THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 14.02.2013
+ W.P.(C) 4507/2012
E.I. DUPONT INDIA PVT. LTD. AND ANR. ..... Petitioner
versus
THE DEPUTY COMMISSIONER
OF INCOME TAX ..... Respondent
Advocates who appeared in this case:
For the Petitioner : Ms Kavita Jha with Mr Vaibhav Kulkarni, Advocates.
For the Respondent : Mr Abhishek Maratha, Sr. Standing Counsel.
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE R.V.EASWAR
JUDGMENT
BADAR DURREZ AHMED, J (ORAL)
C.M. APPL. No.9341/2012 (for exemption)
Exemption allowed subject to all just exceptions.
The application stands disposed of.
W.P. (C) No.4507/2012 & C.M. APPL. 9340/2012
Mr Maratha, Sr. Standing Counsel seeks another opportunity to file
the counter affidavit. However, we have given sufficient opportunity to
the respondent to file the counter affidavit in this matter. Mr Maratha
W.P. (C) 4507/2012 Page 1 of 5
states that he is handicapped because he has not received any comments
from the department.
2. We, therefore, close the right of the respondent to file the counter
affidavit in this matter.
3. This writ petition is directed against the notice dated 27.03.2012
issued under section 148 of the Income Tax Act, 1961 (hereinafter
referred to as ,,the said Act) p roposing to reopen the assessment for the
assessment year 2005-06. After the receipt of the said notice dated
27.03.2012, the purported reasons behind the issuance of the said notice
were also supplied to the petitioner. Those purported reasons read as
under:
"Reasons for Notice u/s 148 of the IT Act, 1961
The assessment u/s 143(3) of the IT Act in the above
mentioned case for A.Y. 2005-06 was completed in
December 2008 determining total income of `66,47,07,190/-.
On the perusal of the record that pursuant to the scheme of
amalgamation with Ms Liqui Box Liabilities, duties and
obligations Etc. would be transferred and the deficit arising
on account of excess of fair value of net assets taken over as
a part of amalgamation over the face value of shares issued
under the scheme should be treated as Goodwill/ Capital
Reserve in accordance with the scheme of amalgamation.
Accordingly `2,87,90,431/- being the difference between
consideration and the net value of identifiable assets
W.P. (C) 4507/2012 Page 2 of 5
acquired, after adjustments was treated as Reserve. As, the
assessee had received the benefit of `2,87,90,431/- from the
scheme of amalgamation, the same would be offered for tax
as business Income. By doing so, the assessee has not
disclosed the total income correctly to the extent of
`2,87,90,431/-.
Based on the above facts, I have reason to believe that
the income of the assessee chargeable to tax to the extent of
`2,37,90,431/- has escaped assessment."
4. In response to the said notice and purported reasons, the petitioner
submitted its objections by virtue of its letter dated 08.05.2012. An
opportunity of hearing was also granted to the petitioner whereupon the
assessing officer passed an order on 31.05.2012 rejecting the objections.
5. In the reply submitted by the petitioner it had been categorically
stated that the proposed proceedings were hit by the first proviso to
section 147 of the said Act which specifically laid down that, in case an
assessment has already been made under section 143(3) of the said Act,
in order to reopen the said assessment after the expiration of four years
the assessing officer has to necessarily demonstrate that there was failure
on the part of the assessee to disclose the facts and particulars necessary
for the assessment. However, this contention of the petitioner was
W.P. (C) 4507/2012 Page 3 of 5
brushed aside by the assessing officer in the order dated 31.05.2012 by
simply stating as under: -
"The objection raised by the assessee has been considered
but are found to be not tenable. The assessment in the case
of assessee has been completed u/s 143(3) of the Act at total
income of `66,47,07,190/- on December 2008. However, on
perusal of records it was observed that assessee has failed to
disclose its income fully and truly resulting in under
assessment. Accordingly notice u/s 148 was issued on
27.03.2012 after obtaining prior approval of Ld. CIT vide
dated 15.03.2012."
6. We have heard the learned counsel for the parties and we feel that
since this was a case of proposed reopening of assessment after four years
from the end of the relevant assessment year it was incumbent upon the
assessing officer to demonstrate that there was failure on the part of the
assessee to fully and truly disclose all material facts necessary for its
assessment. The purported reasons which we have extracted above do
not even allege that there has been a failure on the part of the assessee to
disclose any material fact. In fact, even in the impugned order dated
31.05.2012 there is no mention of what fact the assessee had failed to
disclose which was necessary for the assessment in the original round of
assessment. Failure to disclose all material facts necessary for
assessment is a condition precedent for reopening of an assessment
W.P. (C) 4507/2012 Page 4 of 5
beyond the period of four years from the date of assessment. This is a
pre-condition set out in the statute itself.
7. In view of the fact that this pre-condition has not been satisfied, we
feel that the impugned notice dated 07.03.2012 as also the order dated
31.05.2012 ought to be set-aside. It is ordered accordingly. All the
proceedings pursuant to the notice dated 27.03.2012 are quashed. The
writ petition is allowed. There shall be no order as to costs.
Consequently, all the pending applications also stand disposed of.
BADAR DURREZ AHMED, J
R.V.EASWAR, J
FEBRUARY 14, 2013
hs
W.P. (C) 4507/2012 Page 5 of 5
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