Bombay High Court
Dr. Amins Pathology Laboratory vs P.N. Prasad, Joint Cit & Ors. (No.2). on 17 September, 2001
Equivalent citations: [2001]252ITR683(BOM)
Author: S. H. Kapadia
Bench: S. H. Kapadia
JUDGMENT S. H. Kapadia, J.
By notice dated 14-3-2001, the petitioner-assessee was informed about reopening of its assessment for the assessment year 1994-95. That notice was challenged vide Writ Petition No. 955 of 2001. In that matter, the notice under section 148 was issued after an order of assessment came to be passed against the petitioner herein under section 143(3) of the Act. That writ petition came to be rejected by this court on 17-9-2001 (Dr. Amin's Pathology Laboratory v. P. N. Prasad, Joint CIT (No. 1) (2001) 252 ITR 673 (Bom)). Simultaneously, the department also issued notices dated 2-3-2001 and 14-3-2001, under section 148 of the Income Tax Act alleging escapement of income from assessment for the assessment years 1995-96 and 1996-97. The said notices are under challenge in the present two writ petitions. The only factual difference is that the impugned notices herein seek to set aside the intimation under section 143(1)(a) whereas, in the earlier Writ Petition No. 955 of 2001 the notice sought to reopen the assessment after the assessment order was passed under section 143(3) of the Act.
Therefore, both the above writ petitions were taken up together. They were heard along with Writ Petition No. 955 of 2001. They were dismissed on 17-9-2001, by the following order :
"For the reasons to be recorded separately in the oral judgment, writ petition is rejected."
Facts :
For the sake of convenience, however, the facts in Writ Petition No. 943 of 2001 are mentioned hereinafter.
The petitioner filed its return of income for the assessment year 1995-96 on 31-10-1995, showing total income of Rs. 6,77,380. This return was accompanied by the petitioner's audited accounts for the year ending 31-3-1995, and by a tax audit report under section 44AB of the Act. The return of income was accepted by the department under section 143(1)(a). However, the assessing officer subsequently detected that an unpaid expense amounting to Rs. 7,85,613 was not disallowed while accepting the returns of the assessee. Therefore, the impugned notice under section 148 came to be issued. This notice is dated 14-3-2001. This notice has been challenged in Writ Petition No. 943 of 2001.
Arguments :
On behalf of the petitioner, it was urged that the impugned notice has been issued merely on the basis of change of opinion and, therefore, it cannot justify a valid reassessment. This argument was also advanced in Writ Petition No. 955 of 2001 (see (2001) 252 ITR 673) which has been dismissed. We do not wish, therefore, to repeat our reasoning once again.
Mr. Dastur, learned counsel for the petitioner, however, urged that the impugned notice dated 14-3-2001, is a sequel to the notice also dated 14-3-2001, given to the petitioner for the assessment year 1994-95. He contended that, that notice was given for the assessment year 1994-95 after the petitioner was assessed under section 143(3). He contended that even for the assessment year 1994-95 the reopening was sought on the ground that unpaid expenses were not disallowed. He, therefore, contended that the impugned notice in the present case is on the same grounds as the impugned notice which was the subject-matter of the Writ Petition No. 955 of 2001 [see (2001) 252 ITR 673 (Bom)]. He contended that although in the present case, reopening is sought of an order passed under section 143(1)(a), since the impugned notice herein flows from the earlier notice for the assessment year 1994-95, the proviso to section 147 of the Income Tax Act will also apply to the facts of the present case. In other words, Mr. Dastur, learned counsel for the assessee, argued that, in the present case also, the assessment under section 143(1)(a) could not have been reopened as there is no allegation of suppression of material facts in the reasons given by the assessing officer. In other words, he contended that the proviso to section 147 would also apply to the facts of the present case as the impugned notice in the present writ petition is a sequel to the impugned notice in the earlier Writ Petition No. 955 of 2001 [see (2001) 252 ITR 673 (Bom)].
Findings There is no merit in the two writ petitions. In the present case, returns have been accepted under section 143(1)(a). Thereafter, the assessing officer found that unpaid expenses which ought to have been disallowed were not disallowed. This aspect was overlooked when the returns were accepted under section 143(1)(a). Therefore, there is no question of change of opinion as alleged. Therefore, the first argument is rejected. On the second argument, it may be noted that the proviso to section 147 applies only to cases where reopening is sought of assessments under section 143(3). In the present case, there was no assessment of the petitioner under section 143(3) in respect of the assessment years 1995-96 and 1996-97. Hence, the proviso to section 147 has no application. It is true that after the returns came to be accepted in respect of the assessment year 1995-96, four years have elapsed. However, there was no assessment under section 143(3) as in the case of the notice which is the subject-matter of Writ Petition No. 955 of 2001 [see (2001) 252 ITR 673 (Bom)]. Therefore, the proviso to section 147 has no application to the facts of the present case. Under the Income Tax Act, each year is a separate unit. Therefore, there is no merit in the argument advanced on behalf of the assessee that the impugned notice in the present case is a sequel to the notice dated 14-3-2001, which is the subject-matter of Writ Petition No. 955 of 2001 [see (2001) 252 ITR 673 (Bom)]. As stated above, Writ Petition No. 955 of 2001 [see (2001) 252 ITR 673 (Bom)] was in respect of the assessment year 1994-95 whereas the present two writ petitions are seeking to reopen the assessment for the assessment years 1995-96 and 1996-97, Hence, there is no merit in the above arguments on behalf of the assessee.
Conclusion :
For the above reasons, both the writ petitions fail. Accordingly, Writ Petition No. 943 of 2001 and Writ Petition No. 935 of 2001 stand rejected.