T.S. Sivagnanam, J. - (1.) The petitioner has filed this writ petition challenging the proceedings of the respondent dated 16.03.2016, by which the petitioner's objections to the reopening of the assessment under Section 147 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for the assessment year 2010-11 were rejected. The petitioner is a company engaged in the manufacture and assembly of automobile parts/components and wholly owned subsidiary of M/s.Hyundai Mobis Company Ltd. The petitioner during the financial year 2007-08, acquired the Customer Care Parts (in short "CCP") business from Hyundai Motor India Ltd., by a Business Transfer Agreement dated 26.04.2007, whereunder the company purchased the fixed assets, current assets, current liabilities, dealer and vendor network, goodwill, material contract including supply and sales contracts, leasehold properties, after service parts business personnel, operation associated with the assets and such other rights or tangible and intangible properties relating to the CCP business for a total consideration of Rs.425,25,00,000/-. The petitioner filed a revised return of income on 26.09.2011, for the assessment year 2010-11 declaring income of Rs.2,204,060,950/-.
(2.) Apart from other claims made, the petitioner claimed that they are entitled for depreciation on vendor and dealer network amounting to Rs.43,29,00,068/- and the details of depreciation were disclosed in the tax audit report annexed with the return of income. On submission of the return, an intimation under Section 143 (1) of the Act was issued accepting the return filed. Thereafter, the return was selected for scrutiny and notice under Section 143 (2) of the Act was issued on 02.07.2013, calling upon the petitioner to appear before the respondent and furnish various details in connection with the assessment. In response to the notice, the petitioner appeared before the respondent and during the course of assessment proceedings, the petitioner was advised that it is legally entitled to avail depreciation on goodwill as per the provisions of the Income Tax Act. Therefore, the petitioner filed representation dated 05.04.2013, putting forth a claim for allowance of depreciation on goodwill which according to the petitioner was inadvertently omitted to be claimed while filing the return of income. Subsequently, submissions were made on various dates along with written submissions, which were filed before the assessing officer to justify their claim for entitlement of depreciation on vendor and dealer network and goodwill. The assessment was completed under Section 143 (3) of the Act by order dated 31.03.2014 determining the tax payable at Nil. Subsequently, an intimation was issued for rectification of certain errors and accordingly, Order of Rectification under Section 154 of the Act was passed on 29.05.2014, by which the petitioner was granted a refund. Subsequently, another rectification order was passed on 11.08.2014, granting an additional refund. While so, the petitioner received a notice under Section 148 of the Act dated 27.03.2015, wherein the respondent alleged that he had reason to believe that there was escapement of income and called upon the petitioner to file a return of income in this regard. The petitioner vide representation dated 05.05.2015, sought for reasons based on which, reopening proceedings have been initiated. The petitioner also filed a return in pursuance of notice under Section 148 of the Act on 23.04.2015, reiterating the position that there has been no escapement of income and the return of income filed originally on 26.09.2011 was in accordance with law. While so, the petitioner came to know that there was an audit objection raised by the audit party of the Comptroller and Auditor General (in short "CAG") based on which, the assessing officer called for an explanation on the claim for depreciation on dealer and vendor network and goodwill, which were explained by the assessee that they are covered under intangible assets as per Explanation 3 to Section 32(1) of the Act. The petitioner filed an application under the Right to Information Act, 2005 requesting furnishing of details with regard to assessment years 2008-09 and 2009-10 and on receiving the reply, the petitioner would state that the assessing officer had accepted and even justified the allowance of depreciation on intangible assets and submitted his rejoinder to the objections raised by the CAG. Therefore, the petitioner would state that the impugned re-assessment proceedings is based on an audit objection raised in the earlier years and not based on an independent view of the assessing officer and such reopening is impermissible in law. The petitioner responded to the notice issued under Section 142 (1) of the Act and placed all materials and details including the Business Transfer Agreement and stated before the respondent that he lacks jurisdiction to initiate the impugned reopening proceedings.
(3.) Further, it was pointed out that the reassessment did not emanate from any material on record, but was merely based on a change of opinion of the assessing officer. These contentions were raised by the petitioner in their objections to the reopening. However, those objections have been rejected by order dated 16.03.2016, which is impugned in this writ petition.;