TaxTMI 
TaxTMI 
2023 (2) TMI 534
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....ince 1969-70 had leasehold rights and interest in land situated at JVPD scheme,Vile Parle (West), Mumbai, ("the said plot") owned by the Friends Co-operative Housing society ("the Society") and was allotted 5 shares by the society acknowledging her rights in the land. Subhadra passed away intestate on 24th October, 1970, leaving her husband, two sons and four daughters as her only heirs. In 1985 the two sons with their own funds and resources constructed a three storey building and in 1998 added further three floors thereon. Subdhra's husband expired intestate on 24th March, 1987. The sons retained two flats viz. flat nos.10 and 11 on the 5th and 6th floor of the said building and sold the other flats on tenancy/structural ownership basis to various purchasers. In 2014, the two brothers proposed to sell off the entire property. The sons entered into a family arrangement /understanding with their sisters and on 4th October, 2014, the sisters executed release deed whereby they gave up their claim of any right over the entire property against payment of compensation. On 28th March, 2015, the sons executed an agreement of assignment cum transfer with the purchasers whereby they agreed ....
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....ecessary; (iii) that the "reason to believe" must be on "tangible material"; and (iv) the sanction from the Principal Chief Commissioner or the authority (as the case may be) under section 151 who had to be satisfied with the reasons recorded by the ITO that it is a fit case to issue such notice. 7. The reasons for reopening stated in paragraphs 10 to 15 of letter dated 28th August 2021 are as under: 10. On analysis of the issue, it is clear that the shares of 4 assessee's sisters in the property sold by him as per Agreement for Assignment-cum-transfer dated 28.3.2015 was acquired by the assessee on 04.10.2014 only and hence held for less than 3 years at the time of sale. Therefore, the gains arising out of the sale consideration received related to the shares acquired from his 4 sisters on 04.10.2014 would be Short Term Capital Gain and therefore indexed cost of acquisition or deduction u/s.54 or 54EC cannot be claimed from it. From the above discussion it can be seen that the assessee has held only his 1/5th share in the property sold for more than 3 years and the 4/5th share acquired from his 4 sisters is held for less than 3 years. Therefore, the c....
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....n four years have lapsed from the end of the assessment year under consideration. As per the Proviso to Sec. 151(1) of the Income Tax Act, 1961, permission of the Principal Commissioner of Income Tax-19, Mumbai is hereby sought to reopen the case of the assessee by issue of notice of the Income Tax Act, 1961." 8. Admittedly, the initiation of re-assessment was on account of the audit objection. The said query raised by the audit team does not form a part of the reasons stated for re-opening. The sanction accorded by the PCIT in terms of Section 151 of the Act is also not placed on record. 9. Mr. Joshi, the learned counsel for the assessee submitted that the Petitioner had made submissions before the assessing officer as narrated at paragraph no. 3.3 of the Petition as well as at Exh. E and Exh. H annexed to the Petition which evinces that the very basis of the reasons recorded namely, that the facts and figures in the entire transaction of the sale of the property were the part of the assessment record. He contended that once an assessing officer conducted enquiry on an issue but the order of assessment is silent thereon, the assessing officer is deemed to have applied his mi....
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....itted that the extraordinary power to reopen the assessment is subject to various conditions which are to be used only in extraordinary circumstances. He submitted that the conditions so imposed for opening an assessment are required to be followed strictly and the AO has to prove that such requisite conditions were not fully and properly fulfilled by bringing on record cogent material. He submitted that the power u/s 147 cannot be exercised arbitrarily or mechanically or in a casual manner. He submitted that the term "reason to believe '' that an income has escaped assessment necessarily implies application of judicial and judicious mind of a prudent and reasonable person. He submitted that a mere bald averment that there is a "reason to believe '' that income has escaped assessment is not sufficient. 12. The learned counsel further submitted that there has to be a rational connection and a live link with such material that income has escaped assessment and mere suspicion cannot be on a subjective satisfaction of the AO. In support of his contention, he relied on the following judgments; (i) ITO v/s. Lakhmani Mewal Das (1976) 103 ITR 437 (SC) ....
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....the documents such as Deed of Transfer and Agreement for Assignment cum Transfer dated 28th March 2015, clarification and evidences regarding cost of acquisition of the flat, replies by the petitioner during the assessment proceeding, notice given by the Solicitors of the petitioner's sisters, receipts issued by the petitioner's sisters and evidences regarding the expenses, were all submitted with the first respondent during the assessment proceeding and the reasons recorded also evince the reference to the aforestated documents. Consequently, there is no new document / material which calls for reassessment that is mentioned in the reasons recorded by the AO. He submitted that a mere review of the same material would amount to a change of opinion in the absence of any tangible material to justify the conclusion that an income had escaped assessment. 16. The learned counsel submitted that neither in the reasons recorded nor in the purported order disposing the objections, there was any specific allegation supported by any cogent material to evince that the earlier AO had failed to apply his mind to the issue. Consequently, it is to be assumed that there was due application of min....
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....Tax-19 Mumbai as per the provisions of section151 of the IT Act, a notice u/s 148 dated 31st March 2021 was issued to the Petitioner. Pursuant to the notice u/s 148 the Petitioner filed return of income on 3rd April 2021. The reasons for reopening the scrutiny assessment was provided to the Petitioner by letter dated 28th August 2021 to which objection was filed on 10th October 2021. 21. The learned counsel submitted that the Jurisdictional Assessing Officer (JAO) 19(1)(1), Mumbai who took charge on 21st December 2021 had this case on his ITBA - Assessment worklist and the case was getting time barred on 31st March 2022. Since he had no jurisdiction over the said assessment, he made a requisition to NaFAC to assign the case to the Assessment unit of NaFAC. Under the DCIT 2(2)'s direction vide email dated 29th December 2021 the objections filed by the Petitioner were addressed and notice u/s143(2) of the Act was issued on 5th January 2022 to assign the case to NaFAC. 22. The learned counsel submitted that since the AO had restricted scope of assessment, the original order of assessment had not opined on the issue of short term capital gain when assessment was completed u/s 143....