Bombay High Court
Parle Products Private Limited vs Assistant Commissioner Of Income-Tax, ... on 21 December, 2021
Bench: K. R. Shriram, Amit B. Borkar
1 910-WP 2976-19.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.2976 OF 2019
Parle Products Private Limited ] ... Petitioner
Versus
Assistant Commissioner of Income-tax, ]
Circle 10(3)(2), Mumbai & Ors. ] ... Respondents
Mr. Madhur Agrawal i/b Mr. Sameer Dalal for Petitioner.
Mr. Akhileshwar Sharma for Respondents - Revenue.
CORAM :- K. R. SHRIRAM &
AMIT B. BORKAR, JJ.
DATE :- 21 DECEMBER, 2021
P. C. :-
1. At the outset, we have to note that in the Affidavit-in-Reply of one Mayank Mishra, Assistant Commissioner of Income Tax-2(3)(1), Mumbai, at paragraph 8, he states, ' I rely upon the case law cited by me while disposing of the objections of the assessee on the notice u/s 148 being Exhibit-M to the Writ Petition'. Exh.M has been issued by one Nimit Mehta, Circle 10(3)(2), Mumbai. So, Mayank Mishra could not have disposed the objections. Therefore it is an incorrect statement made on oath by the said Mayank Mishra.
URS 1 of 5 Digitally signed UMESH by UMESH RAMESH RAMESH SHINDE Date: SHINDE 2021.12.23 14:56:30 +0530 2 910-WP 2976-19.odt
2. Thereafter in paragraph 9 he states, ' I say that an independent belief was formed by Assessing Officer at the time of recording of reasons and issuance of notice u/s 148 of the Income-tax Act, 1961'. When Mr. Mayank Mishra is not the officer who had issued notice under Section 148, we wonder how he makes a statement that an independent belief was formed by Assessing Officer at the time of recording of reasons of issuance of notice under Section 148 of the Income Tax Act, 1961. These are mere conjectures.
3. When we brought this to the notice of Mr. Sharma, learned Counsel for Revenue, and posed a question why action should not be taken against said Mayank Mishra for making incorrect statement on Affidavit, Mr. Sharma requested leave to withdraw the Affidavit-in-Reply and file a fresh Affidavit. We will grant indulgence to Mr. Sharma to withdraw this Affidavit but we are not inclined to grant permission to file any fresh Affidavit. This is because by an order dated 12/12/2019 Respondents were given 2 weeks time to file Affidavit-in-Reply but this Affidavit itself is affirmed only on 22/11/2021, after a delay of almost 2 years. Therefore Mayank Mishra is already in breach of orders of the Court by not filing the Affidavit-in-Reply within the time provided by this Court in the order dated 12/12/2019. Hence, we proceed on the basis that there is no reply filed.
URS 2 of 5
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4. Petitioner received a notice dated 27/03/2019 for AY 2012- 13 under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). The reasons for re-opening the assessment is contained in the communication dated 01/05/2019. The objections filed by Petitioner with regard to reasons recorded for invoking provisions of Section 147 of the Act came to be rejected by an order dated 24/09/2019. Petitioner is impugning in this Petition the notice dated 27/03/2019 and the order dated 24/09/2019.
5. Petitioner had filed electronically its return of income for AY 2012-13 on 29/11/2012. Petitioner thereafter filed a revised return on 28/03/2014 and the case was selected for scrutiny and assessment proceeding were completed under Section 143(3) of the Act on 28/03/2015. Petitioner's income was assessed at Rs.56,84,43,100/- against declared total income of Rs.53,21,82,382/-. This is an admitted position. Since the notice under Section 148 has been issued after the expiry of 4 years of the end of the relevant assessment year, proviso to Section 147 applies and the onus is on Respondents to show that there was failure on the part of Petitioner to truly and fully disclose all material facts.
URS 3 of 5
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6. We have considered the reasons recorded for issue of notice under Section 148 of the Act and the reasons do not indicate any failure on the part of Petitioner. The entire basis for re-opening is change of opinion of the Assessing Officer. According to the Assessing Officer, on verification of records, he observed that Schedule 31 in the profit and loss account shows that Assessee company has debited a s um of Rs.1070.42 Lakhs towards 'net loss of cancellation of forward contract'. Since the forward contract was cancelled and not settled by actual delivery, the same is in the nature of speculative transaction and the Assessee has not disallowed this loss in the computation of income. According to the Assessing Officer, this amount of Rs.1070.42 Lakhs is speculation loss and should not have been allowed against regular business income.
7. We have to note that admittedly, at Schedule 31 in profit and loss account shows a figure of Rs.1070.42 Lakhs as ' net loss of cancellation of forward contract'. Note 40 which forms part of financial statement also mentions about company entering into derivative contract in the nature of forward contract etc. and the company does not use foreign exchange contract for speculative purpose. All these details were available before the Assessing Officer who passed the Assessment Order dated 28/03/2015. Between the date of order of assessment sought to be re-opened and the date of formation of opinion by the Assessing Officer, URS 4 of 5 5 910-WP 2976-19.odt nothing new has happened. It is merely a fresh application of mind by a different Assessing Officer to the same set of facts. When the primary facts necessary for assessment are fully and truly disclosed, the Assessing Officer is not entitled on change of opinion to commence proceedings for reassessment. Even if the Assessing Officer, who passed the assessment order, may have raised too many legal inferences from the facts disclosed, on that account the Assessing Officer, who has decided to reopen assessment, is not competent to reopen assessment proceedings. Where on consideration of material on record, one view is conclusively taken by the Assessing Officer, it would not be open to reopen the assessment based on the vary same material with a view to take another view.
8. In the circumstances, the impugned notice dated 27/03/2019 and the order dated 24/09/2019 are hereby quashed and set aside.
9. Petition allowed accordingly with no order as to costs.
(AMIT B. BORKAR, J.) (K. R. SHRIRAM, J.) URS 5 of 5