Unique Tags Private Ltd Vs ACIT (Gujarat High Court)
The Gujarat High Court in Unique Tags Private Ltd v. ACIT quashed a reassessment notice issued under Section 148 of the Income Tax Act, 1961, and the consequent order passed under Sections 144 and 147, holding that the reopening was beyond jurisdiction as there was no failure by the assessee to disclose material facts fully and truly during the original assessment.
Read HC Judgment: Reopening for Depreciation Claim: SC Dismisses Revenue Appeal Over Delayed Filing
The petitioner, engaged in manufacturing woven labels and generation of power, filed its return for AY 2011–12 declaring an income of ₹85.99 lakh and claimed depreciation, including additional depreciation under Section 32(1)(iia). The case was scrutinized, and assessment was completed under Section 143(3) on 11 October 2013 after detailed verification of the petitioner’s claim for depreciation and additional depreciation. The Assessing Officer (AO) issued a notice under Section 148 on 19 February 2018—beyond four years from the end of the relevant assessment year—alleging excess allowance of depreciation of ₹37.54 lakh, including ₹33.41 lakh on a windmill and smaller sums on air-conditioning systems, contending that additional depreciation for power-generation assets was permissible only from AY 2013–14 as per the Finance Act, 2012.
The petitioner argued that all material facts had already been disclosed in the tax audit report, statements showing additions to fixed assets, and justification for additional depreciation submitted during the original scrutiny. The AO had consciously examined and accepted the claim in the 2013 assessment. Hence, the reopening amounted to a “mere change of opinion,” not supported by any fresh tangible material. It was further contended that the reopening beyond four years was barred under the proviso to Section 147, since there was no failure to disclose fully and truly all material facts necessary for assessment.
The petitioner also highlighted that despite an interim order of the High Court (dated 27 November 2018) restraining the AO from passing the final order without the Court’s permission, the AO proceeded to pass the reassessment order on 20 November 2018 and dispatched it later on 2 December 2018, allegedly in disregard of the Court’s directions.
The Revenue defended the reopening, arguing that:
