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Case Law Details

Case Name : Metal Alloys Corporation Vs Assistant Commissioner of Income Tax (Gujarat High Court)
Appeal Number : Special Civil Application No. 17846 Of 2011
Date of Judgement/Order : 26/07/2012
Related Assessment Year :

HIGH COURT OF GUJARAT

Metal Alloys Corporation

versus

Assistant Commissioner of Income Tax

SPECIAL CIVIL APPLICATION NO. 17846 OF 2011

Date of Pronouncement – 26.07.2012

ORDER

V.M. Sahai, J.

Though the writ petition is listed for admission, with the consent of learned counsel for the parties, we have taken the writ petition for final disposal.

2. Rule. We have heard Mr. Bandish Soparkar holding brief for Mrs. Swati Soparkar, learned counsel for the petitioner and Mr. Pranav G. Desai, learned counsel appearing for the respondents.

3. This writ petition has been filed challenging the notice dated 06.08.2010 issued by the Assistant Commissioner, Income Tax Circle II, Jamnagar to the petitioner that for the assessment year 2007-08 the income chargeable to tax has escaped assessment which is the meaning of section 147 of the Income Tax Act, 1961 (for short `the Act’). Reasons for reopening the assessment order dated 14.10.2008 were mentioned by the Assessing Officer, which was served on the petitioner on 09.11.2011.

4. It is well settled that the assessment order can be reopened within a period of four years if some new material is discovered or the assessee has concealed or suppressed some material relevant to the assessment year or he has failed to disclose the material relevant to the assessment year. The assessee has filed his return on 25.10.2007 which was processed under section 147(1) of the Act on 14.10.2008 accepting the total income at Rs. 38,88,083/-. The assessee has framed deduction under section 10B of the Act at Rs. 1,60,55,803/- and the same was restricted to the tune of Rs. 1,57,57,803/- for the assessment year 2007-08. According to the Assessing Officer as mentioned in his reasons, the irregular deductions were allowed which was against the provisions of section 10B(2) of the act and therefore, the assessee was not entitled for deduction under section 10B of the Act.

5. During the course of assessment proceedings the Income Tax Officer has raised certain queries with regard to deductions, which were replied by the assessee and the in the assessment order in paragraph no.4.1 the Assessing Officer has dealt with the question of grant of deduction and has allowed deductions. In our opinion, the reasons given for reopening the assessment and the notice issued under section 148 of the Act is nothing, but a change of opinion. It is not the case of escape assessment as nothing was concealed by the assessee nor he has failed to furnish the material relevant to the assessment year before the Assessing Officer. For the aforesaid reasons, notice issued under section 148 of the Act deserves to be quashed.

6. In the result, this writ petition succeeds and is allowed. Notice dated 06.08.2010 issued under section 148 of the Income Tax Act, 1961 to the petitioner by the Assistant Commissioner of Income Tax Circle II, Jamnagar for the assessment year 2007-08 is quashed. Parties shall bear their own costs.

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