9911796707
Advanced Search 
TMI Blog2015 (4) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... ructing residential complexes inter alia at Pune. Respondent No.1 is the Assessing Officer in-charge of the Petitioner's assessment. Respondent No.2 is the earlier Assessing Officer who handled the Petitioner's assessment before transfer of the jurisdiction to Respondent No.1. Respondent No.2 has completed the assessment in respect of the Petitioner. Respondent No.2 has issued notice on 29th March, 2014 under section 148 of the Act in respect of the assessment year 2008-09 for reopening of the assessment for the assessment year 2008-09. Respondent No.3 the Additional Commissioner of Income Tax had granted approval under Section 151 of the Act for reopening of the assessment. 4. The Petitioner was originally registered as a company in the financial year 2006-07 with a nominal share capital of Rs. 1 lac divided into 10,000 equity shares of face value of Rs. 10/- each. Subsequently, a Share Subscription Agreement dated 16th November, 2007 was entered into between the Petitioner and various entities who were to subscribe to the shares of the Petitioner under the Share Subscription Agreement dated 16th November, 2007 ('SSA'). Pursuant to the SSA during the financial yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haryans Resources Ltd. also filed reply dated letter dated 17th August, 2011. 7. After considering the submissions of the Petitioner and the details submitted by Phoenix Hospitality Ltd. and Sharyans Resources Ltd., Respondent No.2 completed the assessment for the assessment year 2009-10 under Section 143(3) of the Act on 29th December, 2011 without making any adjustment on account of share premium received by the Petitioner. During the course of the assessment proceedings for the assessment year 2011-12, Respondent No.2 enquired about share premium and asked the Petitioner to explain and furnish the working of the share premium received by the Petitioner in the relevant year. 8. The Petitioner vide letters dated 13th January, 2014, 20th January, 2013, 3rd March, 2014 and 13th March, 2014, provided the information. Respondent No.3 passed an order on 22nd March, 2014 under Section 143(3) of the Act for the assessment year 2011-12. He accepted the submissions of the Petitioner and did not make any addition with respect to the share premium received by the Petitioner. Thereafter, Respondent No.2 issued notice under section 148 of the Act dated 29th March, 2014 stating that the Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the objections of the Petitioner challenging the validity of reassessment inter alia observing that under Section 147 of the Act, the Assessing Officer can invoke the provisions of the section for bringing to tax escaped income by reopening the assessment within a period of four years and the proviso to Section 147 of the Act is not applicable. According to the A.O., the quantum of escaped income was equivalent to quantum of share premium amounting to Rs. 14,10,01,300/- which is more than the ceiling of Rs. 1 lac prescribed under the Act and prior sanction of the Additional Commissioner of Income Tax was obtained on 28th March, 2014, prior to issuance of notice. 12. The Petitioner, being aggrieved by the proposed reopening, filed the above two writ petitions. 13. Having perused the aforesaid correspondence and documents, we have heard Mr.Mistri, learned senior counsel appearing on behalf of the Petitioner and Mr.Malhotra, learned counsel appearing on behalf for the Respondents. At the outset, Mr.Mistri submitted that the share premium does not and cannot form the part of income of the Company. He made a quick reference to the pronouncement of the this Court in the case of Vodafo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records. He submitted that all the records demanded were produced before the assessing officer. 15. Vide letter dated 29th August, 2011 the Chartered Accountants of the assessee provided to the assessing officer the following:- 1) Party-wise details of CWIP; 2) Details of loans and Advances; 3) To explain as to why interest received be not brought to tax under the head "income from other sources"; 4) Balance-sheet of K2A Hospitality Ltd; 5) Confirmation of accounts of K2A Hospitality Ltd.; 6) Balance sheet of M/s. Fulda River Ltd. After the receipt of the same, on 22nd March, 2014, the Assessing Officer accepted the assessment under section 143(3) of the Act, the total sum of Rs. 1,46,206/- to the total income under the head of Income Tax from other sources and continued investigation under the penalty proceedings under section 271(1(c) of the Act for having furnished inaccurate particulars of income. Surprisingly, he issued notice under section 148 of the Act stating that he has reasons to believe that the income chargeable to tax has escaped assessment for the assessment year 2008-09 and he proposed to reassess the income. Mr.Mistri pointed out that Respondent No.2 merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f four years and did not disclose any material which the assessee had failed to disclose. The Assessing Officer had no reason to believe that income had escaped assessment for the relevant year. He then relied upon the decision of this Court in the case of Aroni Commercials Ltd. V/s. Assistant Commissioner of Income-Tax & Anr. reported in [2014] 367 ITR 405 (Bom) in which it is held that if the notice notice under Section 148 of the Act provides identical reasons for reopening of the assessment for a second consecutive assessment year and the earlier year notice had been held to be invalid, the notice for re-assessment for the subsequent year should also be held to be invalid. 19. Mr.Mistri submitted that in Writ Petition (L) No.736 of 2015 also an identical notice had been issued bereft of any reasons or material justifying the issuance of notice in respect of assessment year 2009-10. He submitted relying upon these decisions that the impugned orders as well as the notices in both the above petitions are liable to be set aside. 20. Referring to the decision of this Court in Writ Petition (L) No.2885 of 2014 [M/s. Rockstar Real Estate Pvt. Ltd. V/s. Income Tax Officer 10(1)(4)], ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent No.2 have been answered by the assessee or the subscribers in question especially when all questionnaires addressed to subscribers were duly answered by the subscribers. 23. The Assessing Officer thereafter proceeded to complete the assessment order and issued an assessment order but did issued a volte face the and a fresh notice under section 148 of the Act just one week after the issuance of the assessment order. This does not augur well for the revenue and particularly in view of the fact that the notice under Section 148 of the Act (Exhibit-Q to the petition) dated 29th March, 2014. It does not contain any tangible reasons for reopening of the assessment. In fact, as rightly appointed by Mr.Mistri, during his submissions, Respondent No.2 has completed the assessment and issued an assessment order on 22nd March, 2014, yet the very same Assessing Officer has proceeded to issue a notice under Section 148 of the Act, seven days of the assessment order. 24. We may add a word of caution here. Although the Petitioner has relied upon the decision of this Court in the case of Vodafone and the department has accepted the said decision and decided against challenging it by issuing ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
