Hcl Corporation Limited v. Assistant Commissioner of Income Tax

BADAR DURREZ AHMED, J VEENA BIRBAL, J DECEMBER 07,2011 kb

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on 07.12.2011 + W.P.(C) 8475/2010 HCL CORPORATION LIMITED … Petitioner versus ASSISTANT COMMISSIONER OF INCOME-TAX & ANR .. Respondents Advocates who appeared in this case: For the Petitioner : Mr Ajay Vohra, Adv. with Ms Kavita Jha, Mr Amit Sachdeva and Mr Somnath Shukla, Advocates For the Respondent : Ms Suruchi Aggarwal CORAM: HON'BLE MR. JUSTICE BADAR DURREZ AHMED HON'BLE MS. JUSTICE VEENA BIRBAL BADAR DURREZ AHMED (ORAL) 1. The present writ petition is in respect of the assessment year 2004-05. The petitioner is aggrieved by the fact that the assessment in respect of the said assessment year is sought to be re-opened by the Assessing Officer by invoking the provisions of section 147 of the Income Tax Act, 1961 (hereinafter referred to as the 'said Act'). 2. By virtue of the present writ petition, the petitioner is seeking the quashing of the notice dated 30.03.2010 issued under section 148 of the said Act and also the quashing of all proceedings initiated pursuant thereto including the order dated 13.12.2010 passed by the Assessing Officer whereby he rejected the objections to the re-opening of the assessment filed on behalf of the petitioner/assessee. 3. The original assessment under section 143 (3) was completed on 17.07.2006. The notice under section 148 of the said Act was issued by the Assessing officer on 30.03.2010 and the reasons thereof are also dated 30.03.2010. The reasons were communicated to the petitioner/assessee on 07.12.2010. The petitioner filed his objection on 10.12.2010 and the impugned order rejecting the objection was passed on 13.12.2010. We may also point out that by virtue of the order dated 20.01.2010 passed in the present proceedings this court had stayed further proceedings and therefore the Assessing Officer was prevented from passing an assessment order pursuant to the re-opening of the assessment. 4. Mr Vohra, appearing on behalf of the petitioner essentially made two submissions. His first submission was that the notice under section 148 was beyond the period of four years and was therefore time barred. His second submission was that even if we ignore the fact that the re-opening was itself barred by time it cannot be sustained because it was occasioned by a mere change of opinion. He submitted that the Assessing Officer in the first round had examined all the details which had been filed by the assessee and it was only after examining all other information which the assessee was required to furnish that the assessment order was passed. Mr Vohra further submitted that the sole issue for consideration was the extent of the expenses which was incurred in relation to earning exempt income in the backdrop of section 14-A of the said Act. He submitted that the assessee had disclosed that it has incurred a sum of Rs. 54,31,565/- towards the portfolio management scheme and a further sum of Rs. 8,10,000/- towards depository charges which were the sum total of expenses incurred towards earning the exempt dividend income of Rs. 195,19,82,701/-. And, the assessee itself had excluded these expenses from the claimed expenditure. 5. Consequently, it was submitted by Mr Vohra that first of all there was a full and true disclosure of the expenses incurred towards earning dividend income which was exempted in the year in question and that there was no other expenditure incurred in respect of earning that income. He submitted that this being the position, the bar of four years clearly applied and since the notice under section 148 of the said Act was admittedly issued on 30.03.2010 i.e., beyond the four years from the end of the assessment year in question, there would be no occasion for re-opening the assessment as the same was barred by law. In any event, he submitted that a mere change of opinion could not be a ground for re- opening an assessment as has been held by the Supreme Court in the case of CIT v. Kelvinator of India Ltd: 320 ITR 561