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TMI Blog2023 (2) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of opinion is bad for want of jurisdiction. There is merit in the submission of the learned counsel for the Revenue, inasmuch as for challenging the initiation of reassessment or assumption of jurisdiction of reassessment on the ground of change of opinion, it may be necessary to show / demonstrate that while framing the original assessment the Assessing Officer had applied its mind and formed an opinion and the reassessment is with reference to the very same issue and on the basis of mere change of opinion, without any new tangible material which in the facts of the present case can be arrived at only on a deep/close scrutiny of the documents and books of accounts. Further, with regard to the assessment year 2012-13 as no assessment has been made, the only requirement for the Revenue is to show escapement of assessment to assume jurisdiction. The present case falls under the latter category and to decide the issue viz., whether the assessment is on the basis of change of opinion, a close scrutiny of documents and books of accounts is necessary. The above aspect viz., reassessment is bad as having been made on change of opinion, may require investigation into facts in the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed during the course of the alleged illegal search. If any such objection is raised the same shall be dealt with by the Assessing Officer uninfluenced by any of the observation - finding on various questions of law recorded in this judgment are for the limited purpose of holding that the petitioners have an alternative efficacious remedy available under the Act Writ Petitions filed by the Petitioners /Trustees are dismissed for the reasons set-out above, it is open to the Petitioners/Trustees to pursue their statutory remedies by way of an appeal which is availed of by the petitioners/ Trustees and agitate all grounds that may be available, including lack of jurisdiction before the Appellate Authority. - WMP.(MD).Nos.12778, 12781, 914, 915,15383, 15415, 15351, 15352, 1987, 15354, 15350, 15353, 15355, 15356, 15357, 15358, 15359, 15360, 15384, 15386, 15388, 15389, 15402, 15403, 15405, 15407, 15408, 15411, 15412, 15413, 15414, 15416, 1960, 1963, 1964, 1965, 1966, 1967, 1968, 1969, 1970, 1971, 1972, 1973, 1974, 1975, 1976, 1977, 1978, 1979, 1980, 1981, 1982, 1983, 1984, 1985, 1986, 1987, 1988, 1989, 1990, 1991, 1995, 2147, 15339, 15337, 15338, 15340, 15341, 15344, 15345, 15346, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without even disposing of the objections filed by the Petitioners/ Trustees which is clearly arbitrary and contrary to the procedure contemplated for re-assessment under the Act. As a matter of fact, the objections of the Petitioners/ Trustees were overruled vide orders dated 26.12.2019, 28.12.2019, 29.12.2019, 30.12.2019 and 31.12.2019 subsequent to the orders of assessment. It is submitted that these appeals were filed in view of recovery proceedings being allegedly initiated. However, on obtaining legal opinion, the petitioners were of the view that the impugned order suffers from want of jurisdiction and thus the present batch of writ petitions were filed. 4. It is submitted by the learned Senior Standing Counsel for the Respondents that having filed an appeal, the subsequent filing of writ petition cannot be maintained as the legal position in this regard is fairly well-settled that parallel remedies cannot be pursued. The above attempts / practise is frowned upon by Courts holding that a petitioner cannot ride two horses. This Court finds merit in the above submission of the learned Senior Standing Counsel for the Respondents that having chosen to avail a statutory remedy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal to hear and dispose of the petitioners application under Section 256 on its own merits and taking such view of the facts and law as it may deem fit to take unobsessed by any of the findings recorded hereinabove. Subject to this observation the petitions are dismissed though without any order as to costs. (emphasis supplied) 5. In view thereof, I am not inclined to entertain the above batch of writ petitions filed by the Petitioners/Trustees on the limited ground that the petitioners had availed alternative remedy by way of appeal even before filing of the present set of Writ Petitions. I am not expressing any views on the merits including the ground of the proceedings being bad for want of jurisdiction. It is open to the Petitioners/Trustees to pursue their statutory remedies by way of an appeal which is availed of by the petitioners/ Trustees and agitate all grounds that may be available, including lack of jurisdiction before the Appellate Authority. 6. Now, coming to the writ petitions filed by the Petitioner/Trust challenging the rejection of the objections filed by the Petitioners against re-opening the assessment for the assessment years 2012-13 and 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 37/- against total cost of construction of Rs. 4,99,92,439/- with difference in cost of construction of Rs.3,42,84,402/-, which is unaccounted investment chargeable to tax that has escaped assessment within the meaning of Section 147. Further, the Trustees sold 5.02 acres to trust as per the sale deed dated 01.06.2011 for consideration of Rs.4,07,000/- and the cost reflected in the balance sheet is Rs.4.47.315/-. This land is part of the total land of 17.99 acres purchased by the trustees for Rs.2,60,50,000/- including the unaccounted on - money of Rs.2,25,00,000/-. The trustees transferred part of 17.99 acres, Le. 5.02 acres to the Trust Therefore, source for corresponding payment of Rs.72,69,094 4,47,315) is to be treated as unexplained income of the trust. This sum ought to be assessed in the hands of the trust also for the reason that the trust owns 5.02 acres of land. In these circumstances, have reason to believe that the undisclosed income of the trust of Rs.68,21,779/- was paid for purchasing 5.02 acres of land, which escaped assessment for the A.Y.2012-13. Similarly, have also reason to believe that the cost of construction of Rs.3,42,84,402/- has escaped assessment for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Presumptions cannot be the basis for forming a reason to believe for issuing notice u/s. 148 of the Act. With regard to the undisclosed income of Rs.68.21 Lakhs for purchase of land from trustees, this authority had alleged that this forms part of the land measuring 17.99 acres bought by the trustees by making on money payment to the tune of Rs.2.25 Crores. Land measuring 5.02 acres was transferred by the trustees to the trust for a consideration of Rs.4.47 Lakhs. This authority has claimed that the trustees had made on money purchase to the tune of Rs.2.25 Crores and transferred a part of the land measuring 5.02 acres to the trust. So, the source for the transfer of 5.02 acres which is proportionately valued at Rs. 72.69 lakhs must be taxed as income of the trust. In this connection, we wish to submit that there is no material on record to show that the assessee trust had in fact paid on money to the trustees over above the sale value registered. The sale deed for the transfer of land to the trust mentions the consideration of Rs.4.47 lakhs and we humbly submit that it is the prerogative of the trustees and the trust to decide on the consideration involved and not the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The assessee trust in order to cooperate with the proceedings did not dispute the survey jurisdiction. Consequently, scrutiny proceedings were initiated on the trust for the assessment year 2013-2014 and the assessment was closed without making any addition on the trust. The allegations which are made now have been raised during the scrutiny proceedings and it was explained to the satisfaction of the assessing officer the fact of which is admitted in the assessment order itself. Now, after four years this authority on after thought having a change of opinion have initiated the reopening proceedings to revise or review their own order. CIT, Delhi Vs. The Kelvinator of India Ltd. (2010) 320 ITR 561(SC). iv) No fresh material to initiate proceeding u/s. 147 after a period of four years from the end of the assessment year: As mentioned above scrutiny proceedings were taken up in the case of the assessee trust and details were called for based on the statements and the impounded materials. With regard to the allegations by this authority, these were taken up during the original assessment proceedings for the Assessment year 2013-2014 and the trust had explained the det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clude that the reopening is an exercise to revise its own order and is liable to be dropped. It is necessary for the AO to first state that there is a failure to disclose fully and truly all material facts. If he does not record such a failure, he would not be entitled to proceed u/s147 NYK Line (India) Ltd. v. Dy. CIT (2012) 68 DTR 90 (Bom)(High Court) Titanor components Ltd. Vs. ACIT (2011) 60 DTR 273 (Bombay). vi) Protective reassessment on the trust trustees means that the assessing officer is not sure as to whose income has escaped to form a firm belief: The alleged income which is an unexplained investment for construction of polytechnic building is being reopened for both the trust and the trustee simultaneously, this is in effect a protective assessment. It is apparent from the of assessment in both the trust and the trustee that the assessing officers are not sure about the taxability of the income in the hands of the trust of the trustees. Therefore, it can be concluded that there is no reason to believe as claimed by the assessing officer to reopen the assessment. Sagar Enterprises Vs.ACIT (2002) 124 Taxman 641 (Guj). vii) The notice lacks jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to reopen is a mere change of opinion without new tangible material and thus not a circumstance which would enable exercise of power of re-assessment. It is further contended that the assessing officer having stated in the original assessment that it was a result of survey proceedings, the same is again indicative of the fact that the impugned proceeding to reopen the assessment is a result of change of opinion. c. It is submitted that the college building was constructed out of the voluntary contributions made by the Trustees/ other parties and out of the fees collected from students during the Assessment year 2012-13 and 2013-14. The Petitioner /Trust also obtained a loan from the Bank of India during the financial year 2013-14 towards construction cost. d. That the survey proceedings itself is without jurisdiction inasmuch as Section 133A was amended to enable survey being conducted in respect of Charitable Institution only with effect from 01.04.2017, whereas the Survey of the petitioner/ Trust was conducted on 23.01.2013 i.e., prior to the amendment enabling survey of charitable institutions under Section 133A of the Act and thus the materials impounded/ gathered cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgments is only for the limited purpose of indicating that this case does not warrant interference under Article 226 of the Constitution as it is necessary for the petitioners to participate in the assessment proceeding and raise any/all grounds before the assessing authority. 10. As stated above, I am of the view that the writ petitions filed by the Trustees cannot be entertained at this stage for the following reasons: a. The case of the petitioners / Trustees is that the re-opening of assessment is based on change of opinion. There appears to be lack of clarity, if there was application of mind by the assessing officer while making the original assessment with regard to the above issues i.e., undervaluation of land and source of fund for construction of building. This would be evident from the assessment order which is extracted below: The assessee is a Trust constituted by execution of trust deed dated 04.02.2011. The assessee Trust was granted registration u/s 12AA from the Assessment Year 2011-12 vide order of the Commissioner of Income tax-1, Trichy in No.6162E(30)/2011-12/CIT-1/TRY date 14.02.2012 and approval u/s 80G(5) (vi) of the Act vide order in No. 6162E(34 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,07,91,560/- Amount required to be applied @85% : Rs 91,72,826/- Amount actually spent: Revenue Expenditure : Rs. 82,03,840/- Capital expenditure : Rs. 4,86,28,307/- : Rs 5,68,32,147/- Excess income applied : Rs. 4,60,40,587/- Taxable income : NIL A reading of the above order of assessment would show that there is no reference either to the survey or the issue of undervaluation of the land or the sources of funds for the cost of construction of the building. The submission of the Respondents that there is no formation of opinion on the above issues for the proceedings to be hit by the restriction of reassessment not being permitted on the ground of change of opinion prima facie appears to have merit. While this Court has no doubt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax has escaped assessment, namely:- (a) where income chargeable to tax has been under- assessed; or (b) where such income has been assessed at too low a rate; or (c) where such income has been made the subject of excessive relief under this Act or under the Indian Income- tax Act, 1922 (11 of 1922 ); or (d) where excessive loss or depreciation allowance has been computed. A reading of the above Explanation appears to suggest that mere production of books of accounts or other evidence would not by itself tantamount to disclosure within the meaning of the foregoing proviso even if material evidence could with due diligence have been discovered by the assessing officer. Whether the above Explanation would apply to the facts of the case again requires examination of books of accounts and other documents by the Assessing Officer and not under Article 226 of the Constitution of India. The above exercise requiring a close look at/ examination of books of accounts and other documents is alien to the jurisdiction conferred on this Court under Article 226 of the Constitution of India. 13. This Court prima facie finds that there is merit in the submissions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the legislation, it was observed that a writ petition ought not to be entertained in view of the alternate statutory remedy available holding :(SCC pp.123 128, paras 43 55). 43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this Rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial insitutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary jurisdiction under Article 226 of the Constitution ignoring as it were, the complete statutory machinery. That it has become necessary, even now, for us to repeat this admonition is indeed a matter of tragic concern to us. Article 226 is not meant to short-circuit or circumvent statutory procedures. It is only where statutory remedies are entirely ill-suited to meet the demands of extraordinary situations, as for instance where the very vires of the statute is in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to Article 226 of the Constitution. But then the Court must have good and sufficient reason to bypass the alternative remedy provided by statute. Surely matters involving the revenue where statutory remedies are available are not such matters.'' (emphasis supplied) 14.2. It may also be relevant to refer to the recent judgment of the Hon'ble Supreme Court of India in the case of State of Maharastra and Others vs. Greatship (India Limited) , reported in 2022 SCC Online SC 1262 , wherein it was held as under: 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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