9911796707
TMI Blog2014 (6) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment initially made u/s 143(3) of the IT Act. Since the reopening of assessment is illegal, the assessment order dt. 30-12-2010 passed u/s 143(3) read with section 147 of the IT Act is equally illegal and should be annulled. In the facts and circumstances of the case, there was no omission on the part of the appellant to disclose all material facts truly and correctly at the stage of the initial assessment. 5. The appellant contends that the learned Commissioner's observation that the assessment was reopened to give effect to the orders of the Hon'ble Tribunal is again erroneous and perverse. In the assessment already made there was no benefit or deduction granted warranting any withdrawal or warranting any adjustment based on the alleged orders of the Hon'ble Tribunal. In fact, it is not known what are these orders of the Hon'ble Tribunal referred to by the Commissioner of Income tax(Appeals) which warranted reopening of assessment. 6. The appellant contends that the Commissioner of Income tax failed to deal with what was the so called effect that needed to be given based on the orders of the Hon'ble Tribunal warranting reopening of assessment. 7 T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 50C of the IT Act apply only to unregistered documents which are executed only after 1-10- 2009 and not earlier and was cited before the learned CIT(A) through ignored by him. Therefore, the learned Commissioner of Income tax erred in confirming the calculation of capital gains by applying the provisions of section 50C of the IT Act for the assessment year 2004-05 when the said section was not in force at all and inapplicable for the assessment year 2004-05. 12 In any event, it is contended that the sale consideration of Rs.30,50,000 is a bonafide sale consideration actually received on the transfer of land. The said transfer is valid and a genuine transfer made for bonafide sale consideration. Where the transfer is genuine and the consideration received is fully stated and there is no allegation of any unrecorded sale consideration being paid, the provisions of section 50C of the IT Act will not be applicable even if it is presumed that the amendment made by the Finance Act no.2, 2009 is retrospective in nature. 13 The appellant contends that the indexed cost of acquisition should have been taken at Rs. 6,94,30,787 and not Rs. 2,88,40,578. The learned CIT failed to deal wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04-05 - Reg. Ref: Your letter dated Please refer to the above As required by you the reasons for Re-opening your case u/s 147 of I.T. for A. Y. 2004-05 are communicated as under: "During the curse of assessment proceedings of the Asst. Year 2005-06, noticed that the assessee sold lane "situated at Sanky Road in Bangalore to At Developers vide agreement dated 28/06/2003. As per this agreement, the land originally divided into two blocks namely Block A & B. Block A was transferred A. Y. 2004-05 and capital gains as offered to tax in the same year. Similarly, par Block B was transferred in the A. Y.2005-06 and the assessee has offered capital tax in the same year. While completing the assessment for A. Y.2005-06, the consideration of the land sold was reworked invoking the provisions of Sec. 50C and the capital has been reworked. Simi lar exercise has to be carried out for the A. Y 2004- 05. 2. Secondly, an amount of Rs.7,82,56,320/- which was incurred to" expenditure during e A. Y.2000-01*was allowed in five equal instalments for from 2000-01 to 2004- 05 as per the directions of the CIT(A) vide his order 28/08/2003. On further appeal, the ITAT held that the entire VRS expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the proviso referred to supra the important part is that there should be a failure on the part of the appellant. This failure entails that certain material facts are essential for the assessing officer to make a proper assessment. In other words if the appellant does not disclose important facts which would have a negative bearing on his assessment then the disclosure is not full. The assessee must make a disclosure of all relevant facts and information and also truthfully so that the assessing officer is in a position to form an opinion on the exact income of the appellant. Once, all that information is available with the assessing officer then he forms an opinion. Later on, based on the same information he cannot change his opinion. This is the import of the aforementioned proviso whose purpose is to ensure that only genuine cases are reopened and merely because a succeeding assessing officer or the same assessing officer later on forms a different opinion, assessments should not be reopened. However, in genuine cases where due to a failure on the part of the appellant the assessing officer could not make a correct judgement, he has every right to reopen the original asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the reopening of assessment u/s 148 is illegal for the reason that: (a)the assessment was earlier completed u/s 143(3) of the IT Act; (b )the assessment is sought to be reopened beyond a period of four years from the end of the relevant assessment year and, (c) lastly there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment for that assessment year. 7.1. The learned AR submitted that in the notice furnishing the reasons for reopening the assessment there is not even a whisper of any remotest allegation that there was any failure to disclose fully and truly all material facts on the part of the assessee. The reasons furnished are a mere pretence and is only a ruse to review the assessment already made. 7.2 The learned AR contended that the reasons furnished could not have led to formation of any belief that income chargeable to tax escaped assessment, as there was no failure on the part of the appellant to disclose fully and truly all material facts necessary for its assessment. 7.3 As regards the reason No. 1 (supra) given by the Assessing Officer for reopening of assessment, the learned AR submitted that sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns furnished, it is very clear that there cannot be any criticism that there was any omission to disclose fully and truly all material facts on the part of the assessee. It was because of this factual position, even the record of reasons does not allege any failure on the part of the appellant that it has failed to disclose fully and truly all material facts necessary for the purpose of assessment. 7.9 As regards reason No. 2 given by the Assessing Officer for reopening of assessment, the learned AR contended that the above reasoning given is wrong, as the Assessing Officer never allowed Rs.l,56,53,264 as expenditure while completing the assessment for the Asst. Year 2004-05. Kind attention is invited to the assessment order dt. 28-12-2006. It will be clear that the Assessing Officer has not allowed the VRS expenditure of Rs.l,56,53,264 as deduction at all. Therefore, the question of adding back this amount does not arise. 7.10 Referring to the both the said reasons, the learned AR submitted that there is no allegation in the record of reasons that the assessee has failed to disclose fully and truly all material facts. In fact, there cannot be any such allegation because there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the record of reasons to justify the reopening of the assessment. Additional reasons cannot justify the reopening of assessment which are not part of the record of reasons. The only document to be looked into is the record of reasons: 1. N.D. Bhatt (IAC) & Anr. Vs. IBM World Trade Corpn., 216 ITR 811 (Bom.) 2. Equitable Investment Co.(P) Ltd. Vs. ITO, 174 ITR 714 (Cal.) 3. ASA Johan Devinathan & Anr. Vs. Addl. CIT, 126 ITR 270 (Mad.) 4. Smt. Rajeshwari Birla Vs. WTO, 119 ITR 629 (Cal.) 5. Mohinder Singh Gill & Anr. V. Chief Electoral Officer, AIR 1978 SC 851 6. CIT Vs. Living Media India Ltd., 359 ITR 106 (Del.) 7.15 The learned AR submitted that in the letter dt. 22/07/2010 communicating the reasons for reopening a third reason is also given. This reason appears to have been an after thought, after reopening the assessment and is not a part of record of reasons for reopening the assessment. The assessment reopened was earlier made u/s 143(3). It was reopened after the expiry of four years from the end of the relevant assessment year. Therefore sanction under proviso to section 151(1) of CIT for reopening is mandatory. The third reason communicated to the assessee is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y giving the reasons cited supra and the action of the Assessing Officer was confirmed by the CIT(A) on the ground that the information provided by the assessee was not full and true and that there was justification with respect to the Assessing Officer for reopening the assessment. 9.2 The contention of the learned AR is that it was the duty of the Assessing Officer to establish that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment. According to the learned AR, it is evident that there was no failure on the part of the assessee to disclose fully and truly all material facts. Even if there is any such allegation, such allegation being justifiable and open to judicial scrutiny, cannot survive on the facts of the case. It is all the more pertinent to note that all information was there in the record itself and the reopening of assessment was with reference to the material already available on record. On this very premise itself, it is clear there was no failure on the part of the assessee to disclose fully and truly all material facts. 9.3 Under the new provisions of section 147, an assessment can be reopene ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
