9911796707
TMI Blog2014 (8) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase and sale of shares. The assessee has manipulated the affairs in such a way that where script has been sold within twelve months, it is claimed as short term capital gains and taxed at a lower rate by applying section 111A. As assessee is engaged in share trading activity only, all the income/ receipts should be treated as business income including short term capital and long term capital gain. Reliance is also placed on the Board's circular No.4 dated 15.06.2007. In view of the above, I have reason to believe that income chargeable to tax has escaped assessment for a,Y.2007-08 by reason of the failure on part of the assessee to disclose fully and truly the income under the correct head and all material facts necessary for the assessment of income resulting in the income being assessed at low rate/claimed exempt. Hence, the assessment is reopened by issue of Notice u/s 148." The reasons furnished by reopening the assessment for A.Y.2008-09 (subject matter of challenge in W.P.No.137 of 2014 dated 11.2.2014) reported in 362 ITR 403 is as under : "It is observed that the assessee is only engaged in the business of share trading and regularly doing purchase and sale of sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to disclose fully and truly all material facts necessary for the assessment. In your case, the assessment has been reopened within the period of four years. Therefore, even if there is no failure on your part, the income can be reassessed. As stated above the reopening of the case is not based on mere change of opinion. Therefore, the decisions quoted by the assessee does not apply to the facts of this case. Thus the objections raised are not valid and devoid of any merits. The order dated 20.11.2003 disposing of the petitioner's objections for A.Y.2008-09 subject matter of challenge by petitioner as reported in 362 ITR 402 are inter alia as under: 8) "The objection raised by the assessee are hereby disposed off as under : 8.1) & 8.2) .................. 8.3) The third objection of the assessee is regarding the reopening being done merely on the basis of change of opinion. It is observed that reopening is not due to any change of opinion but on the basis of clear observations that assessee did not carryout any business activity other than share trading and offered the income from share trading as Short Term Capital Gain @ 10% when sold within 12 months and claimed as Lon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions. (A copy of the unreported decision as tendered) In the above case, the Madras High court had refused to entertain the petitions challenging re-opening of assessment on the ground that the same can be agitated before the authorities and carried up in appeal under the Act. This decision it is submitted lays down the correct law and should be followed by us; (iii) In this case, unlike the decision rendered by this Court in petitioner's case reported in 362 ITR 403 the facts stated in the affidavit would establish that the petitioners had misrepresented the facts during the assessment proceedings under section 143 (3) of the Act. In particular the affidavit draws attention to the profit and loss account submitted by the petitioners which indicates that trading is their only business because other income is only on account of interest and dividends; and (iv) The reply dated 29.7.2009 filed by the petitioners during the proceedings under Section 143 (3) of the Act was identical to replies filed for all the assessment years and no factual particulars of the nature of their business was pointed out. Thus there was no occasion for the Assessing Officer to consider the facts wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns under Article 226 of the Constitution of India. However, a petition filed after a long delay is not entertained on the ground of laches not as matter of rule but a factor to be considered while deciding whether or not to exercise our discretion to entertain the petition. The dismissal on ground of laches is not a rigid rule of law but, a rule of prudence. The exercise of discretion would depend on the facts of each case and merely because the petition for transfer of a case was rejected on the ground of laches to submit that this petition challenges a reopening notice should also be dismissed is unacceptable. In the present facts, we are of the view that the petition has been filed with reasonable dispatch. In any case in the present facts there is no such delay which would justify dismissing the petition on ground of delay/laches. 7. It was next contended that this Court should not exercise its writ jurisdiction under Article 226 of the Constitution of India and the petitioner should be left to avail of the statutory remedies including an appeal available under the Act. In support reliance was placed upon an unreported decision dated 4.2.2014 of the Madras High Court in Joint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lenge is with regard to jurisdictional facts, yet the Court in its discretion may not entertain the petition as it could be best left for determination before the authorities under the Act. 8. Mr.Mistry learned senior counsel for the petitioners pointed out decisions of this High Courts and of the Supreme Court to contest the submissions on behalf of Revenue. However, we do not see any need to deal with them in view of the fact that the decision of the Hon'ble Madras High Court itself does not prohibit a petitioner from challenging a reopening notice under the Act if it is without jurisdiction. We have on identical facts and grounds entertained and disposed of a challenge in the petitioner's own case reported in 362 ITR 403. 9. Mr.Chhotaroy learned counsel for the Revenue next contends that in the earlier decision in the petitioner's own case reported in 362 ITR 403 there was no affidavit in reply leading to the order dated 11.2.2014. However, in this case an affidavit is filed by the Revenue and reliance is placed upon the internal audit Report (a copy of which is not annexed) which according to him has led to the examination of the records by the Assessing Officer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e parameters to make a distinction between the shares held by the assessee as investments and shares held as stock-in-trade. Besides, the satisfaction which is required of the Assessing Officer and in case the Assessing Officer was of the view that the explanation was not sufficient, it was open to the Assessing Officer to call for further information. We do not find any merit in this objection raised by Mr.Chhotaroy learned counsel for the revenue. 12. Lastly, Mr.Chhotaroy learned counsel for the revenue mentioned that the profit and loss account of the assessee as furnished by the petitioners would clearly indicate that the Assessing Officer had not applied his mind to the same. This non-application of mind by the Assessing Officer at the stage of passing the assessment order is the view of Mr.Chhotaroy. There is no basis for coming to this conclusion. Once a query had been raised with regard to a particular issue, it must follow that the Assessing Officer had duly applied his mind to the queries raised and taken a view on the matter. Therefore, we do not accept the submissions of Mr.Chhotaroy that this is not a case of change of opinion on the part of the Assessing Officer in i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
