Metal Alloys Corporation vs Assistant Commissioner of Income Tax

V.M. Sahai, J.—Though the writ petition is listed for admission, with the consent of the learned counsel for the parties, we have taken the writ petition for final disposal. Rule. We have heard Mr. Bandish Soparkar holding brief for Mrs. Swati Soparkar, learned counsel for the petitioner and Mr. Pranav G. Desai, learned counsel appearing for the respondent.

This writ petition has been filed challenging the notice dated August 6, 2010, issued by the Assistant Commissioner, income tax Circle II, Jamnagar, to the petitioner that for the assessment year 2007-08 the income chargeable to tax has escaped assessment within the meaning of section 147 of the income tax Act, 1961 (for short "the Act"). Reasons for reopening the assessment order dated October 14, 2008, were mentioned by the Assessing Officer, which was served on the petitioner on November 9, 2011.

It is well settled that the assessment order can be reopened within a period of four years if some new material is discovered or the assessee has concealed or suppressed some material relevant to the assessment year or he has failed to disclose the material relevant to the assessment year. The assessee has filed his return on October 25, 2007, which was processed u/s 143(1) of the Act on October 14, 2008, accepting the total income at Rs. 38,88,083. The assessee has claimed deduction u/s 10B of the Act at Rs. 1,60,55,803 and the same was restricted to the tune of Rs. 1,57,57,803 for the assessment year 2007-08. According to the Assessing Officer, as mentioned in his reasons, the irregular deductions were allowed which was against the. provisions of section 10B(2) of the Act and, therefore, the assessee was not entitled for deduction u/s 10B of the Act.

During the course of assessment proceedings the income tax Officer has raised certain queries with regard to deductions, which were replied by the assessee and in the assessment order in paragraph 4.1 the Assessing Officer has dealt with the question of grant of deduction and has allowed deductions. In our opinion, the reasons given for reopening the assessment and the notice issued u/s 148 of the Act is nothing but a change of opinion. It is not the case of escape assessment as nothing was concealed by the assessee nor he has failed to furnish the material relevant to the assessment year before the Assessing Officer. For the aforesaid reasons, notice issued u/s 148 of the Act deserves to be quashed. In the result, this writ petition succeeds and is allowed. Notice dated August 6, 2010, issued u/s 148 of the income tax Act, 1961, to the petitioner by the Assistant Commissioner of income tax, Circle II, Jamnagar, for the assessment year 2007-08 is quashed. Parties shall bear their own costs.