The Revenue has produced the records pursuant to the previous order of the Court.
The petitioner impugns a reassessment notice under Section 148 seeking to reassess the income for AY 2005-06. The assessment had been originally completed under Section 143 (3) of the Act on 26.02.2007. The reasons for the reopening of the assessment indicated by the Revenue's letter of 5.3.2012 are extracted below: -
'The assessment of M/s Denso Faridabad P. Ltd. for the assessment year 2005-06 was completed after scrutiny in December 2007, determining at an income of Rs. 4463970/-. Subsequently, it came to notice that as per 3CD report the assessee during the previous year relevant to assessment year 2005-06, had paid premium to the Life Insurance Corporation on account of gratuity and superannuation amounting to Rs. 97369 and Rs. 507403 respectively pending approval from competent authority. As I have reason to believe that the income chargeable to tax has escaped assessment by virtue of furnishing inaccurate particulars by the assessee accordingly the assessment for the year is hereby reopened.
It also came to notice that the assessee has deducted Rs. 2760868/- in the computation sheet on account of expenditure incurred on leasehold improvement which was capital expenditure and the assessee has claimed depreciation on the same u/s 32 of the Act. Thus, the amount of Rs. 2760868/- was not to be deducted from the computation. As I have reason to believe that the income chargeable to tax has escaped assessment by virtue of furnishing inaccurate particulars by the assessee accordingly the assessment for the year is hereby reopened.'
The petitioner urges that there was no concealment or suppression of material facts in the original return on the issues on which the Revenue has sought to reopen its assessment. It is stated that so far as the payment of premia to LIC for gratuity and superannuation, i.e., being Rs. 97,369 and Rs. 5,07,403/- appropriate responses were given to the queries made by the AO who was satisfied and had permitted such expenditure. It is contended that the other item, i.e., Rs. 27,60,868/- claimed towards lease hold improvements, was claimed as revenue expenditure and an appropriate amount was deducted from the tax depreciation amount. The petitioner also contends that the re-assessment was completed pursuant to the impugned notice without serving the notice or the order rejecting the objections preferred by the petitioner. It is, therefore, submitted that the impugned reassessment notice as well as the fresh assessment pursuant to it are untenable in law.
Learned counsel for the respondents has produced the records. A consideration of the same would reveal that the respondents' claim that notice was served after the reassessment was open is not correct. There is nothing to show that the order dated 4.12.2012 was ever served upon the petitioner. As far as the other aspects are concerned, there is no denial that on both counts, i.e., disclosure of premia paid towards gratuity and superannuation as well as the amount of Rs. 27,60,868/- claimed towards lease hold improvements were in fact the subject matter of an enquiry in the original assessment.
This Court is of opinion that in the given circumstances of the case, there was no fresh or tangible material - the only ground on which reassessment can be made under Section 148 pursuant to the declaration of law by the Supreme Court in Commissioner of Income Tax v. Kelvinator (India) Ltd., 320 ITR 561. Consequently, the impugned reassessment notice and the final order rejecting the objections and the consequential reassessment order made on 8.3.2013 are bad in law; they are hereby quashed and set aside.
The writ petition is allowed in the above terms.