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TMI Blog2022 (7) TMI 1141X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of Section 151 of the Act. Therefore the entire reopening of assessment vis- -vis quashed. Though there is merits in the arguments of the assessee that the reasons recorded by the Assessing Officer is also not clear relating to which assessment year the income is said to be escaped or taxation. As we have quashed the entire assessment proceedings on the point of sanctioning authority u/s. 151. We are not addressing the other aspects of the reopening of assessment. Furthermore this has attained finality by the Jurisdictional High Court in the assessee's own case for the A.Y. 2006-07 holding that the sale of shares to be treated as Long Term Capital Gains only and not as Business Income . In the result, the appeals filed by the Assessees are allowed consequently the Revenue appeals are dismissed. - ITA Nos. 1347/Ahd/2015, 1858/Ahd/2015, 2792/Ahd/2017, 1398/Ahd/2015, 1855/Ahd/2015, 1399/Ahd/2015, 1856/Ahd/2015 & 1400/Ahd/2015 - - - Dated:- 13-7-2022 - Shri Waseem Ahmed , Accountant Member And Shri T. R. Senthil Kumar , Judicial Member Appellant by : Shri Bandish Soparkar Shri Parin Shah, A. R. Respondent by : Shri Ajai Pratap Singh, CIT/DR. Shri V.K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee and penalty proceedings is also be initiated. 3. Aggrieved against the same, the assessee filed an appeal before the Ld. Commissioner of Income Tax (Appeals)-3, Ahmedabad. The Ld. CIT(A) uphold the reopening of assessment as good in law and applying CBDT circular No. 4/2007 dated 15.06.2007, the Ld. CIT(A) held that profits on sale of shares held by the assessee is to be treated as Long Term Capital Gain and also liable to be taxed at 20% as per Section 112 of the I.T. Act. 4. Aggrieved against the same both the assessee and the revenue are in appeal before us raising the respective grounds of appeal: ITA N. 1347/Ahd/2015 for A.Y. 2005-06 (Assessee's appeal) 1. Ld. CIT (A) erred in law and on facts in confirming re - opening of assessment u/s. 148 of the Act beyond a period of 4 years. Ld. CIT (A) ought to have quashed reassessment as being without jurisdiction. It be so held now. 2. Ld. CIT (A) erred in law in examining the issue of rate of tax on long term capital gain on sale of shares which is not raised before him and without jurisdiction. It be so held now. 3. Ld. CIT (A) erred in law and facts in holding appellant liable for tax @ 20% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares. Therefore, the income arising from the said transaction in F.Y. 2005-06 is required to be taxed as business income and not capital gains . In view of the above, I have reason to believe that the income has escaped assessment and therefore this proposal. (RANJIT SAH) Income Tax Officer, Ward-7(2), Ahmedabad 5.1. The assessee counsel also taken us through the paper book wherein an approval u/s. 151 of the Act is given by the Joint Commissioner of Income Tax Range-7 for reopening the assessment which reads as follows: Please refer to your letter No. ITO. Ward-7(2)/Proposal/2011-12 dated 29.02.2012 on the above subject. Your proposal for initiating proceeding u/s. 147 have been approved in the following cases. Proforma approval in these cases is enclosed for necessary action. Sr.No Name PAN A.Y. 1 Kantaben S Mehta ABLPM3419K 2005-06 2 Ushaben P Mehta ABOPM4406D 2005-06 3 Sonal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the assessing officer has not recorded any escaped income for the assessment year 2005-06. Thus the reasons recorded are fundamentally, invalid and illegal. This reasons recorded by the A.O., for escaped assessment income is approved by the Joint Commissioner who has also not applied his mind while sanctioning the reopening and also what income has escaped for the assessment year 2005-06. Further the Joint Commissioner is not the competent authority under 151 of the Act for sanctioning the reopening of assessment since it is beyond 4 years period from the end of the assessment year. Thus the entire reopening of assessment itself is against the provisions of Section 147 and entire proceedings is liable to be quashed. 5.4. The alternative prayer of the assessee is that even if it is to be believed the assessing officer has recorded the reasons for A.Y. 2005-06, even then it is submitted that the foundation of such belief are the transactions relating to the Assessment Year 2006-07 for which proceedings u/s. 263 were initiated. That revision proceedings was assailed in appeal by the assessee before the Tribunal vide order dated 18.09.2017 in ITA No. 1921 to 1924/Ahd/2014 has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein the respective Joint Commissioner is the sanctioning authority for reopening of such assessment. The reopening of assessment after the expiry of four years period, the sanctioning authority are either Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner only. In this case no doubt for the Assessment Year 2005-06 and reopening of notice was issued in 2012 which is beyond four years period but however Joint Commissioner of Income Tax, Range-7 by his letter dated 9.3.2012 sanctioned for the reopening proceedings, which is clearly against the provisions of Section 151 of the Act. Therefore, the entire reopening assessment itself is vitiated and against the provisions of Section 151 of the Act. Therefore the entire reopening of assessment vis- -vis quashed. Though there is merits in the arguments of the assessee that the reasons recorded by the Assessing Officer is also not clear relating to which assessment year the income is said to be escaped or taxation. As we have quashed the entire assessment proceedings on the point of sanctioning authority u/s. 151 of the Act. We are not addressing the other aspects of the reopening of assessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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