Gujarat High Court
Rushil Decor Limited vs Assistant Commissioner Of Income Tax, ... on 15 July, 2024
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/19624/2021 JUDGMENT DATED: 15/07/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 19624 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ? No
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy
of the judgment ? No
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution No
of India or any order made thereunder ?
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RUSHIL DECOR LIMITED
Versus
ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(4)
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Appearance:
MR TUSHAR HEMANI, SR. ADVOCATE WITH MS VAIBHAVI K
PARIKH(3238) for the Petitioner(s) No. 1
MR.VARUN K.PATEL(3802) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
Date : 15/07/2024
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned senior advocate Mr.Tushar Page 1 of 8 Downloaded on : Thu Jul 18 20:48:08 IST 2024 NEUTRAL CITATION C/SCA/19624/2021 JUDGMENT DATED: 15/07/2024 undefined Hemani with learned advocate Ms.Vaibhavi Parikh for the petitioner and learned senior standing counsel Mr.Varun Patel for the Respondent - Assessing Officer.
1.1 Rule, returnable forthwith. Learned advocate Mr.Varun Patel waives service of notice of Rule on behalf of the respondent. 1.2 Having regard to the controversy in narrow compass, with the consent of learned advocates for the respective parties, the matter is taken up for final hearing.
2. By this petition under Article 226 of the Constitution of India, the petitioner has challenged notice under Section 148 of the Income Tax Act, 1961 (for short 'the Act') issued on 03rd July, 2021 for the Assessment Year 2015-16 beyond the period of four years.
3. The petitioner filed return of income for A.Y. 2015-16 on 23rd September, 2015 and Page 2 of 8 Downloaded on : Thu Jul 18 20:48:08 IST 2024 NEUTRAL CITATION C/SCA/19624/2021 JUDGMENT DATED: 15/07/2024 undefined claimed TDS credit of Rs.19,24,879/-. The case of the petitioner was selected for scrutiny assessment. The petitioner filed various details and information called for by the Assessing Officer and the same were considered and the assessment order was passed under Section 143(3) of the Act on 12th September, 2017. 3.1 During the course of assessment proceedings the Assessing Officer found that there was unclaimed TDS of Rs.33,372/- in the case of the petitioner and raised a query calling upon the petitioner to offer explanation in relation to the same.
3.2 The petitioner by letter dated 08th September, 2017 provided the details with regard to the TDS query that as per the I.T. Return, total TDS credit was Rs.19,24,879/- as against total TDS of Rs.19,58,251/- as per Form 26AS and explained the difference of Rs.33,372/-. It was explained by the assessee that the TDS of Page 3 of 8 Downloaded on : Thu Jul 18 20:48:08 IST 2024 NEUTRAL CITATION C/SCA/19624/2021 JUDGMENT DATED: 15/07/2024 undefined Rs.33,356/- effected by Paschim Gujarat Vij Company Limited (for short 'PGVCL') and TDS of Rs.16/- effected by Go Airlines India Ltd. has been deducted, comprises of amount totaling to Rs.33,372/-. It was explained that PGVCL deducted TDS on interest given on the electricity security deposit in respect of Navalgadh Unit, however the petitioner has sold the said unit to one M/s.Salasar Agropanel Pvt. Ltd. in December, 2014 and has also transferred the electricity connection. Due to procedural time consumed in transferring the name of the electricity connection in the name of said company, PGVCL was issuing bills of electricity charges in the name of the petitioner company and even interest advice was also issued in the name of the petitioner company after deducting the TDS. 3.3 It was, therefore, explained that the petitioner had not considered TDS credit corresponding to interest income which was Page 4 of 8 Downloaded on : Thu Jul 18 20:48:08 IST 2024 NEUTRAL CITATION C/SCA/19624/2021 JUDGMENT DATED: 15/07/2024 undefined transferred to Salasar Agropanel Pvt. Ltd. The petitioner also placed on record acknowledgment of return of income filed by the said company with computation of income and ledger of interest income on security deposit.
4. After a period of four years, the impugned notice under Section 148 of the Act was issued. The petitioner sought reasons recorded for re-opening which was supplied to the petitioner on 03rd July, 2021 which are reproduced hereunder:-
"1. Brief details of the assessee: The assessee has filed original return of income on 23.09.2015 declaring total income at Nil. Subsequently, the case of the assessee was selected for scrutiny and assessment order u/s 143(3) of the Act was completed on 12.09.2017 assessing total income at Rs. 33,39,295/-.
2. Brief details of information collected/received by the AO: On perusal Page 5 of 8 Downloaded on : Thu Jul 18 20:48:08 IST 2024 NEUTRAL CITATION C/SCA/19624/2021 JUDGMENT DATED: 15/07/2024 undefined of the case of records of the assessee, it is seen that assessee company claimed TDS credit of Rs. 1924879/- in its return of income filed for the year under consideration. Whereas the total TDS in the account of the assessee as reflected in 26AS data is Rs. 1958251/- Therefore, the assessee made short claim of TDS amounting to Rs. 33,372/- and hence the assessee company has not offered corresponding income to that extent.
3. ANALYSIS OF INFORMATION: The assessee company in its return of income claimed TDS of Rs. 1958251/-, whereas the TDS as per 26AS is Rs. 1924879/-. Therefore, it is clear that the assessee company did not claim TDS amounting to Rs. 33372/-. Hence, the assessee company has not offered income corresponding to the unclaimed TDS of Rs. 33372/-. Hence, the assessee's income for the year under consideration has escaped assessment because of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment to the tune of the income Page 6 of 8 Downloaded on : Thu Jul 18 20:48:08 IST 2024 NEUTRAL CITATION C/SCA/19624/2021 JUDGMENT DATED: 15/07/2024 undefined corresponding to the unclaimed TDS i.e. Rs. 3,33,720/-.
4. Hence, assessee has understated its income to the extent of Rs. 3,33,720/- which constitutes income of the assessee from undisclosed source not offered in its return of income and remained to be taxed. Hence, in respect of such income which escaped assessment, the failure is on the part of the assessee to disclose fully and truly all material facts necessary for assessment, for the assessment year 2015-16."
5. From the perusal of the above reasons, it is apparent that the Assessing Officer on the same material has arrived at a reason to believe that the income has escaped assessment though the petitioner has explained the same during the regular assessment proceedings and there is no failure on part of the petitioner to fully and truly disclose all material facts during the assessment for the year under consideration. 5.1 In such circumstances, it is a mere Page 7 of 8 Downloaded on : Thu Jul 18 20:48:08 IST 2024 NEUTRAL CITATION C/SCA/19624/2021 JUDGMENT DATED: 15/07/2024 undefined change of opinion on part of the Assessing Officer and the impugned notice is without jurisdiction and also hit by the Proviso to Section 147 of the Act.
6. In view of the above facts, we are of the opinion that the impugned notice is liable to be quashed and set aside and accordingly, the impugned notice is quashed and set aside. Rule is made absolute to the said extent.
(BHARGAV D. KARIA, J) (NIRAL R. MEHTA,J) ANUP Page 8 of 8 Downloaded on : Thu Jul 18 20:48:08 IST 2024