Mudra Exports Vs DCIT (Allahabad High Court)
Summary: The Allahabad High Court considered a writ petition filed by Mudra Exports challenging reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961 for Assessment Year 2011-12. The petitioner, a partnership firm engaged in export of Iron Ore, had filed its return on 30.09.2011 declaring a loss of Rs.15,830/-. The return was processed through summary assessment proceedings and no scrutiny assessment under Section 143(3) was made. A reassessment notice under Section 148 was subsequently issued on 27.10.2014.
The reasons supplied to the petitioner relied principally upon the third report of the Justice M.B. Shah Commission of Enquiry concerning illegal mining of Iron and manganese ores in Goa. The report referred to alleged large-scale under-invoicing of export prices. In relation to Mudra Exports, the report recorded an export of 36,854 WMT of Iron Ore on 06.04.2010, with an FOB value of Rs.58,21,08,893/- and an FOB rate of Rs.1,579.50 per WMT, and stated that the under-invoicing compared with the average sale FOB price for the same grade and period was 55%. The Assessing Authority consequently stated that the petitioner had indulged in gross under-invoicing amounting to 55%, or Rs.7,11,46,647/-, and that income had escaped assessment to that extent.
