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TMI Blog2015 (4) TMI 866X X X X Extracts X X X X X X X X Extracts X X X X ..... 43(2) of the Act, the assessment was completed 143(3) by the Assistant Commissioner of Income Tax, Circle-15(1), New Delhi. Subsequently, the Assessing Officer issued notice under Section 148 dated 30th March, 2010 proposing to reassess the short term capital gains of Rs. 3,06,37,449/- as business income. During the course of reassessment proceedings, the assessee company contended that the notice under Section 148 of the Act was not valid, inasmuch as, the very same issue was considered by the Assessing Officer at the time of framing the original assessment. Brushing aside the contention of the assessee, the Assessing Officer finally passed the reassessment order on 13.10.2010 treating the income from short term capital gains as business income. 3. Aggrieved by the above order, the assessee company filed an appeal before the learned CIT(A) who vide order dated 15.02.2011, upheld the reassessment proceedings, however, had concluded that the returned capital gains should not be treated as business income but as a short term capital gains only. Since the assessee company is aggrieved by that part of the order pertaining to the reopening of the assessment, the present cross objection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attention to para 5.2 of the said CIT(A)'s order. 6. We have heard the rival parties and have perused the material available on record. In the present case, we are required to adjudicate upon whether the reassessments proceedings are properly launched by the Assessing Officer or vitiated by mere change of the opinion. We find from the material available on record that the very same issue was considered by the Assessing Officer at the time of original assessment. The Assessing Officer had raised a specific query, as to why the short term capital gains should not be treated as business income. After consideration of reply filed by the assessee, the Assessing Officer accepted the claim. Further, it is trite law that in order to determine whether there are reasons to believe that the income got escaped the assessment, one has to look at the reasons recorded by the Assessing Officer before the issuance of notice under Section 148 of the Act. In this case, the reasons recorded by the Assessing Officer are as follows: "The assessment of M/s Responsible Builders (P) Ltd. for the A.Y. 2006- 07 was completed after scrutiny in September, 2008, determining an income of Rs. 30637449, as shor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the capital gains made out of sale of shares as short term capital gains. This, in our view, cannot be a valid reason. If a claim made by the assesee in the return is not rejected, it stands allowed. If such a claim is scrutinized by the Assessing Officer during assessment, it means he was convinced about the validity of the claim. His formation of opinion is thus completed. Further, framing of the assessment order is not in the control of the assessee, therefore, for any omissions or commissions in the assessment order cannot be attributable to the assesee. In this connection, we rely on the decision of Hon'ble Gujarat High Court in the case of Gujarat Power Corporation Ltd. Vs. ACIT, 350 ITR 266. The Hon'ble High Court held vide page no. 294 as follows: "The powers under section 147 of the Act are special powers and peculiar in nature where a quasi-judicial order previously passed after full hearing and which has otherwise become final is subject to reopening on certain grounds. Ordinarily, a judicial or quasi-judicial order is subject to appeal, revision or even review if statute so permits but not liable to be reopened by the same authority. Such powers are vested by the Legi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t form an opinion on such a claim. It is not unknown that assessments of larger corporations in the modem day, involve large number of complex claims, voluminous material, numerous exemptions and deductions. If the Assessing Officer is burdened with the responsibility of giving reasons for several claims so made and accepted by him, it would even otherwise cast an unreasonable expectation which within the short frame of time available under law would be too much to expect him to carry. Irrespective of this, in a given case, if the Assessing Officer on his own for the reasons best known to him, chooses 'not to assign reasons for not rejecting the claim of an assessee after thorough scrutiny, it can hardly be stated by the Revenue that the Assessing Officer cannot be seen to have formed any opinion on such a claim. Such a contention, in our opinion, would be devoid of merits. 1ft a claim made by the assessee in the return is not rejected, it stands allowed. If such a claim is scrutinized by the Assessing Officer during assessment, it means he was convinced about the validity of the claim. His formation of opinion is thus complete. 9. Further, there was no reference to any fresh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the words "reason to believe" but also inserted the word "opinion" in Section 147 of the Act. However, on receipt of representations from the Companies against omission of the words "reason to believe", Parliament re-introduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer." 10. Respectfully following the ratio laid down in the above cited case, we are of the opinion that even in the present case, in the absence of any fresh material as well as the proper reasons recorded, we have no hesitation to quash the reassessment proceedings. The order of learned CIT(Appeals) is modified to this extent. ITA No. 2726/Del /2011 for A.Y. 2006-07 11. This is an appeal filed by the Revenue pertaining to the assessment year 2006-07 challenging, inter alia, the finding of the learned CIT(A) that the profit made on the sale of shares are income from short terms capital gains. 12. Since we have quashed the reassessment proceedings in the cross objections filed by the assessee, it is not necessary to adjudicate upon the merits of the issues in the appeal. Hence the Revenue's appeal is dismissed. 13. In the result ..... X X X X Extracts X X X X X X X X Extracts X X X X
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