Reopening of Assessment regarding Excess claim of Depreciation: Supreme Court dismisses SLP due to lack of Sufficient Reason for Delay [Read Judgement]
The bench found no reason to condone the inordinate delay of 244 days in filing the Special Leave Petition as the explanation sought to be provided, does not constitute sufficient cause.
Reopening of Assessment - Excess claim of Depreciation - Supreme Court - SLP due - Sufficient Reason - Delay - taxscan
Reopening of Assessment - Excess claim of Depreciation - Supreme Court - SLP due - Sufficient Reason - Delay - taxscan
In a recent ruling, the supreme court dismissed a Special Leave Petition(SLP) filed challenging the reopening assessment regarding excess claim of depreciation. The dismissal was due to the lack of sufficient reason for delay.
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A two judge bench of Justice Pamidighantam SriNarasimha and Justice Atul S. Chandurkar found no reason to condone the inordinate delay of 244 days in filing the Special Leave Petition as the explanation sought to be provided, does not constitute sufficient cause. The bench dismissed the petition on the ground of delay. The petition was against P.C. Patel and Company , the respondent assessee.
The High Court quashed the impugned notice dissued under Section 148 of the Act is hereby quashed and set aside. The revenue department filed the SLP before the supreme court against the impugned final judgment and order dated 06-08-2024 in SCA No. 19096/2022 passed by the High Court of Gujarat at Ahmedabad.
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Before the High Court, the notice issued under Section 148 of the Income Tax Act, 1961 for reopening the assessment for the Assessment Year 2016-2017 was challenged . The petitioner which is a partnership firm is engaged in the business of hiring of Earth Moving equipment and Commercial Vehicles for providing excavators, dozers, graders, rock drill machines etc. with operators for excavation of overburden and minerals.
The assessee filed return of income on 15.09.2016 declaring total income at Rs.18,29,24,740/- which included the depreciation on tipper at the rate of 15% amounting to Rs.7,81,66,149/-. After considering the various details and evidence, the Assessing Officer completed regular assessment under Section 143(3) of the Act on 01.12.2018 by determining the total income of Rs.18,35,05,070/-.
By notice under Section 148A(b) dated 23.05.2022, the assessment was sought to be reopened on the basis of the information in possession with the Assessing Officer to the effect that the claim of higher depreciation on Tipper- Plant & Machinery was not admissible at 30% since the petitioner was in business of mining and not in business of motor lorries on hire and accordingly, the depreciation amounting to Rs.7,81,66,149/- was not allowable.
The High Court observed that the issue with regard to the claiming of depreciation at the rate of 30% on tippers is already decided by this Court vide Judgment and Order dated 01.05.2018 rendered in the Tax Appeal referred to herein above. The said decision is binding upon the respondent Assessing Officer and therefore, the information in possession of the respondent Assessing Officer cannot be said to result in escapement of the income on the same facts of the petitioner.
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When the issue which is sought to be kept alive is already decided by this Court, the respondent Assessing Officer cannot be said to have assumed the jurisdiction to reopen the assessment on the same facts which have achieved finality for disallowing the excess claim of the depreciation. Moreover, the petitioner has disclosed fully and truly all the material facts relevant for the assessment and there is no failure on the part of the petitioner for the same.
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