TaxTMI 
TaxTMI 
TaxTMI 
2022 (1) TMI 874
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....identical, hence all the appeals were heard together and are being disposed off by this consolidated order for the sake of convenience. 3. First we shall be taking the appeal of the assessee relating to assessment year 2010-11 since the facts admittedly are identical in the appeal of the assessee for assessment year 2011-12 also, our decision rendered therein will apply mutatis mutandis to the said appeal also. 4. The Ld.Counsel for the assessee at the outset stated that he would first argue on the legal grounds raised vis-à-vis validity of the assessment framed u/s 147 of the Act raised in ground No.2(a), 2(b) & 2(c) as under: "2(a) That the Ld. CIT (Appeals) has erred in law and on facts in not quashing order u/s 143(3) r.w.s. 147 of Income Tax as all the facts relating to "External Development Charges" and "EDC" under Papra Act amounting to Rs. 127,70,37,351/- and Rs. 36,89,350/- respectively, were fully and truly disclosed and discussed at the time of Scrutiny Assessment u/s 143(3} of Income Tax. 2(b) That the CIT(A) has failed to appreciate that the Assessing Officer had duly applied his mind on these issues at the time of framing original assessment and, as such....
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....ities and services to be provided in the urban areas, urban estates, promotion of urban development as well as construction of houses ; (iii) promote research, development of new techniques of planning, land development and house construction and manufacture of building material; (iv) promote companies, association and other bodies for carrying out the purposes of the Act; and (v) perform any other function which are supplemental, incidental or consequential to any of the functions referred to in this subsection or which may be prescribed. 6. Thereafter he drew our attention to para 6.1 of CIT(A)'s order and pointed out therefrom that the case of the assessee for the impugned year was reopened recording reasons leading to belief of escapement of income by the AO as reproduced therein and thereafter the assessment was framed making various additions to the income of the assessee. He pointed out that reopening was resorted to on account of the belief of the AO that External Development Charges (EDC) received by the assessee were in the nature of its income while the assessee had reflected the same merely as a liability in its Balance Sheet. The AO, the Ld.Counsel for the a....
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....osed of." 7. The Ld.Counsel for the assessee further pointed out that a review petition filed by the Revenue in the order passed by the Hon'ble Supreme Court was also dismissed vide order dated 2407-2019 in RPC No.1026/2019, finding no error in the judgement. He also pointed out that identical issue had arisen in the case of the assessee in assessment years 2008-09 and 2009-10, wherein reopening u/s 147 of the Act was resorted to by the AO for identical reasons of escapement of income being EDC charges and wherein the ITAT had allowed the appeal of the assessee holding the assessment framed u/s 147 of the act to be not in accordance with law and invalid. Having stated so the Ld.Counsel for the assessee contended that considering the direction of the Hon'ble Supreme Court that the appellate authority adjudicate the issue of reopening uninfluenced by the order of the Hon'ble High Court in Writ Petition, the issue stood covered by the order of the ITAT in the preceding years. Copies of all the orders were placed before us during the course of hearing. 8. Besides stating so, Ld.Counsel for the assessee also pointed out that the facts for the impugned year demonstrated that t....
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....nizers /Real Estate Builders/Promoters during the F. Y. 2008-09. The said External Development Charges were not brought to the ambit of tax by the assessee but were instead shown as a liability in its Balance Sheet under the head "Other Liabilities". It is pertinent to mention here that External Development Charges are received from the Land Developers/Colonizers/Real Estate Builders/Promoters who seek approval from the assessee (i.e. Greater Mohali Area Development Authority) or other Competent Authority to develop a Residential or Commercial or Institutional Zone on their piece/ chunk of land. The said amount received under the nomenclature "External Development Charges" is supposed be used by the assessee for carrying on of External Development Works and other related jobs outside the land of the Land Developer/Colonizer/Real Estate Builder/Promoter who has paid the External Development Charges (EDC). Thus, it is seen that the receipt of External Development Charges by the assessee is attributable to its regular business. Further, the receipt and expenditure of the said amount is a regular, routine and re-occurring phenomenon as External Development Charges are being regularl....
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....ted to beyond four years from the relevant assessment year and law stipulates that reopening can be resorted to beyond four years only if any income chargeable to tax has escaped assessment by reason of failure of the assessee, amongst other things, to disclose fully and truly all material facts necessary for his assessment for that year. There is no dispute vis-à-vis this requirement of law. 12. Going forward from here & examining and perusing the contents of the reasons recorded we find that there is no material fact, relating to the escapement of income, which the assessee could be said to have not disclosed truly and fully. The reasons recorded escapement of income on account of EDC, not being taxed. The assessee ought to have been found by the AO to have concealed some material fact relating to the same for him to validly assume jurisdiction to reopen the case of the assessee u/s 147 of the Act, and the reasons recorded should have mentioned this act of concealment. But on the contrary we find, the reasons note that the EDC charges were shown by the assessee as a liability in its Balance Sheet under the head "other liabilities" (1st para of the reasons). The rest of th....