TaxTMI 
TaxTMI 
2019 (8) TMI 410
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....come Tax (ACIT) under Section 148 of the Act seeking to reopen the assessment for AY 2008-09 and the consequential order dated 24th September, 2015 disposing of its objections and W.P. (C) No. 10897/2015 which challenges an identical notice and the order disposing of its objections for the AY 2009-10. 3. Mr. Nitin Sabharwal, the brother of Mr. Chetan Sabharwal, has filed the other two writ petitions. While W.P.(C) 11220/2015 challenges notice dated 31st March, 2015 issued under Section 148 of the Act and the order dated 24th September, 2015 passed by the Respondent ACIT disposing of the objections for AY 2008-09, W.P.(C) No. 11215/2015 seeks similar relief qua the notice and order of the same dates for AY 2009-10. 4. There is one distinguishing feature in the two sets of petitions. While the assessments in the case of Mr. Chetan Sabharwal for the two AYs in question in the first instance by the Assessing Officer (AO) were scrutiny assessments under Section 143 (3) of the Act, as far as Mr. Nitin Sabharwal is concerned, there was no scrutiny assessment for the two AYs. Intimations accepting his returns were sent to him under Section 143 (1) of the Act. Background facts 5. The ba....
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....he sale of shares of Pawan Impex are that a No Objection Certificate/consent letter was issued by the NOIDA Authority in terms of Article 4 clause 4.2 (a) of the SPA on 22nd May, 2008 approving the change in constitution of Pawan Impex. At the Annual General Meeting (AGM) of Pawan Impex conducted on 29th September 2008, the new Directors were appointed and the previous Directors, viz., the two Petitioners and Mr. Kabul Chawla and Smt. Anjali Chawla ceased to be Directors. This took effect from 23rd June, 2008 as was noted in the Form 20-B dated 30th September, 2008 filed with the Registrar of Companies (ROC). On 17 and 19th November, 2008 the shares of Pawan Impex dematerialised upon a request by GYS and transferred to Religare Securities limited, depository under NSDL, and an associate company of the Religare group. Each of the Petitioners deposited Rs. 28 crores and Rs. 3,91,50,000/- on 25th and 26th September, 2009 in the capital gain savings bank account in accordance with Section 54F (iv) of the Act. 10. Under a separate SPA the equity shares of M/s.SVIIT Software Pvt. Ltd. (SVIIT Software) held by the two Petitioners and two others - Mr. Kabul Chawla and Mrs. Anjali Chawla -....
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....of the Act. 14. On 25th September 2008, Mr. Chetan Sabharwal filed his return of income for A.Y.2008-09 declaring a total loss of Rs. 90,37,369/-. In the return e-filed in Form ITR-4 the particulars of the tax audit report obtained was filed and in part A-BS at column 3(d)1(A), a sum of Rs. 37,64,40,000/- was shown under the head 'sundry creditors' which included a sum of Rs. 37,62,50,000/- being a liability in the name of GYS. 15. Return of Mr. Chetan Sabharal was picked up for scrutiny and a notice under Section 143 (2) dated 9th August, 2009 was issued by the ACIT, Circle25, New Delhi. On 6th August, 2010 a questionnaire was issued by the Assessing Officer (AO) to Mr. Chetan Sabharwal under Section 142 (1) of the Act where 56 queries were raised, inter alia, requiring him to explain the nature of the transaction with GYS and requiring him to file a Memorandum of Association (MOA) and ROC returns for the last five years of the said GYS. On 5th October, 2010 Mr. Chetan Sabharwal replied to these queries. 16. Following this on 30th December, 2010, the AO issued summons under Section 131 of the Act to Pawan Impex, GYS and SVIIT Software. These parties filed their respective repli....
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.... advance received from GYS. According to Mr. Nitin Sabharwal since in terms of Article IV of the SPAs, the share purchase culminated only in FY 2008-09 relevant to AY 2009-10, he reflected the capital gain on sale of the equity share in his return in the subsequent AY 2009-10. As far as his return for AY 2008-09 was concerned, intimation under Section 143(1) of the Act was issued by the AO on 26th October, 2009. 20. For AY 2009-10, Mr. Nitin Sabharwal filed his return of income on 30th September, 2009 declaring a total income of Rs. 89,67,577/. In this return he disclosed his LTCG of Rs. 3,87,14,131/- after claiming the set off in the sum of Rs. 31,04,70,241/-. In this case too, intimation under Section 143(1) was issued by the AO. Notices under Section 147/148 of the Act 21. On 31st March, 2015 notice under Section 148 of the Act was issued by the AO to each of the Petitioners separately for the two AY's stating that he had reason to believe that income chargeable to tax for the two AY's had escaped assessment within the meaning of Section 147 of the Act, therefore he proposed to assess/reassess the income. It must be noticed here that this notice was issued after four years af....
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.....00 crores was determined. The total long term capital gain derived by Mr. Chetan Sabharwal was worked out to Rs. 40,38,40,170/- out of which a sum of Rs. 31,91,50,000/- was deposited in the Capital Gains Saving Bank A/c before 30th September 2009 and the deduction u/s 54F of the Income Tax Act, 1961 was claimed. Similarly, Mr. Nitin Sabharwal has shown capital gains of Rs. 40,40,84,770/- out of which Rs. 35,80,97,629/~ was deposited in the Capital Gains Saving Bank A/c before 30th September 2009 and the deduction u/s 54 F of the Income Tax Act, 1961 was claimed. Mr. Chetan Sabharwal and Mr. Nitin Sabharwal have also purchased 1/4th share each in the Property No. 7, Sikandara Road, New Delhi vide sale deed dated 21.04.2010 for Rs. 9,33,69,928/- each. Mr. Nitin Sabharwal and Mr. Chetan Sabharwal along with the other shareholders (Mr. Kabul Chawla and Smt Anjali Chawla) of Pawan Impex Pvt Ltd have entered into share purchase agreement dated 19th day of October, 2007 with GYS Real Estate Pvt. Ltd which determined the sale of 30,00,000 fully paid up equity shares of Pawan Impex Pvt Ltd for a total consideration of Rs. 1,95,00,000/- to GYS Real Estate Pvt. Ltd. Further, vide share p....
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....it petitions filed by Mr. Chetan Sabharwal: "Returns for the Assessment Years ('AY') 2008-2009 and 2009-2010 were subject-matter of orders under Section 143(3) of the Income Tax Act, 1961. First question which arises is whether it is a case of examination and change in opinion. Learned counsel for the petitioner submits that the reopening is after four years and therefore, the question of failure on part of the assessee has to be examined. Learned counsel for the respondent states that in this case, report was received from the Investigation Wing, Lucknow and, therefore, there was fresh evidence and material, which became the basis for reopening of the assessment. For the AY 2008-2009, income from capital gains from sales of shares was not declared. Income from capital gains arose in the said year and not in the assessment year 2009-2010. We have merely recorded the submissions made and not commented on merits. Learned counsel would be ready for arguments on the issues raised. Learned counsel for the respondent would produce original records on the next date of hearing. Relist on 11.4.2018." 27. At a subsequent hearing on 11th April, 2018, the Court was informed that w....
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....nce was also placed on the decisions in Wel Intertrade (P) Ltd. v. ITO [2009] 308 ITR 22 (Del), CIT v. Indian Farmers Fertilizer Cooperative Ltd. [2008] 171 Taxman 379 (Del), Haryana Acrylic Manufacturing Company v. CIT [2009] 308 ITR 38 (Del) and Atma Ram Properties (P) Ltd. v. DCIT [2012] 343 ITR 141 (Del). 32. Mr. Vohra further submitted that re-assessment was initiated on the basis of mere change of opinion and this was impermissible in law. Reliance is placed on the decisions in Maruti Suzuki India Ltd. v. DCIT [2013] 356 ITR 209, Mohan Gupta (HUF) v.CIT [2014] 366 ITR 115, Tractebel Industry Engg. v. Asst. Director of Income Tax [2011] 198 Taxman 408 (Del) and CIT v. Atul Kumar Swami [2014] 362 ITR 693(Del). 33. Adverting to the merits of the cases, Mr. Vohra submitted that since the sale of shares is completed only during the Financial Year 2008-09 in terms of the SPAs relevant to AY 2009-10. LTCG could be declared only in the return for AY 2009-10. Accordingly, he submitted that there was no question of any failure by Mr. Chetan Sabharwal to disclose any material facts. He questioned the rationale of the AO forming an opinion that income had escaped assessment, when in fa....
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....nd that insofar as the earlier assessments in the case of Mr. Nitin Sabharwal was not under Section 143(3) of the Act but the return was accepted under section 143(1) of the Act, there was no question of a notice under Section 147/148 of the Act constituting a 'change of opinion'. Further, in his cases the mere fact that there was investigation report which was made available to the Revenue subsequent to the completion of the assessments was in itself sufficient for formation of an opinion that income had escaped assessment. 37. As far as both cases were concerned, Mr. Hossain maintained that at the present stage the Court only had to be satisfied prima-facie that there was sufficient material for reopening of the assessment. Referring to the assessment orders passed by the AO under Section 143 (3) of the Act in the cases of Mr. Chetan Sabharwal, Mr. Hossain pointed out that there is absolutely no discussion in the orders themselves on the aspects now highlighted in the reasons for reopening of the assessments. He placed reliance on the decision in Income Tax Officer Ward No. 16(2) v. Tecspan India Pvt. Ltd. (2016) 6 SCC 685. 38. As far as the scope of the present proceedings are....
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....41. As far as the case of Mr. Chetan Sabharwal is concerned, the original assessment orders for both AYs under Section 143(3) of the Act do not give any indication on the AO having formed any opinion whatsoever on the basis of which the reopening has been ordered. In this context the following observations in Income Tax Officer Ward No. 16 (2) v. Techspan India Pvt. Ltd. are relevant. "18. Before interfering with the proposed reopening of the assessment on the ground that the same is based only on a change in opinion, the court ought to verify whether the assessment earlier made has either expressly or by necessary implication expressed an opinion on a matter which is the basis of the alleged escapement of income that was taxable. If the assessment order is non-speaking, cryptic or perfunctory in nature, it may be difficult to attribute to the assessing officer any opinion on the questions that are raised in the proposed reassessment proceedings. Every attempt to bring to tax, income that has escaped assessment, cannot be absorbed by judicial intervention on an assumed change of opinion even in cases where the order of assessment does not address, itself to a given aspect sought ....