereto, the assessment which has been made on 27.12.2007 came to be final. It is the case of the petitioner that despite aforesaid circumstances, though issue has been deliberated and has been considered at detailed length, still however, after scrutiny assessment after a period of four years, notice dated 28.3.2012 came to be issued which is impugned in this petition.

(2.) In this background of facts, learned counsel Mr. Soparkar for the petitioner has submitted that powers under section 148 of the Act have been exercised after a period of more than four years. It was also submitted that there was no new material available with the authority which would form a belief to reopen assessment. Learned counsel further submitted that it is not the case of the department that there was no full and true disclosure of income on part of the assessee and has submitted that the assessee has fully and truly submitted all materials which was available at his end. He further submitted that at the time of framing assessment under section 143(3) of the Act, relevant material has been considered and therefore, submitted that the authority has no jurisdiction to reopen the assessment under section 148 of the Act. He submitted that if ultimately that be allowed, the same would tantamount to change of opinion which according to series of decisions would be impermissible. He also submitted that by way of draft amendment in the petition, it has been asserted that re -assessment proceedings have in fact, been initiated on the basis of audit objection raised by the audit wing of the department and therefore, the same is impermissible. It was also specifically pointed out that the reasons which are supplied for issuance of reopening notice, are based on proper verification of the record which was available on hand and therefore, the power to reopen cannot be exercised to review of to reform an opinion. Learned counsel for the petitioner therefore, requested the Court not to allow such reopening and that too after a period of more than four years. His main limb of argument is that after a period of four years, the authority has only to look to the aspect whether the assessee has fully and truly disclosed all material at the time of assessment or not. In the background of these facts, he submitted that such exercise of power on the part of the respondent authority should be quashed. He has also drawn the attention of the Court that from the background of the facts, even on the basis of available material on record, the provisions of section 195 of the Act are not attracted and althroughout it is not the case that reopening is on account of some concealment of material and therefore, requested the Court not to allow such exercise to be taken on part of the respondent authority.

(3.) As against this, learned counsel Mrs. Mauna Bhatt for the revenue submitted that while issuing notice under section 148 of the Act, proper reasons have been assigned as to why reopening should be allowed. She submitted that may be it is not the case of true and full disclosure at the time of assessment by the assessee but at the same time, she submitted that there is a case of omissions on part of the assessee not to disclose that aspect and therefore, justified that notice under section 148 of the Act is just and proper. She has drawn attention of the Court to page 25 form 2D in which the fact about brokerage and commission is not reflected and that thereby she submitted that there is a clear omission on part of the assessee which warrants authority to exercise powers of reopening. It was also submitted that there is no straight -jacket formula that even if issue of reopening is given up after a period of four years, omission part can never be looked into. She further submitted that this is the material which has constrained the authority to issue notice under section 148 of the Act and therefore, this is a clear case of escape of income chargeable to tax on account of omission on part of the assessee and therefore, she requested the Court to dismiss the petition.