TaxTMI 
TaxTMI 
2016 (1) TMI 71
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....of the case and in law the learned CIT-A erred in confirming the reopening of the case of the assessee by AO u/s 147/148 of the I.T. Act, 1961. 2. On facts, in circumstances of the case and in law the learned CIT-A erred in confirming addition by AO of Rs. 97,72,252/- to the total income as long term capital gain". 2. Brief facts qua the validity of reopening u/s 147 as challenged by the assessee vide ground no. 1 are that the assessee is a co-operative industrial society. It has filed its return of income for the assessment year 2007-08, u/s 139(1) on 15.11.2007 declaring "Nil" income. The said return of income, disclosed the working of long-term-capital-gain, wherein the assessee had shown consideration of Rs. 1 crores against....
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....ter such an exchange of letters, no adverse inference was drawn or any action was taken. Thereafter, on 28.03.2011, the assessee's case was reopened by issuance of notice u/s 148 on the following "reasons recorded", which was supplied to the assessee on 14.10.2010 :- "The reasons recorded for selection of your case are furnished here under: "The assessee is a co-operative society and has received the amount of Rs. 1 crore during FY 2006-07 on sale of FSI and the entire amount has been claimed as deduction which is not allowable deduction. The income earned by way of receipt of Rs. 1 crore on sale of FSI has escaped assessment. Under the circumstances, I have reason to believe that income has escaped assessment in ....
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....is, the assessee has also challenged the validity of reopening u/s 148 on the ground that, already enquiries were conducted by the Department and no adverse view was taken. Thus, such a reopening now amounts to "change of opinion". However, the AO rejected the assessee's contention both on legal ground as well as on merits. 4. In the first appeal, Ld. CIT(A) too rejected the assessee's legal submission on the ground that original return was not subject to scrutiny assessment u/s 143(3) therefore, no opinion was formed at all. The notice u/s 148 was issued much before 4 years from the end of assessment year therefore, AO has all the powers to reopen the case u/s 147 as had 'reason to believe' that income chargeable to tax has escaped the ....
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.... claim :- 1) In respect of contribution from members, the principle of mutuality applies and hence the relevant figures are not included in above computation. 2) In respect of amount received on sale of FSI, the relevant facts are as under: The structure of the building of the society needed urgent repairs, Society had no funds to carry out major structural repairs. Hence society sought permission from Dy. Registrar of Cooperative Socities to raised funds for carrying out these major repairs by sale of part of land/FSI. The Dy. Registrar Cooperative Societies granted permission to sale portion of land subject to the condition that "funds raised from sale of land have to be utilized only for the purpose of carrying....
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....etails vide letter dated 18th July,2008 and 4th August, 2008 giving the entire details of permission sought from Dy. Registrar Co-op Society authorizing the sale of FSI, and also gave the copy of direction of the Dy Registrar to utilize the fund for 'specific purpose'. After having received this information, the assessee's case was not selected for scrutiny and time limit for issuance of notice u/s 143(2) had expired on 30.09.2008. Again a summon was issued by the Investigation on 27.01.2010, mainly requiring the assessee to furnish copy of income-tax return furnished for the last five years and bank statement. Again in response to said summon, the assessee submitted all the requisite details. 8. Now, after all these exercise of seeking ....
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.... none. 9. Coming to argument of the Ld. DR that in this case no scrutiny assessment was made u/s 143(3) but return of income was processed u/s 143(1) and therefore, neither there is "change of opinion" nor there is any such presumption that there is application of mind on the material on record. The Statute has given sufficient power to the Assessing Officer for reopening the assessment either in the cases where return of income has been accepted u/s 143(1) or has been subjected to scrutiny assessment u/s 143(3). However, the common requirement in both the cases is that the Assessing Officer must have 'reason to believe' that income chargeable to tax has escaped assessment. The words "reason to believe" is the key element and are stronge....