Case Law Details
Tata Sons Limited Vs DCIT (Bombay High Court)
Bombay High Court find substance in the submission of Mr.Pardiwalla that the case at hand is nothing but an instance of mere change of opinion. A bare perusal of the reasons indicates that the exercise was infuenced by a mere change of opinion. To start with, it is imperative to note that the Assessing Officer has commenced the recording of reasons with the expression, “On perusal of records, it is seen that 10% of the eligible profits under section 10A were not fully taxed and yet, set off of the losses of local units to the extent of Rs.54,27,79,336/- was allowed and this resulted in short levy of tax.” Evidently, this assessment of the Assessing Officer betrays an intent to question the original assessment on the strength of very same material, by substituting his view for the conclusion recorded by the Assessing Officer at the time of initial assessment.
The alleged escapement of the income articulated under second head “Correct computation of Business Income” also suffers from the same vice of mere change of opinion. The third head under which the income allegedly escaped assessment, under the caption, ‘Excess DIT Relief’ stands on a much weaker foundation. The Assessing Officer explicitly refers to the availability of two options for computation of deduction under section 10A and 80 HHE, namely, (i) exclusive method; and (ii) alternatively, profit of 10A units shall form part of calculation of 80 HHE and export turnover of 10A is to be excluded therefrom. According to the Assessing Officer, the choice of the second method by the department resulted in escapement of income as excess DIT relief to the extent of Rs.3,67,31,204/- had been allowed. This inference is a classic example of change of opinion as it is rooted in expediency of exercise of one option over another.
The conspectus of the aforesaid consideration is that the impugned notice and the consequent action is legally unsustainable as the Revenue fails to satisfy the twin tests. Firstly, there is no assertion, much less material to indicate, that the income escaped assessment on account of failure on the part of the petitioner to disclose fully and truly all material facts necessary for the assessment, and, secondly, the reasons recorded by the Assessing Offcer should not fall within the ambit of “mere change of opinion” on the very same material. Consequently, we are persuaded to hold that there was no material to justify the formation of a reason to believe that income escaped assessment and invoke the power under section 147 of the Act, 1961. The petition, therefore, deserves to be allowed.
FULL TEXT OF THE JUDGMENT/ORDER of BOMBAY HIGH COURT
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