Wp 9456 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.9456/2010 Shell India Markets Pvt.Ltd. Petitioner VS. The Union of India & Ors. Respondents Mr.P.J.Pardiwala ,Sr.Counsel a/w Mr.Prakash Shah i/b PDS Legal for Petitioner Mr.Suresh Kumar for Res. CORAM- J.P.DEVADHAR ,AND MRS.MRIDULA BHATKAR,JJ. DATE -31st JANUARY,2011. P.C. . Heard. 2 Rule. Returnable forthwith. By consent of the parties the petition is taken up for final hearing. 3 The petitioner has challenged the notice issued under section 148 of the Income Tax Act, 1961 dated 10/3/2010 whereby the assessment for the assessment year 2003-2004 is sought to be reopened. Wp 9456 2 4 Reasons recorded for reopening the assessment read thus - The Assessee Company has filed its return of income on 28/11/2003 declaring net loss of Rs.11,97,71,170/-.The assessment was completed u/s 143(3) of the Act on 30.11.2005 ,determining the net loss at Rs.10,24,36,745/- . However, while passing the assessment order, the book profit assessable u/s 115JB of the Act has not been determined .Further, the book profit determined by the assessee which has been considered in ITNS 150A has not been properly determined by the Assessee. Also, while computing the book profit the assessee failed to add back the provisions made for doubtful debts of Rs.2,12,19,017/- and fixed assets written off of Rs.96,40,997/- to the net profit to drive at the adjusted book profit as per clause (i) to Explanation 1 to sub-section 2 of section 115 JB of the Income Tax Act, 1961,which has been introduced by Finance (No.2) Act, 2009 w.r.e.f.01.04.2001 .Thus, the book profit of the assessee has been under assessed to the tune of Rs.3,08,60,014/- and consequent short levy of tax of Rs.32,44,351/- including interest of Rs.8,14,125/0 u/s 234 B of the Act. I have therefore, reason to believe that income to the tune of Rs.3,08,60,014/- has escaped assessment for not including the aforesaid provisions in determining the book profit shown by the assessee. Therefore, I have every reason to believe that the failure on the part of the assessee to disclosure fully and truly all material facts necessary for the assessment, within the meaning of the provisions of Sec.147 alongwith explanation 2(c) to section 147 of the I.T.Act .This is therefore, a fit case for issue of notice u/s 148 of the I.T.Act, 1961. Wp 9456 3 5 From aforesaid reasons recorded by the Assessing Officer, it is evident that the assessment is sought to be re- opened solely on the ground that Section 115 JB of the Act has been retrospectively amended by Finance (No 2) Act 2009 as a result whereof amounts set aside as provision for diminution in value of any asset is required to be added back while computing the book profit u/s. 115 JB of the I.T.Act 1961. 6 Since the assessment in the present case is sought to be reopened beyond four years from the end of the relevant A.Y. the question that is to be considered is , whether there was any failure on the part of the assessee to disclose fully and truly all material facts. As per the proviso to Section 147 of the Income Tax 1961, the assessment beyond the period of four years can be re- opened only if there is failure on the part of the assessee to disclose fully and truly all material facts necessary for Wp 9456 4 the assessment. It cannot be said that the retrospective amendment to Section 115 JB of the Act, constitutes failure on the part of the assessee to disclose fully and truly all mater ial facts. If there is no failure to disclose fully and truly all material facts, then, concluded assessment orders passed under Section 143(3) of the Act cannot bereopened beyond the period of four years from the end of the relevant assessment year. 7 In this view of the matter, in the present case, re- opening of assessment beyond four years from the end of the relevant assessment year cannot be sustained. Accordingly rule is made absolute by quashing the Notice dated 10/3/2010 issued u/s. 148 of the Income Tax Act. Since the notice issued u/s 148 of the Income Tax Act is quashed the reassessment order passed on 15/11/2010 shall also stand cancelled. No order as to costs. (MRS.MRIDULA BHATKAR,J) (J.P.DEVADHAR,J) Wp 9456 5