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TMI Blog2023 (5) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... e was declared by the petitioner at Rs.4,50,39,100/-. It is the case of the petitioner, that the return of the income of the petitioner was taken up for scrutiny and number of notices were issued specifically to verify computation of gain/loss on sale of property and the deduction from the capital gains. It is the case of the petitioner that the first notice was issued under Section 142(1) of the Income Tax Act on 15.08.2019 (hereinafter referred to as the "Act") and thereafter second notice on 27.11.2019, asking petitioner to justify the claim in relation to long term capital gains and release of 23% share in the land on Block No. 130 of Jahangirabad, Adajan, Surat. The said notices came to be replied by specific detailed replies on 30.08.2019 as well as 29.11.2019 and after considering all the details and documents submitted during the course of original assessment proceedings, the assessing officer assumed assessment on 04.12.2019 under Section 143 (3) of the Act accepting return of income as assessed income without making any addition. 2.1. It is the case of the petitioner that despite such detailed assessment which has been undertaken, on 28.03.2021 after almost a period of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer has passed an order of assessment and no addition was made and as such, now taking a different opinion to initiate steps, impugned in the petition, same is impermissible as is based upon mere change of opinion, and for this purpose, learned advocate Mr. Soparkar has referred to relevant pages from the petition compilation and as such, has requested that any action based upon a mere change of opinion is impermissible. To substantiate his contention, learned advocate Mr. Soparkar has referred to few decisions which are in the case of Premium Finance (P.) Ltd., v Asst. CIT., reported in [2016] 73 taxmann.com 369; in the case of Gujarat State Board of School Textbooks v Asst. CIT reported in [2016] 75 taxmann.com 281; in the case of Bhagirathbhai Manubhai Baldha (Pithavadiwala) v. Deputy Commissioner of Income Tax reported in [2018] 94 taxmann.com 94 (Gujarat) as well as in the case of Gujarat Power Corporation v. Assistant Commissioner of Income Tax reported in 350 ITR 266 (paragraph 41-42); in the case of Cliantha Research Ltd., v. Deputy Commissioner of Income Tax reported in [2013] 35 taxmann.com 61 (Gujarat) and by referring the relevant observations contained in the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of assessment. 4.2. Learned advocate Mr. Soparkar has then submitted that on the contrary undisputedly the document which has been executed is relating to an agricultural land which is quite clear from the documents attached to the petition compilation on page 78 which clearly indicate that in the description it is mentioned as agricultural land and later on learned advocate Mr. Soparkar has drawn attention of this Court to the Jantri rate which are prescribed by the government vide Resolution dated 18.04.2011 reflecting on page 106 and has indicated that what has been paid by way of stamp is based upon valuation of the agricultural land whereas the authority has voluntarily committed mistake by taking valuation on the basis of as if it is open piece of land. When the document itself is executed based upon the agricultural status of the land, there is hardly any reason for the authority to sit over determination arrived at by the stamp authority. In fact, the proceedings which were taken up by the Deputy Collector decided on 16.10.2017 in which, after scrutiny of everything, it is observed that whatever stamp which has been utilized for the purpose of transaction, the valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning the issue of action, few facts are not possible to be unnoticed by the Court. 7. First of all on perusal of the sale document which got registered before the registered authority reflecting on page 78 of the petition compilation clearly indicates description of the property as " DIST-Surat, S.D., Adajan, Village Jahangirabad, Block No. 130 R.S. No. 182/2/1 AGRI Land" and stamp which has been paid on that is Rs.25,17,000/- and so the document in every way clearly indicate that what has been transacted is an agricultural land. This document was cleared by stamp authority which is reflecting from page 108 an order dated 16.10.2017 in which after hearing parties, a specific order is passed by the Deputy Collector, Stamp Valuation Department, Surat whereby stamp which has been paid and utilized of Rs.25,17,000/- is accepted as provided. 7.1. Further valuation which has been determined by the stamp authorities of State based upon Resolution dated 18.04.2011 as indicated, the valuation of the description of the properties at Rs.11,750/- per sq.mtr., is the valuation advised for the open plot whereas Rs.5100/- per sq.mtr., is determined as valuation of the agricultural land which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in item no. 4 the issue relating to 'large cash deposits in the bank account assessee has also purchased/sold one or more property during the year has been dealt with and no addition is made. 10. Now in respect of this stand being taken by the learned counsel appearing for the petitioner, the respondent authority has submitted a detailed reply by indicating that the provisions of Section 50C of the Act is clearly applicable in the present case and the petitioner has failed to furnish any new information as demanded at the time of original assessment under Section 143(3) of the Act on 04.12.2019. In fact, long term capital gain has to be declared by adopting sale value of determined with actual valuation of the property which was not available at the time of original assessment and as such, when new information received by the department, re-opening cannot be said to be based upon any change of opinion or as a after thought step. According to stand of the respondent, re-opening of the case on the basis of factual error pointed out by the audit party is always permissible under the law by virtue of decision in the case of CIT v. P.V.S. Beedies Pvt. Ltd., reported in [1999] 237 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llector of Stamps, Stamp duty valuation Department, Surat that the value of agriculture land block No. 44 (9870 sq.mtr) and block no. 46 (16291 sq.mtr) at Kosmada village, Kamrej Taluka under Surat District stands at Rs. 78,96,000/- (Stampduty Rs. 3,86,904 @ 4.9%) respectively totaling to Rs. 2,09,28,800/- as against the consideration of Rs. 1,49,37,932/- shown by the assessee on sale of above land. Thus, the assessee has shown sale consideration of Rs. 1,49,37,932/- which was less than the value of Rs. 2,09,28,200/- adopted/assessed/assessable by stamp valuation authority of a State Government for the purpose of payment of stamp duty in respect of such transfer attracting provisions of section 50C of the Act. Accordingly, the value of Rs. 2,09,28,800/- was required to be taken as deemed value of the consideration received or accruing as a result of such transfer for the purposes of section 48 of the Act. Thus, the assesseee has failed to disclose fully and truly all material facts for the A.Y 2011- 12. Failure to do so resulted in under assessment of short term capital gain of Rs. 50,95,868/-. Hence, I have reason to believe that the income of the assessee has escaped assessment t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r can not be seen to have formed any opinion on such a claim. Such a contention, in our opinion, would be devoid of merits. If a claim made by the assessee in the return is not rejected, it stands allowed. If such a claim is scrutinized by the Assessing Officer during assessment, it means he was convinced about the validity of the claim. His formation of opinion is thus complete. Merely because he chooses not to assign his reasons in the assessment order would not alter this position. It may be a non-reasoned order but not of acceptance of a claim without formation of opinion. Any other view would give arbitrary powers to the Assessing Officer. 13. In the final order of assessment that the Assessing Officer passed once again he had made no addition without citing any reasons. It can be seen that during the original assessment proceedings, Assessing Officer was acutely conscious of the fact that the petitioner had sold certain agriculture land situated in the village Kosmada at the sale consideration shown in the registered document was less than the valuation adopted by the Stamp Valuation Authority for registering the sale deed and that the possibility of application of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Commissioner of Income-Tax v. Kelvinator of India Ltd.: 320 ITR 561 (SC) had held as under:- "6. On going through the changes, quoted above, made to section 147 of the Act, we find that, prior to the Direct Tax Laws (Amendment) Act, 1987, reopening could be done under the above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act (with effect from 1st April, 1989), they are given a go- by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post-1st April, 1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words " reason to believe" failing which, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to reopen assessments on the basis of " mere change of opinion", which cannot be per se reason to reopen. We must also keep in mind the conceptual difference between power to review and power to reassess. The Assessing Officer has no power to review ; he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in Kelvinator of India (supra) and earlier decisions of this Court and held as under:- "18. In view of the dictum of the Supreme Court in the case of Kelvinator of India Ltd. (supra), the Full Bench of this court in Kelvinator of India Ltd. (supra) and Usha International (supra), the present case would fall in the category of "change of opinion" as the "reasons to believe" proceed on the premise that the opinion formed in the original assessment orders was wrong or erroneous. A wrong or erroneous opinion is not a good ground for reopening. This would be contrary to the jurisdictional requirements and the mandatory pre-conditions which should be satisfied. The said aspect has been highlighted in the aforesaid ratio by the Supreme Court and this court. Erroneous decisions can be corrected by resort to exercise of power under section 263 of the Act, which is the appropriate remedy. The said power can be exercised if the order passed by the Assessing Officer was erroneous and prejudicial to the interests of the Revenue. The error and mistake made by the Assessing Officer/Revenue in the present case is that it did not resort to and exercise the power under section 263 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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