Vodafone Essar Gujarat Ltd. vs Assistant Commissioner of Income Tax

K.A. Puj, J.—Rule. Mrs. Mauna M. Bhatt, learned standing Counsel waives service of rule on behalf of the respondent. With the consent of

the parties, the matter is taken up for final disposal today itself.

The petitioner has filed this petition under Article 226 of the Constitution of India praying for quashing and setting aside the notice of reopening

issued by the respondent on 16th March, 2009 for asst. yr. 2004-05 on the ground that the income has escaped assessment within the meaning of

Section 148 of the IT Act, 1961.

This Court has issued notice on 7th Dec, 2009. Pursuant to the notice, Mrs. Mauna M. Bhatt, learned standing Counsel appeared and placed

on record the affidavit-in-reply of the respondent.

Heard Mr. S.N. Soparkar, learned senior Counsel appearing for the petitioner and Mr. M.R. Bhatt, learned senior Counsel appearing for the

respondent.

It is the case of the petitioner that the petitioner filed its original return of income on 30th Oct., 2004 declaring therein total income at Rs.

4,51,49,320 under the normal provisions of the Act and Rs. 14,28,27,830 under the provisions of Section 115JB of the Act. The case of the

petitioner was selected for scrutiny assessment and assessment was framed on 29th Dec, 2006 u/s 143(3) of the Act determining the total income

at Rs. 1,015.74 lacs and Rs. 9,100.10 lacs u/s 115JB respectively. Being aggrieved by the said order, the petitioner filed an appeal before the

CIT(A) who vide his order dt. 30th Oct., 2007 disposed of the said appeal. While disposing of the said appeal, the learned CIT(A) decided the

point at issue against the petitioner. The Asstt. CIT passed an order on 24th Jan., 2008 giving effect to the order passed by the CIT(A) wherein he

has observed that the unabsorbed loss/depreciation according to the books has already been exhausted in asst. yr. 2003-04 only. Therefore, no

unabsorbed loss/depreciation remains that can be reduced from the book profits for the computation u/s 115JB for asst. yr. 2004-05.

Being aggrieved by the order passed by the learned CIT(A), the petitioner filed an appeal before the Tribunal and the Tribunal disposed of the

said appeal on 20th Feb., 2009. The notiee for reopening of the year under consideration was issued on 16th March, 2009. The petitioner applied

for reasons recorded which were supplied to the petitioner. From the perusal of the reasons, it appears that the assessment was reopened on the

ground that even though the provisions u/s 79 were made applicable for working out MAT (Minimum Alternate Tax) u/s 115JB, brought forward

business loss and unabsorbed depreciation amounting to Rs. 1,336.15 lacs were adjusted to determine book profit at Rs. 9,100.10 lacs, resulting

in an underassessment of income of Rs. 1,336.15 lacs. The petitioner vide his letter dt. 24th Aug., 2009 raised various objections, both on

jurisdiction and merits and requested the respondent to drop the reassessment proceedings. The said objections were disposed of by the

respondent vide order dt. 16th Nov., 2009. The petitioner thereafter filed the present petition before this Court challenging the notice of reopening.

While disposing of the objections, the learned Asstt. CIT has observed that the decision of the Tribunal was received by the Department after

issuance of the reopening notice. The fact still remains that the original order passed by the learned Asstt. CIT was merged into the order of the

CIT(A). The CIT(A) has considered this claim and order giving effect was passed wherein this very issue was considered. It is altogether a

different thing that the order passed by the CIT(A) was reversed by the Tribunal on this issue. However, if the Department had any grievance

against the order of the Tribunal, the Department should have filed tax appeal before this Court challenging the said order. It could not give any rise

to the reopening of the assessment as there is no failure or omission on the part of the petitioner nor it can be said that there is change of opinion.

Since the learned Asstt. CIT has no jurisdiction to reopen the assessment as the conditions precedent laid down u/s 147 are not satisfied, we

quash and set aside the notice under challenge and allow this petition. Rule is made absolute without any order as to costs.