2017 (3) TMI 1055 - HC - Income Tax

Reopening of assessment - applicability of provisions of Section 50C - Held that - We note that the very issue with regard to transfer having taken place in the Assessment Year 2008-09 by way of part performance as contended by the petitioner is a matter of dispute. This would require investigation by the Assessing Officer and could be appropriately done only during the Assessment proceedings. So far as the submission on behalf of the petitioner that the Assessing Officer could not have any reason to believe that income chargeable to tax has escaped assessment in view of the decision of this Court in Greenfield Hotels & Estates (P) Ltd. (2016 (12) TMI 353 - BOMBAY HIGH COURT ) is concerned, it is observed that the aforesaid decision of this Court did not independently rule appropriate interpretation of Section 50C of the Act. The Court refused to entertain the Revenue s appeal for the reason that the impugned Order of the Tribunal had followed its earlier decision in case of Atul G Puranik vs ITO 2011 (5) TMI 576 - ITAT, Mumbai . The Revenue had accepted the same and in appeal from the Order of the Tribunal in Atul G. Purnaik (supra) was preferred. In the aforesaid background the Court refused to interfere with the Order of the Tribunal as there were no distinguishing features either on facts or in law as reiterated in GreenField Hotels & Estates (P) Ltd. (supra) from that existing in Atul G. Puranik (supra). In the present facts, the petitioner had not brought any decision of the Tribunal on the issue of law while filing its objections which the Assessing Officer could have dealt with bearing in mind facts involved. - Decided against assessee

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 for re-opening assessment for the Assessment year 2009-10.

Analysis:
The petition challenges a notice issued by the Assessing Officer under Section 148 of the Income Tax Act, 1961, seeking to re-open an assessment for the Assessment year 2009-10 based on the alleged understatement of income from the sale of a property. The Assessing Officer invoked Section 50C of the Act, claiming that the market value of the property was higher than the consideration received. The petitioner objected on the grounds that the capital gain arose in the previous assessment year and that Section 50C does not apply to leasehold rights. The Assessing Officer rejected the objections, stating that the issue of Section 50C applicability to leasehold rights would be determined in the regular assessment proceedings.

The petitioner argued that the transfer of leasehold interest occurred in the previous financial year, and cited a court decision stating that Section 50C does not apply to leasehold rights. The court noted that the timing of the transfer was disputed and required further investigation by the Assessing Officer during the assessment proceedings. The court also clarified that the previous court decision did not independently interpret Section 50C, and refused to interfere with the Tribunal's order as there were no distinguishing features from a previous case.

The petitioner failed to bring the Tribunal decision to the Assessing Officer's attention during objections, which could have been considered during the assessment proceedings. The court emphasized the importance of raising relevant legal decisions during objections to enable the Assessing Officer to address them appropriately. The court dismissed the petition, stating that the petitioner did not bring any relevant legal decisions to the Assessing Officer's attention during objections, leading to the dismissal of the petition.

In conclusion, the court dismissed the petition challenging the notice under Section 148 of the Income Tax Act, 1961 for re-opening assessment for the Assessment year 2009-10, emphasizing the importance of raising relevant legal decisions during objections to enable proper consideration by the Assessing Officer.