The only reason which has been given seeking reopening of the assessment for the years 1997- 98 and 1998- 99 is that suppression of sales have taken place on account of the fact that when average price of the closing stock is multiplied with the quantity of the sales in the year then the value of the sales would be at a higher figure than that as declared by the assessee. Clearly, there is no new material which is alleged to have come to the notice of the AO which has caused him to seek reopening of the assessment.
Admittedly, the reasons given for seeking reopening of the assessment contains the expression ‘perusal of the case record reveals’ clearly showing that it is on the basis of the same assessment record as was filed by the assessee, during the relevant assessment years and also scrutinised by the AO before passing the orders under s. 143(3) is the basis for seeking reopening of the assessment. Further the new logic, rationale and opinion which has been formed by the AO for seeking re-opening of the assessment is nothing but a change of opinion and a new approach to the existing facts and material which the AO could well have done during the regular assessment proceedings of the relevant assessment years. Not only this, the rationale/ logic/ reasons given that sale price of stocks during the entire assessment year would remain constant is something which is confounding. It cannot stand to reason that the price of sale of paddy/ rice/ pulses remained constant throughout the year so that on the basis of an average price of the closing stock the sale price for the entire year comprising of 12 months, 48 weeks and 365 days can be ascertained in that the same would have remained fixed throughout this period. Even assuming that this logic is correct, it was surely an exercise which the AO could have done on the basis of materials which he is now presently seeking to do because the same very materials were available to him in the relevant assessment years and merely because the AO feels that he has failed to do what he ought to have done cannot be a valid ground for seeking initiation of reassessment under s. 147.
So far as the issue of claiming depreciation on tarpaulin is concerned the counsel has referred to the correspondence specifically entered into in this behalf in the relevant asst. yr. 1999- 2000 and particularly the letter dt. 22nd Feb., 2002 which specifically mentions a note with respect to the claim of depreciation on tarpaulin. The said note on the claim for depreciation for tarpaulin clearly gives the reason that life of these tarpaulin covers are subject to elements such as dust, rain and sun and consequently 100 per cent depreciation is claimed because they get torn on account of frequent use. With regard to the asst. yr. 2000-01, the counsel for the petitioner has referred to a specific letter dt. 22nd March, 2002 whereby a specific note with regard to delay in payment of provident fund was given to the AO. All the aforesaid arguments and the documents relied upon by the counsel for the petitioner along with reasons given for seeking reopening of the assessment under ss. 147/148 make it more than abundantly clear that in all the aforesaid assessment years the reasons refer not to any concealment of facts whatsoever but in fact reasons given have simply relied upon the record which was already available before the AO while completing the assessment proceedings under s. 143(3). Not only this, it is quite clear that the very aspect of deduction under s. 80 HHC and s. 80-IA means that entries with respect to claims of deductions towards expenditure whether towards PF/ESI or the valuation of the stock was very much considered by the AO for considering the claim of the assessee under s. 80HHC and s. 80-IA in the relevant assessment years. It is not therefore as if any new material has come on record or that there was bulk material and in respect of which some material could not have been considered by AO. Surely an obvious thing would have been and in fact has been duly considered by the AO such as valuation of stock and allowing of the claim of expenditure/ contribution towards PF and ESI. Once all these aspects were considered and also ought to have been considered from the obvious material available on record which was duly done by and brought to the notice of the AO, there is no scope for reassessment proceedings under s. 147 by issuing of notice under s. 148 thereof. Therefore, the impugned notices under s. 148 are quashed and the respondents are prohibited from framing any reassessment under the provisions of ss. 147/148 on the basis of the reasons recorded as above stated and the impugned notice. The petitions are allowed with costs quantified at Rs. 25,000 for each writ petition.