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2022 (5) TMI 1286 - HC - Income TaxValidity of reopening of assessment u/s 147 - requirement of speaking order after raising the objections - Change of opinion - Information about reasons to believe - as submitted without giving any reasons and without disposing the objection of the petitioner for reopening of the assessment impugned order has been passed - HELD THAT - The petitioner has participated in the proceedings pursuant to a notice issued under Section 148 of the Income Tax Act, 1961 knowing fully well the reasons why the notice was issued for reopening of the assessment. The petitioner in their representation/reply dated 29.10.2019 has traced out the entire history and the circumstances under which the land which originally belonged to Piramal Finance Services Limited (PFSL) was transferred to Harita Finance Limited (HFL) which later named as TVS Finance and Services Limited and that a sale agreement was signed and the possession of the land was handed over to the said company. The representation/reply also states that thereafter the land was capitalized in the books of accounts of the TVS Finance and Services Limited (formerly Harita Finance Limited) and that the land was valued at Rs.102.50 Crores - By 30.03.2020, it was stated that the difference between the sale consideration (Rs.102.50 Crores) and the outstanding loan amount against the lands were settled (Rs.14.70 Crores) and was offered to tax under the head capital gains by TVS Finance and Services Limited (TVSFC) in the Assessment Year 2009 to 2010. The petitioner has further stated that though the land was transferred to TVS credit Services Limited, the same was transferred to the petitioner s vendor namely TVS Motor Services Limited at cost by TVS Finance Services Limited with TVS Credit Service Limited being confirming a party by an agreement to sale dated 20.01.2010. Thus, it cannot be stated that the petitioner was not aware of the reasons for reopening of the assessment. The petitioner has replied to the proceedings initiated under Section 148 of the Income Tax Act, 1961. The petitioner has not asked for a speaking order. After the objections, the petitioner was overruled by the respondents vide Impugned Assessment Order, the petitioner has now come forward with the present case to make it seems as if decision in the case of GKN Drive Shafts (India) Limited 2002 (11) TMI 7 - SUPREME COURT has not been followed. Whether the income had escaped assessment or not can be now determined only in an appellate proceedings against the Impugned Assessment Orders passed under Section 147 read with Section 144B of the Income Tax Act, 1961. Having given up the right to ask for a speaking order, the petitioner cannot now turn around and question the Impugned Order by stating that it has been passed over-looking the safeguard prescribed in the case of GKN Drive Shafts (India) Limited. Further, case also does not warrant a speaking order in terms of the aforesaid decision of the Court. We do not find any merits in the present writ petition. Therefore, this writ petition is liable to be dismissed and accordingly dismissed.
Issues:
Challenge to Impugned Order dated 30.09.2021 for Assessment Year 2013-2014 under Section 148 of the Income Tax Act, 1961. Detailed Analysis: 1. Reopening of Assessment: The petitioner challenged the Impugned Order dated 30.09.2021, arguing that the assessment for the year 2013-2014 was originally completed under Section 143(3) of the Income Tax Act, 1961 on 29.02.2016. The proceeding under Section 148 was initiated beyond four years but within six years. The petitioner contended that the assessment was reopened based on a change of opinion, contrary to established decisions of the Court. 2. Reasons for Reopening: The respondents provided reasons for reopening the assessment on 15.11.2021, citing the purchase of land at Panvel for Rs.25.82 crores during the relevant financial year. The petitioner participated in the proceedings and responded to the notice issued under Section 148, providing details of the land transfer and subsequent transactions involving various companies. 3. Legal Arguments: The petitioner argued that the assessment was reopened without proper justification and sought to quash the Impugned Order. The respondents contended that the petitioner had not asked for reasons for reopening or raised objections in a timely manner. The petitioner's right to appeal was emphasized as an alternative remedy. 4. Court's Decision: After considering the arguments, the Court found no merit in the writ petition. The petitioner was given liberty to file a statutory appeal within three months. The Court dismissed the writ petition, stating that the merits of the case could be determined in appellate proceedings. The petitioner's failure to request a speaking order was highlighted as a factor in the decision. 5. Conclusion: The Court dismissed the writ petition without costs, allowing the petitioner to pursue an appeal before the Appellate Commissioner. The judgment emphasized the importance of following proper procedures in challenging assessment orders and seeking redress through statutory appeals. The case highlighted the significance of timely objections and the right to appeal in tax matters.
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