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TMI Blog2024 (8) TMI 1369X X X X Extracts X X X X X X X X Extracts X X X X ..... essment cannot be continued on the basis of the original notice under Section 148, and that a fresh notice is necessary. Counsel as submitted that the interpretation placed on Section 147 in Maninder Singh Kang [ 2012 (6) TMI 616 - PUNJAB AND HARYANA HIGH COURT] and Govindaraju [ 2015 (8) TMI 271 - KARNATAKA HIGH COURT] should be adopted. In view of the binding decision of the Division Bench of this Court in TAFE , the course of action canvassed by learned senior standing counsel is not open and his contention cannot be countenanced. Keeping the above legal position in mind, it becomes necessary to examine the assessment order to determine the basis of such order. In paragraph 15 of the assessment order, the assessing officer recorded findings with regard to the transaction that triggered reassessment proceedings. The reason cited for reopening the assessment for assessment year 2013- 14 was the deletion under the head 'land' without offering capital gains for assessment. As discussed earlier, the assessment order clearly discloses that no additions were being made on this account since there was no capital gain. The conclusion that follows from the above discussion is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n GKN Driveshafts Ltd. v. Income-tax Officer(GKN Driveshafts), 259 ITR 19(SC) , and, by order dated 16.04.2021, this Court directed that a speaking order be issued setting out reasons for reopening assessment. Such order was issued on 30.08.2021 and is also assailed herein. Upon a reference by the respondents, directions were issued by the 3rd respondent on 11.03.2022 under Section 144A of the Income-tax Act. The petitioner approached this Court soon thereafter and an interim stay of further proceedings was granted on 30.03.2022. The assessment order dated 31.03.2022 came to be issued in these facts and circumstances with additions for an aggregate sum of Rs. Rs. 1,49,93,830/- under various heads. Significantly, no addition was made regarding the transaction that triggered the reopening of assessment. 3. Mr. Suhrith Parthasarathy, learned counsel for the petitioner, advanced multiple contentions in respect of the invalidity of the impugned notice, such as that reasons to believe that there is escaped assessment should be based on tangible material; that it cannot be based on change of opinion; and that all relevant documents that pertained to the transaction forming the basis for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order being issued in contravention of the order of this Court, learned counsel submits that the assessment order is liable to be interfered with. 5. Mr.R.S.Balaji, learned senior standing counsel, made submissions in response and to the contrary. At the outset, he submitted that the petitioner has a statutory remedy against the assessment order and that the exercise of discretionary jurisdiction is, therefore, not warranted. He also submitted that revenue interest would be gravely prejudiced if the Section 148 notice and proceedings pursuant thereto are interfered with by pointing out that the assessing officer concluded that income aggregating to Rs. 1,49,93,830/- is liable to be added as escaped assessment to the income disclosed in the return of income of the petitioner. 6. After refuting the other contentions regarding the invalidity of the notice under Section 148, he contended that the interpretation of Section 147 by the Bombay High Court in Jet Airways is incorrect and that the correct interpretation was placed on such provision in judgments of the Punjab and Haryana High Court in Manjinder Singh Kang v. CIT and the Karnataka High Court in N. Govindaraju v. Income-tax Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in matters relating to assessment/reassessment of tax in view of the existence of a scheme and machinery for adjudication of disputes in tax statutes. Since the power exercised under Article 226 flows from the Constitution and is plenary but discretionary, it goes without saying that, except self-imposed restraints, even the existence of an alternative remedy does not act as an embargo on the exercise of jurisdiction although it is a material factor to be taken into account while deciding whether to exercise jurisdiction. In this case, the petitioner approached this Court upon notice being issued under Section 148 of the Income Tax Act. Such notice was challenged on multiple grounds and this Court granted an interim stay at the time of admission. In spite of the order of stay, the respondents proceeded to issue the assessment order on the following day. In the overall facts and circumstances, I conclude that this is an appropriate case to exercise jurisdiction under Article 226. 8. The next question to be examined is whether the impugned notice and proceedings consequent thereto are liable to be interfered with. Section 147 of the Income Tax Act, which is central to this determina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re Cements Ltd., [2008] 305 ITR 170 and of the Punjab and Haryana High Court in Vipan Khanna, [2002] 255 ITR 220 would, therefore, no longer hold the field. However, in so far as the second line of authority is concerned, which is reflected in the judgment of the Rajasthan High Court in Shri Ram Singh, [2008] 306 ITR 343, Explanation 3 as inserted by Parliament would not take away the basis of that decision. The view which was taken by the Rajasthan High Court was also taken in another judgment of the Punjab and Haryana High Court in CIT v. Atlas Cycle Industries, [1989] 180 ITR 319. The decision in Atlas Cycle Industries, [1989] 180 ITR 319 held that the Assessing Officer did not have jurisdiction to proceed with the reassessment, once he found that the two grounds mentioned in the notice under section 148 were incorrect or non-existent. The decisions of the Punjab and Haryana High Court in Atlas Cycle Industries, [1989] 180 ITR 319 and of the Rajasthan High Court in Shri Ram Singh, [2008] 306 ITR 343 would not be affected by the amendment brought in by the insertion of Explanation 3 to section 147. 21. Explanation 3 lifts the embargo, which was inserted by judicial interpretation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds as being in the alternative would be to rewrite the language used by Parliament. Our view has been supported by the background which led to the insertion to Explanation 3 to section 147. Parliament must be regarded as being aware of the interpretation that was placed on the words and also by the Rajasthan High Court in Shri Ram Singh, [2008] 306 ITR 343. Parliament has not taken away the basis of that decision. While it is open to Parliament, having regard to the plenitude of its legislative powers to do so, the provisions of section 147 as they stood after the amendment of April 1, 1989, continue to hold the field. 10. When the same issue came up for consideration before the Division Bench of this Court in TAFE , the Division Bench of this Court cited Jet Airways with approval and followed the ratio laid down therein. Paragraph 16 of the judgment of the Division Bench of this Court is as under: 16. The decision in the case of Jet Airways (cited supra) was referred to by the High Court of Delhi in the case of Ranbaxy Laboratories Limited v. CIT (2011) 336 ITR 136 (Delhi), wherein it was held that the Legislature could not be presumed to have intended to give blanket powers to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icil to the Partnership deed dated 03.09.2009 were obtained from the Registration site of the Government of Tamilnadu for the period 1-8-2007 to 31-03-2012. From the guideline values obtained, it is seen that the total value of the properties as per 50C is less than the value admitted by the assessee in the books. Hence there is no addition considering the provisions of 50C as no STCG arises. 14. Turning to the notice under Section 148, the said notice did not set out any reasons for initiating reassessment. However, the subsequent communication dated 09.05.2018 sets out the reasons. The operative portion of the communication dated 09.05.2018 is set out below: Please refer to the above. The reasons for reopening of the assessment in your case for the AY 2013-14 are hereby communicated as under: 'During the year, the assessee sold land 'Schedule 4' - 'Fixed Assets' to Balance Sheet as on 31/03/2013 shows deletion of Rs. 86,93,77,010/- under the head Land . But, no Capital Gains was offered for assessment. 15. From the above extract, it is abundantly clear that the reason cited for reopening the assessment for assessment year 2013- 14 was the deletion of Rs. 86,93 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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