Ashapura Minichem Limited Vs DCIT (ITAT Mumbai)
The issue under consideration is whether the re-opening of assessment u/s 147 is justified in law?
The assessee before us is a listed public limited company engaged in the business of mining bauxite and selling the same in domestic as well as international market. In the present case the Assessing Officer re-opened the assessment under section 147 and 148 of the Income Tax Act, 1961 on the basis of the report of Justice M B Shah Commission.
ITAT states that the material facts of the present case being identical in as much as the reopening, beyond any doubt or controversy, is entirely based on the Hon’ble Justice M B Shah Commission report. As a plain look at the reasons recorded for reopening the assessment, as also for the approval by the Additional Commissioner of Income Tax, the only basis for reopening of the present assessment, as in the judgment cited above, was report submitted by Hon’ble Justice M B Shah Commission report. Further ITAT states that, it is for the Assessing Officer to form an opinion as to whether there was escapement of income from assessment and whether such escapement occurred from failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year; and it is for him to put his opinion on record in black and white. The reasons recorded must disclose his mind and they should be self-explanatory.
Hence, by following the binding judicial precedent, extracts from which are extensively reproduced above, ITAT hold that the reasons recorded by the Assessing Officer, is unsustainable in law. Therefore, quash the reassessment proceedings.
FULL TEXT OF THE ITAT JUDGEMENT
1. This appeal, filed by the assessee, is directed against the order dated 4th October 2017 passed by the CIT(A) in the matter of assessment under section 143(3) r.w.s. 147 of the Income Tax Act, 1961, for the assessment year 2011–12.
2. In the first ground of appeal, grievance of the appellant, in substance, is that the learned CIT(A) erred in “confirming the order of the Assessing Officer in respect of reopening the assessment, particularly when the Assessing Officer had no reason, to believe that any income chargeable to tax has escaped the assessment, except communication from Director General of Income Tax (Investigation) Kolkata to the effect that Hon’ble Justice M B Shah Commission has determined that the appellant has under invoiced the export of iron core to the extent of Rs 11,04,27,609”
3. To adjudicate upon this appeal, only a few material facts need to be taken note of. The assessee before us is a listed public limited company engaged in the business of mining bauxite and selling the same in domestic as well as international market. The assessee had filed an income tax return disclosing total loss of Rs 509.11 crores whereas the assessment under section 143(3) was completed at an assessed income of Rs 56.15 lakhs, which after setting off the brought forward losses of earlier years, resulted in a NIL income. The matter, however, did not end here. On 15th October 2015, however, the Assessing Officer recorded the following reasons to reopen the assessment:-
Ashapura Minechem Ltd is assessed to tax under the jurisdiction of this office. The return of income for A.Y. 2011-12 was filed on 29.09.2011 at a total loss of Rs. 5,09,11,18,104. The assessment was completed on 28.03.2014 at a total income of Rs. 56,15,41,962 and after setting off b/f losses of earlier total income became Nil. The total income for the tax purposes was determined at Rs. 55,02,40,678 u/s 155JB of the Income Tax Act. The assessee’s appeal against the assessment order was disposed of by learned CIT(A) on 31.08.2015.
A communication dated 17.7.2014 received from the office of Director General of Income tax (Inv.) Kolkata stated that a commission headed by Retd. Supreme Court Justice M.B. Shah was set up to detect illegal mining activities on iron ore and manganese ore in the States of Odisha, Jharkhand and Goa. The committee has submitted its report and it was noticed that one of the assessee of this charge M/s Ashapura Minechem Ltd. PAN: AAACA0957F has conducted illegal/unaccounted mining activity in various F.Ys.
Retd. Justice M.B. Shah commission report is also available on the website of Ministry of Mines, Govt. of India. It is noticed that in the said report the commission has summarized the under invoicing of the export of iron ore from the State of Goa:
