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TMI Blog2019 (12) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... gest that any income had escaped assessment. Since, in the present case there was full disclosure and in fact, the amount had even become the subject matter of the assessment both under Section 158 BC and Section 143(3) of the I.T. Act, there could have been no reason to believe that the income chargeable to tax had indeed escaped assessment. In Asian Paints Ltd. [ 2008 (7) TMI 237 - BOMBAY HIGH COURT] this Court had held that in a situation where according to the assessing officer he failed to apply his mind to relevant material in making assessment order, he cannot take advantage of his own wrong and reopen assessment by taking recourse to provisions of section 147/148 of the I.T. Act. In the present case, the assessing officer in the course of regular assessment had in fact asked for information in relation to this very amount of 10.33 Crores. This information was duly furnished by the petitioners. Only thereafter, the assessing officer made orders dated 21.03.2005 under Section 143(3) of the I.T. Act. In these circumstances, it was no longer open for the respondents to issue the impugned notice under Section 147/148 of the I.T. Act. X X X X Extracts X X X X X X X X Extracts X X X X ..... rs - (2009) 183 TAXMAN 0040 (Bom); (b) GKN Sinter Metals Ltd. vs. Ms. Ramapriya Raghavan, Assistant Commissioner of Income Tax and others - (2015) 232 TAXMAN 0386 (Bom); and (c) Asian Paints Ltd. vs. Deputy Commissioner of Income Tax - (2009) 308 ITR 195 (Bom) . 5. Mr. Kantak, further submitted that after the institution of the present petition, the department's appeal, against order dated 13.07.2006 made by the Commissioner (Appeals), also came to be dismissed by the Income Tax Appellate Tribunal (ITAT) vide order dated 03.12.2009. Mr. Kantak submits that further, the parties to whom the amount of ₹ 10.33 Crores was owed, instituted arbitration proceedings claiming such amount and secured an award in their favour. He points out that in pursuance of such award, the petitioners, after seeking permission from the Reserve Bank of India, remitted such amount to such parties. Mr. Kantak submits that all these subsequent events clearly established that the amount of ₹ 10.33 Crores, was not at all the petitioners' income, but it was only a liability, which was disclosed to the respondents from time to time and which liability, the petitioners, have ultimately dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain parties, in terms of which, they had accepted certain advances/booking amounts towards room nights for the period between October, 1994 to October, 1997 in some cases and 01.10.1997 to 31.05.2001 in some other cases. It was also the case of the petitioners that such agreements were renewed from time to time however, for the present, we are not really concerned with the issue of renewals. The total of such amount came to approximately ₹ 10.33 Crores. 11. Some time in the year 2000, proceedings under Section 132 of the I.T. Act were undertaken and a search was made at the office and residential premises of the petitioners. In pursuance of the same, a block assessment was carried out which resulted in the making of order dated 27.09.2002 under Section 158 BC of the I.T. Act. By this order, an addition of ₹ 10.33 Crores was made to the income of the petitioners as unexplained cash credits. 12. The petitioners, appealed against the order dated 27.09.2002 to the Commissioner (Appeals), who, vide order dated 13.07.2006, set aside the order dated 27.09.2002, thereby deleting the addition of ₹ 10.33 Crores. On 13.09.2006, the respondents, appealed against the order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been furnished by the petitioners, in respect of this amount of ₹ 10.33 Crores. 16. From the aforesaid, it is quire clear that this was not at all a case where it could be said that the amount of ₹ 10.33 Crores had in fact escaped assessment for assessment year 2002-03. In order to issue notices under Section 147/148 of the I.T. Act proposing to reopen the assessment, the respondents, must have reason to believe that the income has escaped assessment. With the aforesaid facts, it can never be said that the amount of ₹ 10.33 Crores had indeed escaped assessment. Record indicates that this amount had in fact been assessed at two stages i.e. at the stage of block assessment in terms of Section 158 BC of the I.T. Act and regular assessment for the assessment year 2002-03, in terms of the orders dated 21.03.2005 made under Section 143(3) of the I.T. Act. The most important jurisdictional parameter for issuance of impugned notice dated 18.10.2006, being absent, the impugned notice cannot be sustained and is liable to be interfered with. 17. In Smt. Mira Ananta Naik and others (supra), in somewhat similar circumstances, the division bench of this court held that the is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is reason to believe that the income chargeable to tax for the relevant assessment year has escaped assessment without anything more, cannot be said to be something which would enable the authorities to invoke s. 147 of the IT Act in the peculiar facts of this case. The notices are identical and neither any details of the income chargeable to tax are disclosed in the notice nor it has been set out as to how that can be termed as having escaped assessment within the meaning of s. 147. The reasons supplied are recorded in an order sheet for the years in question. The reasons in the order-sheets and the same being supplied only after reminders to the Department. There is much substance in the contentions of Shri Nadkarni that the search having resulted in block assessment and the Department having resorted to s. 158BA to s. 158BC of the IT Act, it cannot be said that the income escaped assessment. In these proceedings the income was assessed and taxed after it was brought to the notice of the AO. Merely because the block assessment was not upheld by the authorities under the IT Act, it cannot be reason enough in this case to invoke s. 147 of the same. The income has not escaped as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o submit that the impugned notice was issued by applying the principles laid down in this decision. In this case, the Hon'ble Supreme Court has held that if an amount is received in course of trading transaction, even though it is not taxable in the year of receipt as being of revenue character, the amount changes its character when the amount becomes the assessee's own money because of limitation or by any other statutory or contractual right, so the amount should be treated as income of the assessee. 22. According to us, the principle in the case of M/s. T.V. Sundaram Iyengar & Sons Ltd. (supra), was not attracted in the facts and circumstances of the present case. This is because the reasons furnished to the petitioners stated that the contracts with the parties expired on 31.05.2001 and the amount of ₹ 10.33 Crores was sought to be assessed as income for the assessment year 2002-03 i.e. well within the period of limitation during which the opposite parties could have as well recovered the amount. Besides, this is a case where the petitioners, had consistently, indicated the said amount as a liability and further, made full disclosure to the respondents. The respo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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