Reassessment proceedings must be based on an independent formation of opinion by the Assessing Officer that the income has escaped assessment, and not solely on an audit objection raised by the audit party.

M.R. Shah, J.

1. By way of this petition under Article 226 of the Constitution of India to quash and set aside the impugned notice dated 13.8.2013 (Annexure A) issued by the respondent under section 148 of the Income-tax Act (for short "the Act") to reopen the original assessment for A.Y. 2010-11 as well as the order of reassessment passed. That the petitioner filed return of income for A.Y. 2010-11 on 15.10.2010 declaring total income of Rs. 2,18,28,610/-. That the said return of income was selected for scrutiny and the Assessing Officer completed the regular assessment under section 143(3) of the Act after issuing/sending detailed questionnaire with notice under section 142(1) and after considering the details submitted by the petitioner in response to the said notice.

1.1 That thereafter, the respondent has issued the impugned notice dated 13.8.2013 under section 148 of the Act for A.Y. 2010-11 to reassess the total income. That in response to the said notice, the petitioner vide letter dated 16.6.2014 requested the Assessing Officer to treat the original return filed on 15.10.2010 as in response to the impugned notice under section 148 of the Act and also supplied copy of reasons recorded for reassessment.

1.2 That thereafter, the Assessing Officer supplied to the petitioner assessee copy of reasons recorded. That the petitioner submitted the objections against reopening of the concluded and completed assessment, which came to be disposed of by the Assessing Officer vide communication dated 13.1.2015. At this stage, the petitioner has preferred the present Special Civil Application under Article 226 of the Constitution of India challenging the impugned notice under section 148 of the Act to reopen the completed assessment for A.Y. 2010-11.

1.3 As during the pendency of the present petition, the Assessing Officer has passed the order of assessment under section 143(3) of the Act, read with section 147 of the Act, the petitioner has also challenged the impugned order of assessment also.

2. Shri Vivek Chavda, for Shri SN Divetia, learned Advocate appearing on behalf of the petitioner has vehemently submitted that the reopening of the assessment for A.Y. 2010-11 is solely on the basis of the audit objection and/or the audit objection by the audit party and therefore, the same is not permissible. It is submitted that therefore, forming opinion by the Assessing Officer that the income has escaped assessment has been vitiated.

2.1 It is vehemently submitted by Shri Chavda, learned Advocate appearing on behalf of the petitioner that though in the objections raised by the petitioner against reopening of the assessment, it was specifically stated that reopening of the assessment is at the instance of the audit party and/or on the audit objections raised by the audit party only, the Assessing Officer while disposing off the objections has not dealt with the same at all.

2.2 It is further submitted that even in the present Special Civil Application though the petitioner has raised the specific ground on the aforesaid, in the affidavit in reply, the respondent has not dealt with the same.

Making above submissions and relying upon the decision of the Division Bench in the case of CIT v. Shilp Gravures Ltd. [2013] 40 taxmann.com 309/[2014] 220 Taxman 382 (Guj.) as well as in the case of Raajratna Metal Industries Ltd. v. Asstt. CIT [2014] 49 taxmann.com 15/227 Taxman 133 (Guj.) (Mag.), it is requested to allow the present Special Civil Application and quash and set aside the impugned reopening of the assessment for A.Y. 2010-11.

3. Present petition is opposed by Shri Pranav G. Desai, learned Advocate appearing on behalf of the Revenue. He has heavily relied upon the affidavit in reply filed on behalf of the respondent.

3.1 Shri Desai, learned advocate appearing on behalf of the Revenue has vehemently submitted that the impugned reopening proceedings to reopen the assessment for A.Y. 2010-11is absolutely just and proper and in consonance w