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Gujarat High Court

M/S Amneal Oncology Pvt. Ltd vs Assistant Commissioner Of Income Tax, ... on 22 August, 2023

Author: Biren Vaishnav

Bench: Biren Vaishnav, Bhargav D. Karia

                                                                                 NEUTRAL CITATION




    C/SCA/19907/2021                             JUDGMENT DATED: 22/08/2023

                                                                                  undefined




            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

              R/SPECIAL CIVIL APPLICATION NO. 19907 of 2021


FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE BIREN VAISHNAV                           Sd/-

and
HONOURABLE MR. JUSTICE BHARGAV D. KARIA                         Sd/-

==========================================================

1    Whether Reporters of Local Papers may be allowed                  No
     to see the judgment ?

2    To be referred to the Reporter or not ?                           No

3    Whether their Lordships wish to see the fair copy                 No
     of the judgment ?

4    Whether this case involves a substantial question                 No
     of law as to the interpretation of the Constitution
     of India or any order made thereunder ?

==========================================================
                M/S AMNEAL ONCOLOGY PVT. LTD.
                            Versus
      ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1)(1)
==========================================================
Appearance:
MR DHINAL A SHAH(12077) for the Petitioner(s) No. 1
MR.VARUN K.PATEL, Ld. SENIOR STANDING COUNSEL WITH MR DEV D
PATEL, ADVOCATE (3802) for the Respondent(s) No. 1
==========================================================

    CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
          and
          HONOURABLE MR. JUSTICE BHARGAV D. KARIA

                             Date : 22/08/2023

                          ORAL JUDGMENT

(PER : HONOURABLE MR. JUSTICE BIREN VAISHNAV) Page 1 of 6 Downloaded on : Sun Sep 17 02:03:25 IST 2023 NEUTRAL CITATION C/SCA/19907/2021 JUDGMENT DATED: 22/08/2023 undefined

1.Heard Mr.Dhinal A. Shah learned Counsel for the petitioner and Mr.Varun K. Patel learned Senior Standing Counsel with learned advocate Mr.Dev D. Patel for the respondent.

2.Rule returnable forthwith. The matter is taken up for final hearing with the consent of both the sides.

3.The challenge in this petition is to the notice dated 26.03.2021 issued by the respondent proposing to reopen the completed assessment of the petitioner for Assessment Year 2017-18 and the order disposing of objections dated 11.11.2021.

4.The facts in brief indicate that the petitioner, a company incorporated under the Companies Act, 1956, filed its return of income on 30.11.2017 for the Assessment Year 2017-18 declaring total income of Rs.1,77,93,870/-. The petitioner thereafter filed revised return on 19.11.2018. It is the case of the petitioner that he had availed a loan in foreign exchange in compliance of the Exchange Control Regulations. It is further his case that such account was in compliance with the applicable accounting standards. The Page 2 of 6 Downloaded on : Sun Sep 17 02:03:25 IST 2023 NEUTRAL CITATION C/SCA/19907/2021 JUDGMENT DATED: 22/08/2023 undefined foreign exchange fluctuation gain of Indian National Rupees 54,69,089/- was treated in capital account and therefore not offered for taxation. According to the petitioner, the loan was utilized for Undertaking situated within the Special Economic Zone and therefore, entitled to exemption under Section 10 AA of the Income Tax Act, 1961 (for short "the Act"). It is the case of the petitioner that pursuant to the notice issued under Section 143 of the Act, where an inquiry was made with regard to the claim under Section 10 AA of the Act, an explanation was rendered by the petitioner on 11.12.2019. On the basis of this explanation, the respondent passed an order under Section 143 (3) of the Act on 14.12.2019 determining total income of the petitioner at Rs.1,77,93,870/-.

5.On 26.03.2021, by the impugned notice for the Assessment Year 2017-18, the author of the notice based on the assessment records for the year under consideration recorded reasons indicating that the petitioner was not eligible for exemption under Section 10 AA being profits not derived from any export from its unit of Special Economic Zone. The Revenue therefore was of the opinion that the assessee has wrongly claimed the exemption Page 3 of 6 Downloaded on : Sun Sep 17 02:03:25 IST 2023 NEUTRAL CITATION C/SCA/19907/2021 JUDGMENT DATED: 22/08/2023 undefined under Section 10 AA of the Act which has resulted in escapement of income.

6.Mr.Shah learned Counsel for the petitioner would submit that if the author of the notice is seen, he is the very same individual who accepted the claim of the petitioner and passed an assessment order recording and accepting the claim of the petitioner in the case of seeking exemption under Section 10AA of the Act.

7.Essentially therefore, in the submission of Mr.Shah learned Counsel for the petitioner, the impugned notice recording reasons was based on "change of opinion".

8.Mr.Varun Patel, learned Senior Standing Counsel appearing with Mr.Dev D. Patel learned advocate for the respondent supporting the order and taking us to the averments made in reply would submit that the reason behind the revision of return given by the assessee is that it has revised its return to offer the above gain for tax in view of the retrospective amendment to the Finance Act and submit that it was not a mere change of opinion and that fact also has been appreciated in the order disposing of the objections itself.

NEUTRAL CITATION C/SCA/19907/2021 JUDGMENT DATED: 22/08/2023 undefined

9.Having considered the submissions made by the learned Counsel for the respective parties what is noticeable is that in coming to the conclusion that the petitioner was not entitled or not eligible for exemption under Section 10 AA of the Act and that the assessee had wrongly claimed the exemption, what is evident from reading the reasons and the order disposing the objections is that the author of these communications is the very same Officer who in response to a notice under Section 142 of the Act having been satisfied with the explanation given by the petitioner vide its communication dated 11.12.2019 passed an assessment order, accepting the explanation tendered by the petitioner in the communication of 11.12.2019.

10. This case can be no better example of a case where an Officer at the drop of the hat has sought to change his opinion which is contrary to the decision of the Supreme Court in the case of CIT Vs. Kelvinator of India Ltd. reported in 228 CTR 488.

NEUTRAL CITATION C/SCA/19907/2021 JUDGMENT DATED: 22/08/2023 undefined

11. For the aforesaid reasons, the petition is allowed. The impugned notice dated 26.03.2021 and the order disposing of objections dated 11.11.2021 are quashed and set aside. Rule is made absolute.

Sd/-

(BIREN VAISHNAV, J) Sd/-

(BHARGAV D. KARIA, J) URIL RANA Page 6 of 6 Downloaded on : Sun Sep 17 02:03:25 IST 2023