Cadila Healthcare Ltd Vs. ACIT (Gujarat High Court)- Assessing Officer was of the opinion that no part of the income of the assessee has escaped assessment. In fact, after the audit party brought the relevant aspects to the notice of the AO, she held correspondence with the assessee. Taking into account the assessee’s explanation regarding non-requirement of TDS collection and ultimately accepted the explanation concluding that in view of the Board’s circular, tax was not required to be deducted at source. No income had therefore escaped assessment. Despite such opinion of the Assessing Officer, when ultimately the impugned notice came to be issued the only conclusion we can reach is that the Assessing Officer had acted at the behest of and on the insistence of the audit party.
It is well settled that it is only the Assessing Officer whose opinion with respect to the income escaping assessment would be relevant for the purpose of reopening of closed assessment. It is, of course true, as held by the decisions of the Apex Court in the case of P.V.S .Beedies Pvt. Ltd. (supra) and Indian & Eastern Newspaper Society (supra), if the audit party brings certain aspects to the notice of the Assessing Officer and thereupon, the Assessing Officer forms his own belief, it may still be a valid basis for reopening assessment. However, in the other line of judgement noted by us, it has clearly been held that mere opinion of the Audit Party cannot form the basis for the Assessing Officer to reopen the closed assessment that too beyond four years from the end of relevant assessment year.In the present case, the Assessing Officer had categorically come to the conclusion that the objection of the audit party is not valid and that the assessee’s explanation with respect to non-requirement of collection of TDS was required to be accepted. In that view of the matter, we have no hesitation in striking down the notice for reopening. Consequently, the order rejecting the objections of the petitioners must also go. In the result, the petition is allowed.
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION No. 15566 of 2011
CADILA HEALTHCARE LTD – Petitioner(s)
Vs
ASST. COMMISSIONER OF INCOME- TAX(OSD) & 1 – Respondent(s)
Date: 14/12/2011
