Relief to Coca-Cola: Bombay HC quashes Notice for Reopening of Assessment as it was beyond 4 years from the end of Assessment Year [Read Order]

In a major relief to the Coca Cola India, the Bombay High Court quashed the notice for reopening of assessment as it was beyond 4 years from the end of Assessment Year.

The Petitioner is a Company engaged in the business of manufacture and sale of non-alcoholic beverage bases and beverages made out of such bases. With a view to reorganize its business so as to achieve certain commercial advantages, petitioner filed in this Court an application under Sections 391 to 394 of the Companies Act, 1956 whereby it had sought sanction for the transfer of its bottling manufacturing undertaking in Pune and Goa to a company Hindustan Coco-Cola Beverages Private Limited (HCCBPL).

After expiry of 4 years from the relevant Assessment Year, respondent No.1 issued a notice under Section 148 of the said Act. In response to request made by petitioner, respondent No.1, by its communication dated 27/12/2005 provided the reasons for reopening the assessment for the Assessment Year 1998-1999. As per proviso to Section 147 of the Act, if assessment is being reopened after expiry of 4 years from the relevant assessment year, it will be time barred unless the assessee had failed to disclose material facts that were necessary for the assessment for that Assessment Year.

The division bench of Justice Amit B. Borkar and Justice K.R.Shriram held that the impugned notice itself is beyond the period of four years from the end of the assessment year and does not comply with the requirements of proviso to section 147 of the Act, the Assessing Officer had no jurisdiction to reopen the assessment proceedings which were concluded on the basis of assessment under section 143(3) of the Act. On this short count alone the impugned notice is liable to be quashed and set aside.

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