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TMI Blog2022 (4) TMI 1230X X X X Extracts X X X X X X X X Extracts X X X X ..... date of receipt of a copy of this order. AO shall proceed with the matter and pass appropriate orders, on merits and in accordance with law, after providing an opportunity of personal hearing to the respondent, within a period of four weeks. - Honourable Mr. Justice R. Mahadevan And Honourable Mr. Justice J. Sathya Narayana Prasad For the Appellant : Ms. Hema Muralikrishnan For the Respondent : Mr. V.S.Jayakumar JUDGMENT R. MAHADEVAN, J. An order dated 31.07.2017 allowing the writ petition in WP.No.35607 of 2002, filed by M/s.Gay Travels (P) Ltd, Chennai, relating to the assessment year 1998-99, passed by the learned Judge, is the subject matter of consideration in this writ appeal, which has been filed by the Deputy Commissioner of Income Tax, Corporate Circle 2(1), Chennai. The Revenue is the appellant and the writ petitioner / assessee is the respondent herein. 2.In the said writ petition, the respondent sought to quash the notice dated 16.08.2002 issued by the appellant under section 148 of the Income-tax Act, 1961 (in short, 'the Act') for the assessment year 1998-99. Pertinently, it is pointed out here that by way of WP.No.35606 of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.These two alleged lacunae or irregularities could not be held to be a sufficient reason for issuing a repeat Notice under Section 148 of the Act. Such repeat and subsequent Notice indicates that either the previous officer Mr. S.Ganapathy did not even actually record any reason prior to or on 25.01.2001 or the Successor-in-office Mr.Rajaram was only trying to cover up the so called lacunae or defects. Both are impermissible situations in law, for invoking powers under Sections 147 and 148 of the Act. We are constrained to observe that the reassessment powers were invoked by assessing officers very casually and lightly not adhering to the legal restrictions for exercise of such powers under Section 147/148 of the Act. The Assessee, in these circumstances, when served with the repeat or second notice for the same Assessment years, was compelled to approach the Court of law and seek protection against the the second reassessment Notice for the very same Assessment Year 1997-1998. The learned single Judge in our opinion was absolutely justified in quashing the notice under Section 147 and 148 of the Act for Assessment Year 1997-1998. For Assessment Year 1998-1999 (W.A.No.450 of 2019) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 3,50,00,000/- out of which, they received a sum of ₹ 1,60,00,000/- in the accounting year 1996-97 relevant to the assessment year 1997-98 and a sum of ₹ 1,90,00,000/- in the accounting year 1997-98 relevant to the assessment year 1998-99. They filed their returns in respect of the assessment year 1998-99 on 23.11.1998. The assessment was completed and an order dated 30.03.2001 came to be passed by the assessing officer, stating that the assessee had entered into an agreement with M/s.Shoreline Development Pvt. Ltd for sale of agricultural land for a sum of ₹ 3.50 crores in the financial year 1996-97; the assessment for the year 1997-98 has been reopened and the question of taxing the capital gains arising out of the sale of agricultural land is considered there; and hence, no addition is made on this account in the assessment year 1998-98. 7.2. While so, notice dated 16.08.2002 under section 148 of the Act for reopening the assessment of the year 1998-99 came to be issued. Upon receipt of the same, the respondent sent communications dated 03.09.2002 and 09.09.2002, to the appellant requesting to send the reasons for re-assessing the assessment for the yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome at the time of issuance of notice for reopening the assessment and accordingly, set aside the same and allowed the writ petition. Therefore, the order impugned herein does not require any interference by this court. 10.We have considered the submissions made by the learned counsel on either side and also perused the materials available on record. 11.As pointed out earlier, the reassessment proceedings initiated by the respondent for the years 1997-98 and 1998-99 were quashed by the learned Judge, by the common order dated 31.07.2017. Though the said order was put to challenge by the appellant in WA.Nos.449 and 450 of 2019, the Co-ordinate Bench of this court, by order 22.02.2019, set aside the order relating to the assessment year 1997-98 alone, as there was no fresh material to reopen the assessment by the assessing officer. In respect of the assessment year 1998-99, the Co-ordinate Bench adjourned the appeal in WA.No.450 of 2019 for ascertaining the difference of fact of both the assessment years and what compelled the respondent to again record reasons for reopening the assessment for the year in question. 12.Accordingly, the learned counsel for the appellant filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it is not an agricultural land and it is only a capital asset chargeable to capital gains as per sec 2 (14) of the Income Tax Act, 1961. Since the so called vendor and the so called purchaser did not appear to have registered the sale deed, provisions of section 2(47)(vi) of the Income Tax, 1961 is attracted. According to the income chargeable under capital gains for the asst year 1997-98 had escaped assessment. 2. Without prejudice to the above, income chargeable to profit and gains of business or profession had escaped income chargeable to tax. From these samples of sale deeds found in the records and registers during the year ending 31.3.97 and 31.3.98, it could be seen that the seller or the vendor of the sale was the assessee represented by Power of Attorney and the so called purchaser M/s.Shoreline Developer (P) Ltd. was only a confirming party. The sale agreement dated 4.7.96 reflects certain clauses as under: i) The sale shall be in favour of the purchaser or his nominee or nominees ii) If the purchaser fails to pay the balance sale consideration and complete the sale within 90 days of this agreement then........?.. and to sell the scheduled property to any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng at from the angle of sale amount of the land admitted by letter dated 21.3.2001 for the assessment year 1997-98 and 1998-99. It is stated in that letter, lands sold during the asst year 97-98 was ₹ 1.38 crores. And during asst year 1998-99 38.57 lakhs. Whereas according to the account copy furnished under advance fund M/s.Shoreline Developer P. Ltd. the total receipt is ₹ 3.50 crores. This would also indicate that income chargeable to tax had escaped assessment. 4. On the basis of cumulative reasons stated above, there is reason to believe that income chargeable to tax has escaped assessment for the asst year 98-99. (ABANI KANTA NAYAK) Deputy Commissioner of Income Tax Company Circle II(2) Chennai 600 002 DATE: 16.8.2002 13.That apart, it is the specific contention of the learned counsel for the appellant that there are fresh material to reopen the assessment for the year 1998-99 and hence, notice dated 16.08.2002, under section 148 of the Act, was issued to the respondent / assessee. The respondent sought for reasons recorded by the assessing officer for reopening the assessment on 09.09.2002, but they immediately rushed to the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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