TaxTMI 
TaxTMI 
2015 (4) TMI 866
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....sequently, after issuing notice under Section 143(2) of the Act, the assessment was completed 143(3) by the Assistant Commissioner of Income Tax, Circle-15(1), New Delhi. Subsequently, the Assessing Officer issued notice under Section 148 dated 30th March, 2010 proposing to reassess the short term capital gains of Rs. 3,06,37,449/- as business income. During the course of reassessment proceedings, the assessee company contended that the notice under Section 148 of the Act was not valid, inasmuch as, the very same issue was considered by the Assessing Officer at the time of framing the original assessment. Brushing aside the contention of the assessee, the Assessing Officer finally passed the reassessment order on 13.10.2010 treating the income from short term capital gains as business income. 3. Aggrieved by the above order, the assessee company filed an appeal before the learned CIT(A) who vide order dated 15.02.2011, upheld the reassessment proceedings, however, had concluded that the returned capital gains should not be treated as business income but as a short term capital gains only. Since the assessee company is aggrieved by that part of the order pertaining to the reopeni....
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.... order of learned CIT(A) on the issue of reopening and drew our attention to para 5.2 of the said CIT(A)'s order. 6. We have heard the rival parties and have perused the material available on record. In the present case, we are required to adjudicate upon whether the reassessments proceedings are properly launched by the Assessing Officer or vitiated by mere change of the opinion. We find from the material available on record that the very same issue was considered by the Assessing Officer at the time of original assessment. The Assessing Officer had raised a specific query, as to why the short term capital gains should not be treated as business income. After consideration of reply filed by the assessee, the Assessing Officer accepted the claim. Further, it is trite law that in order to determine whether there are reasons to believe that the income got escaped the assessment, one has to look at the reasons recorded by the Assessing Officer before the issuance of notice under Section 148 of the Act. In this case, the reasons recorded by the Assessing Officer are as follows: "The assessment of M/s Responsible Builders (P) Ltd. for the A.Y. 2006- 07 was completed after scrutiny....
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....soning that the Assessing Officer had not assigned any reason for accepting the capital gains made out of sale of shares as short term capital gains. This, in our view, cannot be a valid reason. If a claim made by the assesee 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 completed. Further, framing of the assessment order is not in the control of the assessee, therefore, for any omissions or commissions in the assessment order cannot be attributable to the assesee. In this connection, we rely on the decision of Hon'ble Gujarat High Court in the case of Gujarat Power Corporation Ltd. Vs. ACIT, 350 ITR 266. The Hon'ble High Court held vide page no. 294 as follows: "The powers under section 147 of the Act are special powers and peculiar in nature where a quasi-judicial order previously passed after full hearing and which has otherwise become final is subject to reopening on certain grounds. Ordinarily, a judicial or quasi-judicial order is subject to appeal, revision or even review if statute so permits but not li....
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....uch a course of action that he adopts, it can hardly be stated that he did not form an opinion on such a claim. It is not unknown that assessments of larger corporations in the modem day, involve large number of complex claims, voluminous material, numerous exemptions and deductions. If the Assessing Officer is burdened with the responsibility of giving reasons for several claims so made and accepted by him, it would even otherwise cast an unreasonable expectation which within the short frame of time available under law would be too much to expect him to carry. Irrespective of this, in a given case, if the Assessing Officer on his own for the reasons best known to him, chooses 'not to assign reasons for not rejecting the claim of an assessee after thorough scrutiny, it can hardly be stated by the Revenue that the Assessing Officer cannot be seen to have formed any opinion on such a claim. Such a contention, in our opinion, would be devoid of merits. 1ft 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 o....