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TMI Blog2016 (8) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... ATE FOR THE RESPONDENT : MR PRANAV G DESAI, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Petitioner has challenged a notice dated 25.03.2015 issued by the respondent Assessing Officer to reopen the petitioner's assessment for the assessment year 2010-11. 2. Brief facts are as under: 3. Petitioner is an individual and is engaged in the business of sale and purchase of land. For the assessment year 2010-11, the petitioner filed the return of income showing total income of ₹ 1.41 crores (rounded off) on 15.10.2010. Such return was taken in scrutiny. The Assessing Officer passed order of assessment under section 143(3) of the Act on 18.01.2013 accepting the petitioner's declaration of total income. To reopen such scrutiny assessment, the Assessing Officer issued impugned notice. For issuing such notice, he has recorded following reasons: In this case the assessee filed the return of income on 15.10.2010 showing total income at ₹ 1,41,95,110/. An order u/s. 143(3) of the IT Act passed on 18.01.2013 determining total income at ₹ 1,41,95,110/. Subsequently, on verification of details it is noticed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Rural Electrification Bond. According to the Assessing Officer, the proceeds of ₹ 1.67 crores arising out of the sale of the plot was business income and not capital gain and therefore no deduction under section 54EC could have been claimed. Counsel pointed out that this issue was minutely examined by the Assessing Officer in the original assessment proceedings. Any attempt on his part to revisit the claim would be based on mere change of opinion. 6. On the other hand, learned counsel Shri Desai for the department opposed the petition contending that the Assessing Officer has not formed any opinion on this aspect during the original assessment. The assessee was engaged in the business of buying and selling land. Any receipt upon sale of plot of land would therefore form his business income, on which the Assessing Officer wrongly allowed deduction under section 54EC of the Act. The Assessing Officer therefore had jurisdiction to reopen the assessment. 7. We have reproduced the reasons recorded by the Assessing Officer for reopening the assessment. The reasons rely on only one factor viz. assessee's claim of deduction under section 54EC of the Act, on a sum of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner's claim of long term capital gain and sale of land when the petitioner supplied the computation of income alongwith audit report and documents of purchase and sale of the land in question. During the scrutiny assessment also, the Assessing Officer specifically examined the question of petitioner's claim of long term capital gain and deduction relatable to this gain under section 54EC of the Act. It was after such scrutiny that the Assessing Officer passed the order of assessment, in which, he accepted the petitioner's claim by making following observations. 2. During the year under consideration, the assessee has dealt in Real Estate. It is seen that the assessee has sold various plots of land on which he has either shown long term capital gain or has shown the profit earned thereon under the head Income from Profit/Gains of Business/Profession . Various aspects of the transactions so carried out by the assessee have been verified and it is found that the assessee has shown the profits earned thereon under the proper heads of income. 3. The assessee has claimed deduction u/s.54EC in respect of Long Term Capital Gain earned on the sale of land at vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... four years from the end of the relevant assessment year, the concept of change of opinion would be material. The Assessing Officer would have power to reopen the assessment provided that he has tangible material to come to the conclusion that the income chargeable to tax has escaped assessment. 13. In case of Gujarat Power Corporation Ltd. v. Assistant Commissioner of Incometax , reported in Division Bench of this Court held that once the Assessing Officer examines a particular claim under scrutiny assessment, but makes no disallowance in the final order of assessment, mere fact that he did not give reasons for doing so would be of no consequence. The Court observed as under: 42. Bearing in mind these conflicting interests, if we revert back to central issue in debate, it can hardly be disputed that once the Assessing Officer notices a certain claim made by the assessee in the return filed, has some doubt about eligibility of such a claim and therefore, raises queries, extracts response from the assessee, thereafter in what manner such claim should be treated in the final order of assessment, is an issue on which the assessee would have no control whatsoever. Whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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