2019 (10) TMI 1004 - HC - Income Tax

Reopening of assessment u/s 147 - HELD THAT - As submitted that after satisfying himself the Assessing Officer had framed the assessment in the case of the firm vide order dated 25.02.2015 accepting the explanation given by the firm. As further pointed out that in this case the reopening is based upon a search carried out at the premises of K. Star group on 17.08.2016. It was submitted that under the circumstances the Assessing Officer could not have assumed jurisdiction under section 147 of the Act and a notice under section 153C could have been issued if permissible. Having regard to the submissions advanced by the learned counsel for the petitioner issue Notice returnable on 10th December 2019 . By way of ad-interim relief further proceedings pursuant to the impugned notice dated 29.03.2019 issued by the respondent under section 148 of the Income Tax Act 1961 for the Assessment Year 2012-13 are hereby stayed. Direct service is permitted.

Summary

Issues: Reopening of assessment for Assessment Year 2012-13 based on discrepancies in property purchase value; Jurisdiction under section 147 of the Income Tax Act; Validity of notice under section 148

In this case, the petitioner's counsel argued that the Assessing Officer's reasons for reopening the assessment for the Assessment Year 2012-13 were flawed. The petitioner contended that the assessment could only be reopened against the firm M/s. Akshar Associates and not against the assessee individually. The counsel highlighted discrepancies in the document forming the basis for reopening, pointing out that it did not clearly link the payment to the firm or its partners. The counsel also emphasized that the Assessing Officer had already conducted a scrutiny assessment for the firm in question, accepting their explanation regarding the land purchase.

Moreover, it was argued that the reopening was triggered by a search at K. Star group's premises, which, according to the petitioner, did not provide the Assessing Officer with the jurisdiction to reopen the assessment under section 147 of the Income Tax Act. The petitioner suggested that if necessary, a notice under section 153C could have been issued instead.

Considering the arguments presented, the court issued a Notice returnable on 10th December 2019 and granted ad-interim relief by staying further proceedings pursuant to the impugned notice dated 29.03.2019 issued by the respondent under section 148 of the Income Tax Act for the Assessment Year 2012-13. Direct service of the order was permitted for compliance.