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TMI Blog2023 (2) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... working of capital gain or such income along with the evidences. In response to the said notice, the Petitioner submitted its reply giving details of the investments and stated therein that during the year, there was no purchase and sale of the shares, except redemption of preference shares of M/s G.R. Infratech Pvt. Ltd. It, thus, appears to be clear that the issue pertaining to redemption of preference shares must be deemed to have been considered while passing the Order of assessment under Section 143(3) by the assessing officer. Since an Order under Section 143(3) had been passed, pursuant to a query raised, which was responded to, it must be presumed that the Order under Section 143(3) had considered all issues notwithstanding the fact that no specific mention is made in that regard in the Order of assessment. Decided in favour of assessee. - WRIT PETITION NO.3110 OF 2019 - - - Dated:- 9-2-2023 - DHIRAJ SINGH THAKUR KAMAL KHATA, JJ. For the Petitioner : Mr. Vipul Joshi a/w Ms. Dinkle Hariya i/b Ms. Rashmi Vyas. For the Respondents : Mr. Suresh Kumar. ORDER PER DHIRAJ SINGH THAKUR, J. The Petitioner challenges the notice dated 29 March 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had escaped assessment within the meaning of Section 147 of the Act. 7. The reasons recorded for reopening are as under : Reasons for reopening As per the information received in this office, it is seen that high value cash was deposited in the bank accounts to several individual/proprietorship concern like Das Brother, Utsav Trader, Maa Kali Enterprises, Blosom Traders etc. which further transfer immediately to M/s Stylo Mania Fashion Pvt. Ltd., M/s Ishwari Fashion Suppliers Pvt. Ltd., M/s Life Fashionwear Suppliers Pvt. Ltd. and subsequently the accounts were closed in very short span of time (Opened of June, 2011 and closed on June, 2011) followed by immediate transfer to several other bank accounts. These appear to be as pooling accounts for layering and routing funds. 2. In order to examine nature and creditworthiness of transactions, summons was issued to the principal officer of the above concerns. However, the summons was returned un-served by the department of post. An inspector was also deputed to conduct spot enquiry about existence and business activity of the above entity/companies. Summons was also issued to other intermediary companies but no r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer and that the reopening was nothing but a change of opinion. 10. In the reply filed by the revenue, it has not been denied at all that the Petitioner had sold 7,50,000 redeemable preference shares to JDPL as can be seen from a reply para 3.3 of the reply affidavit. Equally so, para 3.4 of the reply affidavit does not in any manner contradict the fact that audited financial statements and tax audit report of the Petitioner along with computation of income for the assessment year 2012-13 were on record and that the transactions were duly recorded in its books. What is stated in reply is that These facts are as per the return of income filed by the assessee and based on facts available on record. Therefore, no comments are offered. 11. Section 147 of the Act authorizes the assessing officer to reopen the assessment, which falls broadly under two categories i.e. reopening within a period of four years from the end of the relevant assessment year and a reopening after four years from the end of the relevant assessment year. In so far as the reopening within a period of four years from the end of the relevant assessment year is concerned, the A.O. can reopen if he ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any other ground, proceeded to allow the Petition and set aside the notice impugned therein holding that the jurisdictional requirement of proiviso to Section 147 of the Act had not been complied with by the assessing officer. 16. In the present case also, the assessing officer has not recorded that there was any failure on the part of the assessee to disclose fully and truly the material facts, which were otherwise necessary for assessment. Therefore, the jurisdictional conditions for exercise of power of reassessment under Section 147 of the Act beyond the period of four year had not been satisfied by the assessing officer. The proceedings impugned are, therefore, liable to be set aside on this ground alone. 17. Notwithstanding the above, the assessing officer could have proceeded to reopen the assessment proceedings only if he had reason to believe that income had escaped assessment. In Commissioner of Income-tax Vs. Kelvinator of India Ltd [2010] 320 ITR 561 (SC), the Supreme Court held that while the assessing officer has power to reopen, he had no power to review and that the reassessment has to be based on fulfillment of certain pre-conditions and that if conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, follow that the reopening of the assessment by impugned notice dated 28 March 2013 is merely on the basis of change of opinion of the Assessing Officer from that held earlier during the course of assessment proceeding leading to the order dated 12 October 2010. This change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment. 20. Testing the facts of the present case on the touchstone of the law as discussed hereinabove, it can be seen that during the course of the earlier proceedings under Section 143(3), the Petitioner in its Note 10 annexed with the Auditor's report dated 24 August 2012, had shown Rs.75,00,000/- on account of redemption of preference shares of G.R. Infratech Pvt. Ltd. 21. The assessing officer in his notice issued under Section 142(1) dated 10 September 2014 required the Petitioner to submit various details, which included profit on sale of investments/shares/capital assets, details and working of capital gain or such income along with the evidences. In response to the said notice, the Petitioner submitted its reply giving details of the investments and stated therein t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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