JUDGMENT IN HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 16404 of 2012 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE AKIL KURESHI Sd/- and HONOURABLE MR.JUSTICE BIREN VAISHNAV Sd/- 1 Whether Reporters of Local Papers may be allowed No to see judgment ? 2 To be referred to Reporter or not ? No 3 Whether their Lordships wish to see fair copy of No judgment ? 4 Whether this case involves substantial question of No law as to interpretation of Constitution of India or any order made thereunder ? GUJARAT ENVIRO PROTECTION AND INFRASTRUCTURE LTD....Petitioner(s) Versus DEPUTY COMMISSIONER OF INCOME & 1....Respondent(s) Appearance: MR B S SOPARKAR, ADVOCATE for Petitioner(s) No. 1 MRS MAUNA M BHATT, ADVOCATE for Respondent(s) No. 1 - 2 CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MR.JUSTICE BIREN VAISHNAV Date : 14/06/2017 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) Page 1 of 5 HC-NIC Page 1 of 5 Created On Fri Jun 23 09:34:03 IST 2017 C/SCA/16404/2012 JUDGMENT 1. Petitioner has challenged notice of reopening dated 22.3.2012 issued by respondent-Assessing Officer to reopen assessment for assessment year 2007-08. From reasons recorded by Assessing Officer, it can be seen that he wanted to disallow assessee's claim of deduction under Section 80IA of Act. Under similar circumstances, in case of this very assessee for assessment year 2006-07, we have by judgment passed separately today in Special Civil Application No.16372 of 2012 set aside notice for reopening. difference in present case is that notice for reopening is issued within period of four years from end of relevant assessment year. In cognate matter, following order was passed. 8. We have reproduced reasons recorded by Assessing Officer. First paragraph of reasons pertains to assessment for assessment year 2009-10, during which Assessing Officer noticed that assessee was not treating hazardous waste as per norms and thus failed to fulfill status of solid waste management treatment plant, which was eligible for deduction. He further formed opinion that assessee did not fulfill conditions for exemption under said provision. assessee's claim for exemption was thus disallowed for said year for all its treatment plants. Second paragraph of reasons concerns assessment year in question. With respect to same, Assessing Officer recorded that since assessee was not fulfilling conditions laid down under Section 80IA of Act, deduction of Rs.1.43 Crores claimed by assessee would have to be disallowed by reopening assessment. 9. What can be seen from such reasons is that though Assessing Officer refers to assessment of year 2009-10 for purpose of his information, insofar as year under consideration is concerned, he confined his reasons to one single aspect viz. of assessee not fulfilling necessary conditions for deduction. Literal Page 2 of 5 HC-NIC Page 2 of 5 Created On Fri Jun 23 09:34:03 IST 2017 C/SCA/16404/2012 JUDGMENT reading of reasons would imply that Assessing Officer was not pressing in service ground of deficiencies in treatment of waste that assessee was imparting, which he had noticed in assessment year 2009-10, for present year i.e. assessment year 2006-07. Further his reference to assessee not fulfilling conditions for claim of deduction is, by itself, rather vague and general reference. In our understanding, reasons lack clarity. 10. If we take more lenient view, at best it can be said that for assessment year 2006-07, Assessing Officer wanted to press in service ground of assessee not fulfilling conditions for deduction as he had referred to in his order of assessment for year 2009-10. This ground is completely independent and unrelated to his observation of assessee not treating hazardous waste as per requisite norms. In year 2009-10, Assessing Officer had held that assessee was executing work as work contractor and not in its own capacity. It was this defect, according to him, which made assesee ineligible for deduction under Section 80IA (4) of Act. 11. In this respect, firstly there was no failure on part of assessee to disclose necessary facts. documents in nature of contracts between government and other agencies were very much part of record. In case where reopening of assessment is being resorted beyond period of four years this would be relevant. Further, during assessment pursuant to first notice for reopening, Assessing Officer had examined claim of deduction under Section 80IA (4) of Act. It may be that Assessing Officer had only one of units of assessee in mind when such assessment was being framed. Nevertheless nothing prevented him from disallowing such deduction qua other units also if similar situation obtained. 12. There is another reason why this ground cannot sustain. We gather from record that for assessment year 2004-05, assessee did not initially claim deduction under Section 80 IA (4) of Act for profit from its Gabheni Unit. However, during scrutiny of assessment since income became positive due to certain additions, assessee pressed such claim. This claim was examined and after verifying necessary eligibility Page 3 of 5 HC-NIC Page 3 of 5 Created On Fri Jun 23 09:34:03 IST 2017 C/SCA/16404/2012 JUDGMENT requirements, Assessing Officer allowed claim. documents including contracts between parties under which assessee had carried out work form part of such proceedings. 13. Even if we were to stretch reasons recorded by Assessing Officer, as was attempted by counsel for revenue, at best we can proceed on basis that Assessing Officer wanted to rely on failure of assessee to properly treat solid waste for denying claim of deduction in present year. However, this ground itself has multiple hurdles. Firstly, nowhere do reasons record that there was such defect or default on part of assessee in treating waste during period relevant to assessment year 2006-07. From order of Appellate Commissioner in appeal filed by assessee against original assessment for said year, we gather that defects were noticed by inspecting team of GPCB during its visit sometime in October and November 2011. Any defect or deficiency which may have been detected during particular inspection visit would not necessarily imply that such defects existed during period nearly three to four years back. Unless that defect was of such nature, which would automatically establish that no facilities were ever created, revenue would have to have some foundation to suggest that during period relevant to assessment year 2006-07 also such defects existed. This being case of reopening of assessment, only for purpose of fishing inquiry same would not be permissible. 14. In result, petition is allowed. Impugned Notice dated 28.3.2012 issued by respondent-Assessing Officer to reopen petitioner's assessment for assessment year 2006-07 is set aside. Rule is made absolute. 2. Without repeating reasons, we allow this petition also and set aside impugned notice. Rule is made absolute. Sd/- (AKIL KURESHI, J.) Page 4 of 5 HC-NIC Page 4 of 5 Created On Fri Jun 23 09:34:03 IST 2017 C/SCA/16404/2012 JUDGMENT Sd/- (BIREN VAISHNAV, J.) malek Page 5 of 5 HC-NIC Page 5 of 5 Created On Fri Jun 23 09:34:03 IST 2017 Gujarat Enviro Protection And Infrastructure Ltd. v. Deputy Commissioner of Income-tax & 1