IMPORTANT POINT
Reopening of assessments under the Income Tax Act requires new material facts; mere change of opinion is insufficient.

JUDGMENT :

(Niral R. Mehta, J.) :

1. By way of this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 18.03.2020 under section 148 of the Income Tax Act,1961 [for short ‘the Act’] whereby, the Income Tax department has sought to reopen the assessment of the petitioner for the Assessment Year 2013- 14.

2. Brief facts of the case as can be stated from the memo of the petition are as under:

2.1 The petitioner was engaged in the business of manufacturing sprinklers and drip irrigation system, P.P.Ball valves, HDPE pipes and execution of turnkey projects for the relevant Assessment Year 2013-14. It is the case of the petitioner that for the purpose of Companies Act, the annual accounts for the period from 01.04.2012 to 30.06.2013 was prepared. As per the balance-sheet as on 30.06.2013 ‘Other Current Assets” of the petitioner was shown aggregating to Rs. 8,07,13,133/- and for sake of brevity, the break up of the same was given in ‘Note 17’.

2.2 Income of the petitioner in the aforesaid annual accounts also included the following income:

2.3 For the purpose of Income Tax Act,1961, annual accounts were prepared for the period from 01.04.2012 to 31.03.2013. The petitioner filed return of income for the year under consideration on 29.11.2013 declaring total income at Rs. 6,38,41,415/-.

2.4 The case of the petitioner was selected for scrutiny assessment. The then Assessing Officer vide notice dated 10.07.2015 called upon the petitioner to furnish various details including the details pertaining to export sale as well as benefit availed in the form of duty drawback, duty of customs or central excise repaid and repayable, cash assistance under section 28(iiia)/(iiib)/(iiic).

2.5 The petitioner vide letter dated 24.07.2015 furnished various details including the details of export sales as well as details of benefits of Rs. 35,16,397/- in the Form of duty drawback and cash assistance under section 28(iiia)/(iiib)/(iiic) of the Act.

2.6 Vide letter dated 07.01.2016, the petitioner also furnished details of interest income along with ledgers.

2.7 Considering the aforesaid, the then Assessing Officer decided not to disturb returned income of the petitioner while framing assessment under section 143(3) of the Act vide its order dated 21.03.2016.

2.8 Thereafter, the notice under section 148 dated 18.03.2020 came to be issued by the revenue seeking inter alia to reopen the case of the petitioner for the year under consideration.

2.9 Pursuant to the aforesaid notice, the petitioner filed return of income on 04.06.2020 and further requested to supply copy of reasons recorded for reopening the case for the year under consideration. The respondent in furtherance thereto, supplied copy of reasons recorded vide its letter dated 21.10.2020.

2.10 The petitioner raised objections against reopening somewhere in November,2020 with all factual and legal contentions. However, the respondent vide its order dated 10.02.2021 disposed of such objections and held that reopening is justified.

2.11 Being aggrieved and dissatisfied by the aforesaid, the petitioner has approached this Court by way of this petition for the appropriate writ, direction or order.

3. We have heard learned Senior Advocate Mr. Tushar Hemani with learned advocate Ms. Vaibhavi Parikh for the appellant and learned advocate Mr. Rudram Trivedi for learned advocate Ms.Kalpana Raval for the respondent.

4. Learned Senior Advocate Mr. Hemani for the petitioner submitted that the reopening of the assessment at the instance of the Revenue is beyond the period of four years that too, in absence of any failure on the part of the petitioner to disclose full and true di