Bombay High Court
Asian Cerc Information Services (P) ... vs Income Tax Officer on 17 July, 2007
Equivalent citations: (2007)211CTR(BOM)363, [2007]293ITR271(BOM)
Bench: F.I. Rebello, J.P. Devadhar
JUDGMENT
1. The petitioners aggrieved by the notice dt. 10th March, 2006 under Section 148 of the IT Act as also the order dt. 29th Nov., 2006 rejecting their objections have preferred the present petition. In view of the order to be passed we need not go into the facts on all the issues involved. The notice was issued on 10th March, 2006. Pursuant to the request by the petitioners the reasons to believe were communicated. The reasons recorded, that considering the judgment of the Rajasthan High Court in the case of CIT v. Arawali Constructions Co. (P) Ltd. the nature of the expenses incurred by the assessee in a sum of Rs. 62,79,638 needs to be examined and is required to be capitalised. The learned Counsel then draws our attention to the communication dt. 27th Sept., 2006 by the AO addressed to the senior audit officer wherein the judgment of the Rajasthan High Court is sought to be distinguished and a view is taken that the said judgment would not apply to the facts of the petitioner's case. This view taken by the AO was endorsed by the CIT-II by communication dt. 12th Oct., 2006 addressed to the Director, C/o Principal Auditor, Central Audit and Accounts Department. It is, therefore, the contention of the petitioner that once the AO was of the view that the judgment of the Rajasthan High Court was not applicable and in view of that the objections filed ought to have been accepted.
The same AO, who at the relevant time had addressed a letter to the auditor to remove the audit objections on understanding of the judgment of the Rajasthan High Court, was pleased to reject the objections as filed by the petitioner herein.
2. We have gone through the said order. We find that while disposing of the objections the AO has not given any reason as to why the AO had now come to the view, from the earlier view taken while addressing the letter to the auditor to remove the objections as to why the judgment of the Rajasthan High Court which earlier in his opinion was not applicable, became applicable. It is possible that the officer may have further reconsidered the judgment, but some reasons ought to have been disclosed. In our opinion this discloses total non-application of mind on the part of the AO.
3. In the light of that we are clearly of the view that the impugned communication dt. 29th Nov., 2006 has to be set aside and is hereby set aside and the matter is remanded back to the respondent No. 1, to reconsider the matter de novo and according to law. If there be any adverse order against the petitioner that shall not be acted upon for a period of eight weeks from the date of communication of the same.
Rule made absolute accordingly. There shall be no order as to costs.