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TMI Blog2021 (5) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... dings was granted by this Court. 2.The learned counsel appearing on behalf of the petitioner made a submission that the petitioner-Club is incorporated in terms of Section 25 of the Indian Companies Act, 1956 and having its registered office at Chennai. 3.With reference to the disputes raised for reopening of assessment, it is contended that the very initiation per se untenable in view of the fact that the reasonings given were already considered by the Assessing Officer during the original assessment and the appellate authority, viz., the Commissioner of Income Tax (Appeals)-VI, Chennai (for brevity "the Commissioner") also confirmed such findings made by the Assessing Officer in respect of the said assessment year 2007-08. Thus, there is no reason to believe for reopening of assessment, but the impugned reasons amount to change of opinion. Thus, the very initiation of proceedings is not in consonance with the requirements contemplated under Section 147 of the IT Act and the same is liable to be set aside. 4.In support of the contention, the learned counsel for the petitioner solicited the attention of this Court with reference to the computation of profits for the year ended 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shows that the assessee was in receipt of interest income of Rs. 1,55,65,851/- and the profit and account shows the lease rent of Rs. 3.90 crores, which does not seem to have the character of racing income or mutuality income, had been adjudicated and a clear finding was provided. Thus, the same cannot be considered as a new material or otherwise for the purpose of initiation of proceedings under Section 147 of the IT Act. The assessee submitted their submissions to the Assistant Commissioner of Income Tax on 08.06.2011. In the said letter also, the assessee has elaborated the factual matrix and the details regarding the assessment order already passed. 7.The assessment order was taken by way of an appeal before the Commissioner and the appellate order was passed on 28.03.2012 wherein, the said objections stated as reasons in the impugned proceedings were adjudicated and the Commissioner made the following findings at para 8.1, which read as hereunder:- "8.1. The AR filed written submission on 28.11.2011 and objected to the disallowance on the ground that: "The Assessing Officer has come to the conclusion based on and relying the following case laws, that even in case of mutua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds are relatable to the Lease Deed entered into by the assessee with DLF Properties Private Limited. It is contended that the reasons furnished in the proceedings should stand for its own and it cannot be substituted by another reason. Thus, any other further reason provided in the impugned proceedings dated 11.01.2013 are untenable and not in consonance with the provisions of the IT Act. 10.In support of the claim, the learned counsel for the petitioner is of an opinion that the very reason constituting ground for initiation of 147 proceedings is untenable and it is only a change of opinion and thus, liable to be set aside and the writ petition is to be allowed. 11.The learned Senior Standing Counsel appearing on behalf of the respondent objected the contentions raised on behalf of the petitioner strenuously by stating that the case on hand is a case to be adjudicated by the Assessing Officer. The reason to believe is established and the details and other grounds raised by the petitioner are to be adjudicated by the Assessing Officer, as the scope of the writ petition cannot be expanded so as to adjudicate those disputed facts on merits with reference to the documents and ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs initiated for reopening of assessment and the process is in progress and the very initiation itself is under question in a writ petition and under these circumstances, an opportunity is to be provided to either of the parties to place their records, documents and evidences for effective completion of the proceedings. In the event of any finding on merits, the same would affect or cause prejudice to either of the parties and the High Court may not do so. Contrarily, the disputed documents and evidences with reference to the grounds raised are to be adjudicated in detail both by the petitioner and the respondent during the course of proceedings and not before the High Court. 15.As far as the contention raised by the petitioner is concerned, that a new ground cannot be added, Explanation 3 to Section 147 is unambiguous and the provision contemplates in respect of any issue which has escaped assessment and such issue comes to his notice subsequently in the course of the proceedings under Section 147, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-Section (2) of Section 148. Thus, the authorities competent are empowered to ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide on the ground of limitation. It is contended that the interim stay granted by the High Court on 06.02.2013 was extended till 08.06.2014. On 08.06.2014, the stay granted by the High Court was not extended and expired. Thereafter, on 04.07.2014, W.P.No.3005 of 2013 was dismissed. Thus, the time limit prescribed under proviso to Section 153(2) to pass an order of reassessment expired (60 days from 08.06.2014 as per Explanation 1 to Section 153(2)). Thus, the reassessment order passed under Section 143(3) read with Section 147 in proceedings dated 24.10.2014 is non est in law and liable to be quashed. 19.The learned counsel appearing on behalf of the writ petitioner mainly contended that the issue has been considered by the Allahabad High Court in the case of Commissioner of Income Tax, Agra vs. Chandra Bhan Bansal reported in (2014) 46 taxmann.com 108 (All) wherein, a finding was made that in such circumstances where the interim order was not extended, then the period of limitation expired and the order of reassessment is to be set aside. Para 10 of the judgment, which is relevant, stands extracted hereunder:- "10.The above statutory scheme clearly indicates that for computing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no procedure in the High Court to communicate the order to the party to make it effective. The provisions of the income tax Act for filing of the appeal from the date of service of the order will not be attracted to calculate the period of limitation to complete the assessment. In the present case, we are not concerned with limitation for any particular act to be performed, but the arrest of the limitation by an interim order passed by the High Court. As soon as the order was vacated, the limitation will restart and will exhaust itself on the period of limitation provided under the Act." 21.The learned counsel for the petitioner also relied upon the decision of the Delhi High Court in the case of Saheb Ram Om Prakash Marketing Pvt Ltd., vs Commissioner Of Income Tax & Ors., reported in 398 ITR 292. The relevant paragraphs are hereunder:- "12. In the counter-affidavit the stand taken by the Revenue is that the order of this Court dated 9th November 2016 dismissing the Assessee's writ petition W.P. (C) No. 1738 of 2013 was received in the office of Principal CIT-8 only on 2nd December 2016. Thereafter notice was issued to the Assessee on 6th December 2016 under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 2007-08. The High Court admitted the writ petition and granted interim stay of all further proceedings for the assessment year 2007-08 on 06.02.2013. Normal limitation under Section 153(2) to pass reassessment order ended on 31.03.2013. Difference between the above two dates is only 53 days. In this context, it is contended that interim stay granted on 06.02.2013 extended till 08.04.2014 thereafter, the interim stay was not extended and expired on 08.06.2014 and W.P.No.3005 of 2013 was dismissed on 04.07.2014. 24.The learned counsel for the petitioner is of an opinion that once the stay expired automatically, then the limitation should be reckoned from the date of expiry of the stay and not from the date of communication of the final order passed in a writ petition as contended by the respondent. The respondent relied on the final order passed in the writ petition on 04.07.2014. Thus, the very interpretation regarding the period of limitation as explained by the respondent in their order is untenable. 25.This Court is of the considered opinion that a pragmatic approach is required in such circumstances and the situations prevailing in the High Courts are to be considered. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... municated, it may not be possible for the Income Tax Department to act in a particular manner. In the event of no order, the Department has to wait for the orders to be received and cannot presume or assume certain implications and take a decision. Thus, the Income Tax Department has rightly acted upon based on the final order passed in the writ petition and the automatic expiry theory as contemplated by the petitioner cannot be taken into consideration for the purpose of reckoning the period of limitation with reference to the provisions of the IT Act. This apart, W.P.No.3005 of 2013 was dismissed on merits. Thus, no further adjudication on merits is required in respect of the present writ petition, as the present writ petition has been filed challenging the proceedings dated 24.10.2014, which is the reassessment order passed by the competent authority. 27.Accordingly, W.P.No.28434 of 2014 stands dismissed. The petitioner is at liberty to file a statutory appeal and raise all the grounds raised in this writ petition before the appellate authority for the purpose of redressing their grievances in the manner known to law. In the event of filing any such statutory appeal, the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X
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