2019 (1) TMI 955

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....ow compass and with the consent of the learned advocates for the respective parties, the matter was taken up for final hearing today. 3. By this petition under article 226 of the Constitution of India, the petitioner has challenged the validity of the notice dated 31.03.2018, issued by the respondent under section 148 of the Income Tax Act, 1961 (hereinafter referred to as, 'the Act'), whereby, the respondent proposes to reassess the total income of the petitioner for assessment year 2011-12. 4. The petitioner is an individual engaged in the business of construction activities as proprietor of Safal Infrastructure. The petitioner filed his return of income for assessment year 2011- 12 on 07.09.2011 declaring total income of Rs....

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....oner, submitted that in this case, the assessment for assessment year 2011-12 is sought to be reopened by the impugned notice dated 31.03.2018, which is clearly beyond a period of four years from the end of relevant assessment year, and hence, in the absence of any failure on the part of the petitioner to disclose fully and truly the material facts necessary for his assessment, the assumption on the part of the Assessing Officer is without any authority of law. The attention of the court was invited to the reasons recorded for reopening the reassessment to point out that the Assessing Officer has recorded that the petitioner has sold the immovable property on 10.12.2010 for consideration of Rs. 6,07,000/- during the financial year 2010-11. ....

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....ts of the case. It was further pointed out that the Assessing Officer has recorded that there was no scrutiny assessment under section 143(3) of the Act for the year under consideration, which again reflects lack of proper application of mind on the part of the Assessing Officer and that in absence of any income having escaped assessment, the Assessing Officer was not justified in issuing the impugned notice and assuming the jurisdiction under section 147 of the Act. 6. On the other hand, Mrs. Mauna M. Bhatt, learned Senior Standing Counsel for the respondent, reiterated the contentions raised in the affidavit-in-reply. It was submitted that insofar as the incorrect recording of the fact that in this case there was no scrutiny assessment....

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....ent of Rs. 6,07,000/- for income tax. 3. Analysis of information collected/received: The assessee has not shown capital gain in the return of income for the above mentioned property. 4. Enquiries made by the AO as sequel to information collected/received: In this matter a letter for verification of sale of immovable property was issued to the assessee on 21.03.2018 and the assessee filed his reply in tapal on 26.03.2018. The assessee has not furnished any details in this regard. 5. Findings of AO: From the above facts available, it appears that capital gain of sale of immovable property of Rs. 6,07,000/- has escaped. 6. Basis of forming reason to believe and details of escapemen....

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....g Officer seeks to reopen the assessment on the ground that the petitioner had sold the immovable property for a consideration of Rs. 6,07,000/- during financial year 2010-11 but had not shown the capital gain arising out of such transaction in the return of income and therefore, income chargeable to tax has escaped assessment. In this regard, a perusal of the return of income filed by the petitioner shows that he has duly shown the long term capital gain arising out of the sale of property in question and has also given a detailed computation of income in the statement of Long Term Capital Gain. Therefore, the Assessing Officer appears to have proceeded on a factually incorrect premise to the effect that the petitioner had not offered the ....

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....e Assessing Officer could not have formed the belief that income chargeable to tax has escaped assessment in the case of the petitioner. Therefore, the prerequisite condition for reopening the assessment is not satisfied in the present case. 11. Moreover, in this case, the assessment is sought to be reopened beyond a period of four years from the end of relevant assessment year. Therefore, unless there is any failure on the part of the petitioner to disclose fully and truly all material facts necessary for his assessment for the year under consideration, the assumption of jurisdiction under section 147 of the Act on the part of the Assessing Officer is without any authority of law. The facts as emerging from the record as discussed herei....