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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 ..... then the High Court must in all fairness allow the Department to conduct an adjudication by affording opportunity to the assessee, so as to conclude the proceedings, and in this regard, it is to be reiterated that the benefit of doubt in certain factual aspects must be held in favour of the Revenue and not in favour of the assessee. This being the principles to be adopted, this Court has no hesitation in arriving a conclusion that there is reason to believe for reopening of assessment and the reasons furnished by the Department can not be construed as change of opinion. - W.P.Nos.3005 of 2013 & 28434 of 2014 And M.P.No.1 of 2014 - - - Dated:- 23-4-2021 - Honourable Mr.Justice S.M. Subramaniam For the Petitioner : Mr.G.Baskar For the Respondent : Ms.Hema Muralikrishnan, Senior Standing Counsel COMMON ORDER W.P.No.3005 of 2013 is preferred challenging the proceedings dated 11.01.2013 issued by the Deputy Commissioner of Income Tax, Company Circle IV(1), Chennai regarding proposal to complete the assessment and calling for objections on initiation of proceedings under Section 147 of the Income Tax Act, 1961 (hereinafter referred to as the IT Act ). Notice unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said amount in the order of assessment more specifically in paragraph 1.7 where the Assessing Officer made a finding that the interest income of ₹ 1,55,65,851/- is treated as income from other sources and taxed accordingly. Para 2.1 of the assessment order was also relied upon, which reads as hereunder:- 2.1. In the computation, the assessee company had adjusted the income and expenses pertaining to Guindy lodge and club house. However, on verifying the P L, it was found that the expenses in P L in the computation differs. From the details filed it was found that the expenses claimed in the Guindy Lodge comes to ₹ 4,20,25,342/- as against the amount of ₹ 3,94,36,300/- and ₹ 28,73,507/- as against ₹ 25,56,190/- with respect of Club House. Hence the difference is also added back to the expenses respectively. When this was pointed out the AR has not submitted any reply. Since the assessee company had filed inaccurate particulars thereby concealing income penalty u/s 271(1)(c) are separately initiated. 6.Based on this, the learned counsel for the petitioner in order to assail the initiation of proceedings for reopening of assessment under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... your appellant would like to say that various High Courts have given judgment for and against the issue. In fact the Delhi Gymkhana Club vs. DCIT in ITA No.3585/Del/21006 has held it in favour of the assessee. The Supreme Court decision quoted by the Assessing Officer is not relevant to the facts of the appellant case. Hence, as the matter has not reached a finality your appellant prays to consider the interest income under business income as returned. In any event since Supreme Court has held to Bankipur Club that interest income for the part of mutuality income it cannot be assessed as income from other sources. Alternatively, the appellant prays that the interest income if it is assessable, it has to be assessed as business income and included in the total income, the carried forward business loss u/s 72 has to be allowed against such business income. 8.Relying on the said portion of the order passed by the Commissioner, the learned counsel for the petitioner contended that even the reasons stated as of now are untenable and therefore, the impugned order is liable to be set aside. The impugned proceedings are nothing, but change of opinion, as the reasons stated were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings. 13.As far as the other reasons stated with reference to the Lease Deed with DLF Properties Private Limited are concerned, the learned Senior Standing Counsel relied on Explanation 3 to Section 147, which enumerates for the purpose of assessment or reassessment under the Section 147, the Assessing Officer may assess or reassess the income 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. Relying on the said Explanation, the learned Senior Standing Counsel reiterated that during the course of proceedings, if any new materials are identified or traced out, then the said ground also may be included for the purpose of further adjudication and when the provision of law empowers the authority to consider those new grounds also, it is for the assessee to submit their explanation/objection and contest the matter before the authority concerned and not before the High Court in a writ proceedings. 14.This Court is of the considered opinion that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the experts and such an exercise cannot be done by the High Court more specifically in a writ proceedings wherein, the very initiation of proceedings for reopening of assessment is under challenge. Even the benefit of doubt in this regard should be held in favour of the Revenue and not in favour of the assessee. Even in case where the petitioners are raising certain doubts regarding the reason to believe and if the Department arrives certain reasons in respect of factual aspects and the informations provided or the income disclosed then the High Court must in all fairness allow the Department to conduct an adjudication by affording opportunity to the assessee, so as to conclude the proceedings, and in this regard, it is to be reiterated that the benefit of doubt in certain factual aspects must be held in favour of the Revenue and not in favour of the assessee. This being the principles to be adopted, this Court has no hesitation in arriving a conclusion that there is reason to believe for reopening of assessment and the reasons furnished by the Department can not be construed as change of opinion. 17.Accordingly, W.P.No.3005 of 2013 fails and stands dismissed. 18.As fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment. The submission of Shri Shambhu Chopra learned counsel appearing for the Revenue that the limitation will start again only when the order is communicated to the Department thus cannot be accepted. The other reason for not accepting the above submission is also equally potent. Explanation 1 (v) and (vi) to Section 153 of the Act, 1961 are also part of the same statutory scheme. In Explanation 1 (v) and (vi) to Section 153 of the Act, 1961 the statutory scheme provides for computing the period of limitation from the date when the order under sub-section (1) of Section 245D and 245Q is received by the Commissioner. Thus, the legislature has provided for excluding the period from the date of communication of the order where they so intended. The use of concept of communication of receiving the order in the same provision which is absent in Explanation 1 (ii) concerned clearly indicates that for the purposes of Explanation 1 (ii), the communication of the order of the Court vacating the stay order or injunction is not contemplated. 20.In yet another case in CIT vs. Drs. X-Ray Pathology Institute (P.) Ltd. reported in (2013) 385 ITR 27 (All), the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income-Tax [1993] 202 ITR 671 (Cal) and of the Madras High Court in Thanthi Trust v. Income Tax Officer [1989] 177 ITR 307 (Mad) and urged that the period of limitation of one year in terms of Section 153 (2) of the Act should be reckoned only after the vacation of the stay by this Court, in which case the impugned order of assessment would be within time. He submitted alternatively that, in terms of the first proviso to Explanation 1 to Section 153 of the Act, the period of limitation got extended by 60 days from 2nd December, 2016, i.e. the date of receipt by the Revenue of the certified copy of the order of this Court. 17. .......... 18. In any event, clause (ii) to Explanation 1 only excludes from the computation of limitation the period during which the assessment proceeding is stayed by an order or an injunction of any court. It does not exclude the period between the date of the order of vacation of stay by the Court and the date of receipt of such order by the Department. Therefore, in the present case, the Revenue cannot take advantage of the fact that it received a copy of the order dated 9th November 2016 of this Court only on 2nd December 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plated expired. However, the fact remains that the interim order granted initially on 06.02.2013, which was extended up to 08.06.2014 was neither extended nor vacated by the High Court subsequently. Admittedly, the High Court has not passed any orders either vacating the stay or extending the stay. Thus, no order has been passed on the date of expiry. In practice, the cases are not listed on the date of expiry of interim order in all circumstances by the Registry of High Court, for which the litigants should not made to suffer. In most of the writ petitions, even after the expiry of interim orders, the cases are not listed for various reasons. It is a practical difficulty being faced by the High Courts across the country, as large number of litigations are pending. When the cases are not listed on a particular day more specifically on the day of expiry of an interim order, then the parties cannot be penalised or blamed for non-listing of the matter for hearing, nor parties should made to suffer for the practical difficulties being faced by Courts. In this context, it is to be construed that in the absence of any order passed by the High Court either vacating the interim order or ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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