2024 (5) TMI 396 - HC - Income Tax

Reopening of assessment u/s 147 - validity of order passed by the first respondent overruling the objection of the petitioner against the reopening of the assessment that was completed earlier on 28.12.2018 - HELD THAT - Although the petitioner has not produced any documents to substantiate that the petitioner had enclosed the copy of the order of the Special Tahsildar, Stamps prior to passing of the assessment order u/s 143(3) the fact remains that the reasons furnished by the respondents indicate that the differential value for an amount of Rs. 22,11,500/- was omitted to be considered indicating that the information was available either in the Form of order of the Special Tahsildar dated 02.04.2018 or in the Form of an endorsement in the sale deed, which would have been produced for inspection before the re-assessment was completed on 28.12.2018. The words used in the two communications dated 08.11.2011 and on 02.08.2021 by the jurisdictional AO make it clear that the information was available. However, it was not noticed by the AO. The petitioner has made out a case for interfering with the impugned order - Accordingly, the impugned order passed by the first respondent overruling the objection of the petitioner against the re-opening of the assessment that was completed earlier on 28.12.2018 vide impugned notice issued u/s 148 is set aside.

Summary

Issues Involved:
1. Reopening of Assessment u/s 148 of the Income Tax Act, 1961.
2. Validity of invoking the extended period for reassessment under Section 147.
3. Failure to disclose material facts necessary for assessment.

Summary:

1. Reopening of Assessment u/s 148 of the Income Tax Act, 1961:
The petitioner challenged the order dated 18.02.2022, which overruled their objection against the reopening of the assessment completed on 28.12.2018, via notice dated 31.03.2021 issued u/s 148 of the Income Tax Act, 1961. The petitioner had voluntarily filed a return of income u/s 139 for the assessment year 2014-15, declaring a total taxable income of Rs. 14,49,670/- and agricultural income of Rs. 12,45,000/-. The petitioner acquired an immovable property jointly with her son, declared at Rs. 51,00,000/-, while the Registering Authority demanded stamp duty based on a guideline value of Rs. 1,74,24,000/-.

2. Validity of invoking the extended period for reassessment under Section 147:
The reassessment was previously completed on 28.12.2018 following a notice issued on 12.10.2017. The petitioner sought partial relief through an appeal and attempted to settle under the Vivad Se Vishwas Scheme. A second notice for reopening was issued on 31.03.2021, citing reasons for reassessment that included discrepancies in the property's stamp duty value. The assessment was made under the faceless Assessment Scheme, 2019. The petitioner argued that the issue was covered by the Division Bench decision in ACIT Vs. Seshasayee Paper and Board Ltd., which held that the extended period for reassessment could only be invoked under specific circumstances, including the failure to disclose fully and truly all material facts necessary for assessment.

3. Failure to disclose material facts necessary for assessment:
The petitioner contended that there was no failure to disclose material facts, as the sale deed was produced for inspection in the first round. The court found that the reasons for reassessment indicated that the differential value of Rs. 22,11,500/- was omitted, suggesting that the information was available but not noticed by the Assessing Officer. The court concluded that the petitioner had made a case for interfering with the impugned order dated 18.02.2022. Thus, the impugned order overruling the objection against the reopening of the assessment was set aside, and the Writ Petition was allowed.