TaxTMI 
TaxTMI 
2022 (2) TMI 882
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....53,880/- under the share purchase agreement. 3. A search action under section 132 of the Income Tax Act, 1961 (the Act) was conducted in the premises of Petitioner and his family on 18th June, 2013. Petitioner filed his return of income for A.Y. 2013-2014 on 27th September, 2013 declaring a total income of Rs. 1,21,85,94,510/- including long term capital gains of Rs. 1,11,40,59,040/- arising out of transfer of his share holding in Ruby Macons Limited. The total tax payable therein of Rs. 26,16,22,522/- was also duly paid. The return of income was processed under section 143(1) of the Act, accepting the returned income. 4. Thereafter, pursuant to the search mentioned earlier, a notice dated 7th September, 2015 under section 153A of the Act was issued to Petitioner requiring him to file return of income for A.Y. 2013- 2014 being one out of the six assessment years in respect of which he was assessable under the Act. In compliance with the notice, Petitioner, on 13th October, 2015, furnished his return of income declaring the same total income of Rs. 1,21,85,94,510/-. 5. Later the case was selected for scrutiny and a notice under section 143(2) of the Act dated 2nd November, ....
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....ich was in existence much before passing of the assessment order. Jurisdictional Assessing Officer, who proposes to reopen, as held by the Apex Court in Gemini Leather Stores vs. Income Tax Officer, B Ward, Agra and Others ITR 1975 Vol.100 (SC), could not take recourse to section 147 to remedy the error resulting from his own oversight. 8. Mr. Sharma justified the reopening and reiterated basically what has been stated in the order rejecting the objections. 9. To confer jurisdiction under section 147 of the Act, two conditions are required to be satisfied. First the Assessing Officer must have reason to believe that income, profits or gains chargeable to income tax had escaped assessment and secondly, he himself also has reason to believe that such escapement occurred by reasons of either omission or failure on the part of assessee to disclose fully or truly all material facts necessary for his assessment of that year. When more than four years have expired from the end of relevant assessment year and there has been an assessment completed under section 143(3) of the Act, both these conditions have to be satisfied before the Assessing Officer could assume jurisdiction to issu....
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....47 and 148 of the Act. The Court held "However, if from the reasons, no case of failure to disclose is made out, then certainly the assumption of jurisdiction under Sections 147 and 148 of the Act would be ultra vires, being in excess of the jurisdictional restraints imposed by the first proviso to Section 147 of the Act". 12. One thing is very clear from the reasons recorded that there is nothing to indicate that there was non disclosure by the assessee of any material facts. Since the reasons do not indicate the failure on the part of assessee to disclose fully and truly all material facts, on this ground alone, the impugned notice dated 23rd March, 2021 has to be quashed and set aside. 13. Moreover, the Assessing Officer has issued notice before passing assessment order to which Petitioner has responded providing all documents including the share purchase agreement and the Assessing Officer has passed the assessment order accepting the returned income. Therefore, this issue has also been discussed and considered by the Assessing Officer before passing assessment order. To reopen an assessment based on the same material to take a different view, is not permissible as held t....
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....er facts inferred from them, the authority has to draw the proper legal inferences, and ascertain on a correct interpretation of the taxing enactment, the proper tax leviable. Thus, when a question arises whether certain income received by an assessee is capital receipt, or revenue receipt, the assessing authority has to find out what primary facts have been proved, what other facts can be inferred from them, and taking all these together, to decide what the legal inference should be. There can be no doubt that the duty of disclosing all the primary facts relevant to the decision of the question before the assessing authority lies on the assessee. To meet a possible contention that when some account books or other evidence has been produced, there is no duty on the assessee to disclose further facts, which on due diligence, the Income-tax Officer might have discovered, the Legislature has put in the Explanation, which has been set out above., In view of the Explanation, it will not be open to the assessee to say, for example-" I have produced the account books and the documents: You, the assessing officer examine them, and find out the facts necessary for your purpose: My ....
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....ely disclosed on the ground that with due diligence the Income-tax Officer could have discovered them from the facts actually disclosed. The Explanation has not the effect of enlarging the section, by casting a duty on the assessee to disclose " inferences "-to draw the proper inferences being the duty imposed on the Income-fax Officer. We have therefore come to the Conclusion that while the duty of the assessee is to disclose fully and truly all primary relevant facts, it does not extend beyond this. The position, therefore, is that if there were in fact some reasonable grounds for thinking that there had been any nondisclosure as regards any primary fact, which could have a material bearing on the question of "under assessments that would be sufficient to give jurisdiction to the Income-tax Officer to issue the notice under Section 34. Whether these grounds were adequate or not for arriving at the conclusion that there was a non disclosure of material facts would not be open for the court's investigation. In other words, all that is necessary to give this special jurisdiction is that the Income- tax officer had when he assumed jurisdiction some prima ....