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TMI Blog2024 (3) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... e alternative remedy available to the assessee would not affect right of the assessee to obtain relief under Article 226 of the Constitution of India as the condition precedent to exercise jurisdiction under Section 147 of the Act did not exist and therefore the AO has no jurisdiction to issue the impugned notice under Section 148 for the Assessment Year 2016-17. Thus there would be lack of jurisdiction to reopen the assessment on mere change of opinion. Therefore, the petition requires to be allowed by quashing and setting aside the impugned notice u/s 148 and the order rejecting the objection of the petitioner and all other sub-consequential action taken pursuant to the impugned notice by the respondents. Petition succeeds. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MR. JUSTICE NIRAL R. MEHTA Appearance: For the Petitioner(s) No. 1 : Mr Manish J Shah(1320) For the Respondent(s) No. 1,2 : Mrs Kalpana K Raval(1046) ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Rule. Learned Senior Standing Counsel Mr. Nikunt Raval waives service of notice of rule on behalf of respondents. 2. Heard learned advocate Mr. Manish J.Shah for the petitioner and learned S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner complied with such notices by furnishing the information called for. 4.4. The Assessing Officer had also issued show-cause notice dated 13.11.2017 during the course of assessment proceedings for the Assessment Year 2015-16 proposing withdrawal of the claim made by the petitioner under Section 54F of the Act, alleging that the condition to avail the exemption under Section 54F of the Act was not fulfilled by the petitioner as the Assessing Officer was of the opinion that the petitioner had purchased open plots instead of residential houses as prescribed under Section 54F of the Act. 4.5. However, the petitioner justified his claim under section 54F of the Act by letter dated 30.11.2017 by furnishing a copy of Municipal Tax Bills, Electricity Bills and property card of the seller which showed that the plots with house purchased by the petitioner were duly reflected as residential property in the revenue/ municipal records. The Assessing Officer, accepting such explanation passed the Assessment Order under Section 143(3) of the Act on 26.12.2017 for Assessment Year 2015-16. The Assessing Officer however made addition of Rs. 30,56,000/- to the return income by invoking provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per the provisions of Section 54F of the Act and there is no escapement of income for Assessment Year 2016-17. 4.12. The respondent no. 2 however by order dated 19.07.2021 rejected the objections raised by the petitioner reiterating that reopening of the assessment is proper and due opportunity would be provided to the petitioner during the course of reassessment proceedings. 4.13. Being aggrieved, the petitioner has preferred this petition. 5. Learned advocate Mr. Manish J. Shah for the petitioner submitted that reopening of the assessment is based on mere change of opinion as the Assessing Officer has allowed the claim of deduction under Section 54F in the Assessment Year 2013-14 and Assessment Year 2015-16. Learned advocate Mr. Shah invited the attention of this Court to the relevant part of income tax return showing claim of deduction under Section 54F made by the petitioner of Rs. 3,75,95,296/- in the Assessment Year 2013-14. He also referred to the details submitted by the petitioner with regard to such claim to the Assessing Officer during the scrutiny assessment of the year 2013-14. It was also pointed out that by the notices under Section 142(1) dated 22.02.2016 and 07.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely on the change of opinion on the basis of the material available on record in absence of any new tangible material for formation of belief as to escapement of income. 5.5. It was submitted that thought the reopening is within a period of four years from the end of the assessment year, the same is not permissible in absence of new tangible material, more particularly when Section 54F of the Act, no where prescribes that the area of residential house which is required to be acquired or purchased or constructed to become eligible for claiming deduction under Section 54F of the Act and therefore the reasons recorded by the respondent no. 2 for reopening is erroneous and the impugned notice is liable to be quashed and set aside. 5.6. Learned advocate Mr. Shah in support of his submissions, placed reliance upon the decision of the Hon ble Supreme Court in case of Calcutta Discount Company Ltd. Vs. Income Tax Officer reported in 41 ITR 191 wherein it is held that the High Courts have power to issue a writ in the fit case, prohibiting an executive authority from acting without jurisdiction, an existence of alternative remedy as appeals and reference to the High Court would not be a suff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned advocates for the respective parties and on perusal of the documents placed on record, it is apparent that the impugned notice under Section 148 is issued by the Assessing Officer on mere change of opinion because during the regular assessment proceedings for Assessment Year 2013-14, when the petitioner claimed the exemption under Section 54F of the Act on sale of the shares of Paras Inn Pvt. Ltd. by depositing the amount in capital gain deposit scheme, the same was scrutinized and no addition was made and such allowance was accepted. During the regular assessment proceedings for the Assessment Year 2015-16, purchase two plots with residential house by the petitioner was also thoroughly scrutinized and no addition was made by the Assessing Officer disallowing the deduction under Section 54F of the Act. Therefore, when the petitioner claimed the exemption under Section 54F of the Act and has utilized amount deposited in capital gain deposit scheme by purchasing the property within the period of two years, no addition was made. The Assessing Officer on the same material by recording the reasons that the petitioner is not entitled to deduction under Section 54F as per Sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h transfer. (2) Where the assessee purchases, within the period of [two years] after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head Income from house property , other than the new asset, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a), or, as the case may be, clause (b), of subsection (1), shall be deemed to be income chargeable under the head Capital gains relating to long-term capital assets of the previous year in which such residential house is purchased or constructed. (3) Where the new asset is transferred within a period of three years from the date of its purchase or, as the case may be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a) or, as the case may be, clause (b), of sub-section (1) shall be deemed to be income chargeable under the head Capital gains relating to long- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f regular assessment for Assessment Year 2015-16 is in accordance with the above provisions. The Assessing Officer therefore cannot now again re-appreciate the same facts which was considered during the course of Assessment Year 2015-16 to disallow the exemption under Section 54F of the Act to assume the jurisdiction to reopen Assessment Year 2016- 17 on the ground that three years from the date of deposit in the capital gain deposit scheme would be over on 30.01.2016 which would fall in previous year relevant to the Assessment Year 2016-17. 12. The Hon ble Apex Court in case of Calcutta Discount Company Ltd.(Supra) has held that the alternative remedy available to the assessee would not affect right of the assessee to obtain relief under Article 226 of the Constitution of India as the condition precedent to exercise jurisdiction under Section 147 of the Act did not exist and therefore the Assessing Officer has no jurisdiction to issue the impugned notice under Section 148 for the Assessment Year 2016-17. 13. The Hon ble Apex Court in case of Commissioner of Income Tax Vs. Kelvinator of India Ltd. reported in (2010) 320 ITR 561 (SC) has held as under: 6. On going through the change ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duce the expression `reason to believe' in Section 147.--A number of representations were received against the omission of the words `reason to believe' from Section 147 and their substitution by the `opinion' of the Assessing Officer. It was pointed out that the meaning of the expression, `reason to believe' had been explained in a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression `has reason to believe' in place of the words `for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new section 147, however, remain the same. For the afore-stated reasons, we see no merit in these civil appeals filed by the Department, hence, dismissed with no order as to costs. 14. In view of above facts emerging from the record as well as the aforesaid settled legal position, there would be lack of jurisdiction to reopen the assessment on mere change of opinion. Therefore, the petition requir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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