ORDER
A.S. Supehia, J. – The petitioner is challenging the notice dated 15.03.2019, issued under Section 148 of the Income Tax Act, 1961 (for short “the Act”), seeking reopening of the assessment for the Assessment Year (AY) 2012-13 and the order dated 14.10.2019, passed by the respondent disposing of the objections raised by the petitioner opposing the reopening of the assessment.
2. For the AY 2012-13, the petitioner filed his e-return declaring total income of Rs.2,06,35,249/-. The income tax return of the petitioner was selected for scrutiny assessment, and hence, a notice under Section 143(2) of the Act dated 06.08.2013 was issued. Subsequently, notice under Section 142(1) of the Act was issued on 07.07.2014. The petitioner, accordingly, satisfied all the materials and details which were called upon, including the payments made by the petitioner and Tax Deducted at source (TDS) deducted thereon. Further details were also called for from the petitioner vide notice issued under Section 142(1) of the Act on 18.09.2014. Petitioner, accordingly, submitted the details of cost of integrated services sold Rs.7.5 crores during the year along with details of TDS deducted.
3. Ultimately, after further communications and supplying of details relating to the return and the TDS deducted, as well as breakup of cost of integrated services, the assessment order dated 20.01.2015 was passed by the Assessing Officer under Section 143(3) of the Act. After a period of four years from the end of assessment year 2012-13, i.e. on the expiry of sixth year, the respondent issued a notice under Section 148 of the Act dated 15.03.2019, alleging that income chargeable to tax has escaped assessment and called upon the petitioner to file a return. In response, the petitioner filed an e-return on 05.04.2019. The petitioner also objected to the reasons recorded therein by filing his objections on 16.05.2019, however, the same are not accepted and the order disposing of the objections was passed on 14.10.2019, which has been impugned in the writ petition.
4. Learned advocate Mr.Manish Shah, appearing for he petitioner, at the outset has invited the attention of this Court to the order dated 19.11.2019 passed by the Coordinate Bench of this Court in the present writ petition, while granting complete stay on the proceedings and has submitted that the Coordinate Bench has recorded the submission to the extent that there is no escapement of income chargeable to tax in the hands of the petitioner and in the scrutiny assessment, the petitioner had submitted all the details as called for, including the payments made under the TDS, integrated services as well as advance return written off of Rs.23,54,080/-. He has submitted that since the reopening is beyond the prescribed period of four years, as per the provisions of proviso to section 147 of the Act, the same can only be resorted to if the petitioner in his original assessment has not disclosed or has suppressed the information relating to the income. It is submitted that the Assessing Officer has reopened the assessment on the aspect of non-deduction of TDS under Section 194C of the Act on cost of integrated service sold and claim of expenditure of Rs.23,54,080/-being advance deposit written off as a revenue expenditure, which were already examined in the scrutiny assessment.
5. Learned advocate Mr.Shah has thus, submitted that reopening of the assessment amounts to change of opinion, as the scrutiny assessment order passed under Section 143(3) of the Act deals with all the aforesaid aspects which has been resorted to, by the Assessing Officer in reopening the assessment by issuing the notice under Section 148 of the Act. Thus, it is urged that petition may be allowed setting aside the impugned notice as well as order disposing of the objection.
6. Opposing the foregoing submissions and the present writ petition, learned Senior Standing Counsel Mr.Dev Patel has urged that the reopening of the assessment may not be scuttled at this stage since the petitioner can always satisfy the Assessing Officer. He has submitted that in the scrutiny assessment, the Assessing Officer has failed to examine the details of TDS deducted on the expenses and further on verification of the details, it was found that the assessee had debited an amount of Rs.23,54,080/- as advance deposit written off in the Profit and Loss Account and the same were not shown as income in any of the previous years and the advances and deposits were capital in nature. Thus, it is urged that since the assessee has failed deducting TDS under Section 194C of the Act on amount of Rs.7,51,77,563/- and failed in disallowing advance/deposit written off amount of Rs.23,54,080/-, the reopening of the assessment is legal and valid.
7. We have heard the learned counsel for the respective parties at length.
8. The facts, which are established from the pleadings, are that the petitioner submitted its e-return of income for the AY 2012-13 declaring total income of Rs.2,06,35,249/-, which was subjected to scrutiny assessment under the provisions of sections 142(1) and 143(2) of the Act. There were various details which was called for by the Assessing Officer, more particularly inquiring about the cost of integrated service of the year of Rs.7.5 crores, details of the TDS deducted and the advance written off of Rs.23,54,080/-. After inter se communications and issuance of notice as well as reply, ultimately, the assessment order dated 20.01.2015 was passed under Section 143(3) of the Act, assessing the income of the petitioner at Rs.2,13,87,500/-. After a period of four years from the end of assessment order for AY 2012-13, on the expiry of the sixth year, the respondent issued the notice under Section 148 of the Act dated 15.03.2019, alleging that income chargeable to tax has escaped assessment. It is pertinent to note that the reopening is premised on the identical issues, which were already dealt with in detail by the Assessing Officer.
9. The contents of the notice issued under Section 148 of the Act reveal that the reopening is premised on the basis of debited amount of integrated services sold at Rs.7,51,77,563/- and the Assessing Officer, while issuing notice under Section 148 of the Act, explaining the reasons of reopening has stated that the reply of the assessee in the original proceeding is vague and no specific details regarding the applicability of the deduction of TDS has been specified. Similarly, the Assessing Officer has doubted the assessment of the debit of an amount of Rs.23,54,080/- as advance/deposit written off in the Profit and Loss Account. The issue with regard to the deduction, failing of deducting TDS under Section 194C of the Act on amount of Rs.7,51,77,563/- was also doubted. All these have been examined in detail by the Assessing Officer, after the petitioner satisfied the Assessing Officer in the original scrutiny proceedings under Section 143(2) of the Act and ultimately, the assessment order under Section 143(3) of the Act has been passed.
10. Thus, we do not find that there was any fresh or new tangible material, which was not available with the Assessing Officer, to reopen the assessment beyond the period of four years. The petitioner in his original assessment proceedings has fairly disclosed all the information as called for by the Assessing Officer and hence, in wake of these facts, we find that the reopening of the assessment by issuing the notice under Section 148 of the Act is nothing but change of opinion. Hence, the same calls for interference by this Court.
11. The writ petition succeeds. The impugned notice dated 15.03.2019, issued under Section 148 of the Act, seeking reopening of the assessment for the AY 2012-13 and the order dated 14.10.2019, passed by the respondent disposing of the objections raised by the petitioner opposing the opening of the reassessment are hereby quashed and set aside.
