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

JUDGMENT :

BHARGAV D. KARIA, J.

Heard learned advocate Mr.B.S.Soparkar for the petitioner and learned Senior Standing Counsel Mr.Varun K. Patel with learned advocate Mr.Dev D. Patel for the respondents.

1. Rule, returnable forthwith. Learned Senior Standing Counsel Mr.Varun K. Patel waives service of notice of rule for and on behalf of the respondents.

2. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 27th March, 2021 for re-opening of the assessment for the 2014- 15 issued under Section 148 of the Income Tax Act, 1961 (for short ‘the Act’).

3. The brief facts of the case are as under :

3.1. The petitioner filed its original return of income for the Assessment Year 2014- 15 on 28th November, 2014 declaring total income of Rs.3,23,95,810/-. Thereafter the case of the petitioner for the Assessment Year 2014-15 was selected for scrutiny, detailed scrutiny was undertaken and notice under Section 142(1) of the Income Tax Act, 1961 (for short ‘the Act’) dated 26th April, 2016 was issued asking inter-alia specific details relating to disallowance in accordance with Rule 8D read with Section 14A of the Act as well as the depreciation claimed by the petitioner on various assets.

3.2. The petitioner replied to the said notice in part on 30th August, 2017 and as such, further notice was issued to the petitioner seeking further details which were provided by the petitioner vide letter dated 20th November, 2017.

3.3. Thereafter, the Assessing Officer passed an Assessment Order under Section 143(3) read with Section 144C of the Act for Assessment Year 2014-15 on 28th December, 2017 assessing total income of the petitioner at Rs.6,69,69,760/- under normal provisions and book profit at Rs. 17,29,38,070/- and also made disallowance Rs.2,72,88,280/- under Section 14A of the Act.

3.4. The respondent No.1 issued the impugned notice under Section 148 of the Act dated 27th March, 2021 asking the petitioner to file return of income for Assessment Year 2014-15. In compliance of the notice issued under Section 148 of the Act dated 27th March, 2021, the petitioner filed its return of income and sought for the reasons recorded for reopening.

3.5. A copy of the reasons recorded for reopening was provided to the petitioner vide letter dated 17.05.2021 and thereafter, the petitioner filed the objections on 31st May, 2021 challenging the validity of the notice issued under Section 148 of the Act.

3.6. The respondent No.2 thereafter issued the notice under Section 142(1) of the Act dated 17th December, 2021 asking various details in connection with assessment instead of passing any order and disposed of the objections.

3.7. The petitioner thereafter, vide letter dated 31st December, 2021 requested the respondent No.2 to pass a speaking order disposing of the objections. The respondent No.2 thereafter passed the impugned order dated 15th January, 2022 disposing of the objections. Being aggrieved and dis-satisfied, the petitioner has preferred this petition.

4. The reasons recorded by the Assessing Officer can be summarised as under :

“2. Brief details of Information collected/received by the AO:

On perusal of the assessment records for the year under consideration, it is noticed the assessee has claimed depreciation of Rs.41,46,74,708/- which include additional depreciation of Rs.3,70,97,978/- on pollution treatment plant.

2.1 On verification of 3CD report, the auditor in column no.22 reported that interest inadmissible u/s. 23 of Micro, Small & Medium Enterprise Act is of Rs.44,80,949/-.

2.2 It is further verified that while working out disallowance u/s. 14A of the Act the expenditure by way of interest is taken at Rs.19,47,87,211/- instead of Rs.33,28,98,762/- debited in the P&L A/c.

3. Analysis of information collected/received:

From the records, it is verified that assessee has wrongly claimed additional depreciation of Rs.3,70,97,978/- u/s. 32(1)(iia) of the Act on pollution treatment plant which is not used