TaxTMI 
TaxTMI 
2023 (12) TMI 217
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...., 1961 (hereinafter referred to as "the Act") vitiates the impugned proceedings. 2. Brief facts: 2.1. The petitioner Company is stated to be engaged in the business of Real Estate and had investments in Media and Entertainment Sector through its Subsidiaries. The petitioner filed its return of income for the assessment year 2013-14 on 11.12.2013 declaring a total income of Rs. 37.42 Crores and Rs. 45.50 Crores under normal provisions and Section 115 JB of the Act respectively. The petitioner was selected for scrutiny under CASS. A notice under Section 143(2) of the Act dated 02.09.2014 was issued and a notice under Section 142(1) of the Act dated 26.06.2015 along with questionnaire was issued to the petitioner company. The petitioner submitted its reply to the above notices / communication. A notice under Section 142(1) of the Act was issued on 26.06.2015 wherein the petitioner was required to produce inter alia details of brought forward loss and unabsorbed depreciation. The petitioner in response to the above notice submitted the details sought for vide its letter dated 08.07.2015 inter alia including copy of the original return of income for the assessment year 2013-14, co....
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.... Term Capital Loss." 2.4. Thereafter, the impugned notice dated 24.03.2020 was issued by the 1st Respondent under Section 148 of the Act on the premise that, for the assessment year 2013-14, there were reasons to believe that income chargeble to tax for the assessment year 2013-14 has escaped assessment within the meaning of Section 147 of the Act. The petitioner vide its letter dated 20.10.2020 filed a return of income in respect of the notice issued under Section 148 of the Act and also sought for reasons for reopening of the assessment. In response the petitioner was furnished with the reason for reopening the assessment vide communication dated 19.02.2021 wherein the very same transaction which is sought to be enhanced by the Appellate Authority by treating the sale of land as business income was once again sought to be reassessed / revisited. The relevant portion of the above communication is relevant and thus extracted hereunder : The CIT(A) during the course of appellate proceedings in the said case, on prusal of the computation of income, on observation that the assessee has shown Long Term Capital Loss to the tune of Rs. 9,36,04,656/-was shown. On further enqui....
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....de on the basis of mere change of opinion without fresh tangible material only on the basis of the observation made by the appellate authority which is impermissible. c) Insofar as the alleged investment in Platex Limited, Mauritius it was submitted that during the relevant financial year there was no fresh investment and hence the reasons set out for reopening the assessment are non-existent. d) Reliance was placed on Section 50C of the Act to submit that the value adopted for the purpose of stamp duty, shall be deemed to be the full value of consideration received as a result of such transfer. e) Further, considering the fact that the assessment year was mentioned as AY 2015-16 instead of AY 2013-14 in the reason for re-opening of assessment, would reveal that the above exercise has been carried out in a mechanical fashion. The 3rd Respondent on considering the objections rejected the same as being untenable in law and had directed the petitioner to cooperate in the assessment proceedings. It is at this stage that the notice dated 24.03.2020 and the consequential proceeding dated 27.02.2021 are challenged in the present Writ Petition. 3. Case of the ....
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....nregistered nor was any stamp duty paid which revealed that the sale was made without reference to guideline or fair market value. It is further stated that informal enquiry revealed that the market price was around Rs. 3 Crores per acre which revealed under valuation of the sale consideration and suppression, thus there is a possibility of tax evasion. It was further stated that the petitioner had received investment from Platex based in Mauritius and it was thus stated that one cannot rule out the possibility of the cash generated from real estate transaction being routed through Mauritius company and being brought back. In other words there is a possiblity of round tripping. It was thus submitted that the reassessment is made on the basis of new material and not on mere change of opinion. 6. Heard both sides and perused the material on record. 7. On hearing both sides though submissions were advanced on a number of aspects / grounds, I would think it may not be necessary to deal with any other ground except the ground that the impugned proceeding is vitated in the absence of a finding that income chargeable to tax has escaped assessment by reason of failure on the part of ....
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.... sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for the assessment year." A reading of the above provision would show that while it is open to the Assessing Officer to invoke Section 147 of the Act within a period of four years, if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment, subject to the provisions of Sections 148 to 153 of the Act. The proviso to Section 147 of the Act, enables the Assessing Officer to make reassessment even after the expiry of four years from the end of the relevant assessment year, but, within six years from the relevant assessment year, if the income chargeable to tax has escaped assessment under the following circumstances, viz., a. Failure of the assessee to make a return under Section 139 of the Act. b. Does not make a return in response to a notice issued under Sub-Section (1) to Section 142 or Section 148 of the Act. c. Failure of the assessee to disclose fully and truly all material facts necessary for assessment. 9. In the present case, admittedly the extended period of six....
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....o refer to the following judgments to appreciate the relevance and importance of existence of jurisdictional facts and an application of mind as to its existence by the authority concerned before assuming jurisdiction. It is relevant to extract the judgment of the Hon-ble Supreme Court in the case of Arun Kumar v. Union of India reported in (2007) 1 SCC 732, which reads as under: "74. A "jurisdictional fact" is a fact which must exist before a court, tribunal or an authority assumes jurisdiction over a particular matter. A jurisdictional fact is one on existence or non-existence of which depends jurisdiction of a court, a tribunal or an authority. It is the fact upon which an administrative agency-s power to act depends. If the jurisdictional fact does not exist, the court, authority or officer cannot act. If a court or authority wrongly assumes the existence of such fact, the order can be questioned by a writ of certiorari. The underlying principle is that by erroneously assuming existence of such jurisdictional fact, no authority can confer upon itself jurisdiction which it otherwise does not possess." 75. In Halsbury-s Laws of England, it has been stated: "Wher....
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....nd in the absence of finding of the existence of the circumstances enabling the invoking of the extended period, it has been held by the Hon-ble Supreme Court that the issuance of Show Cause Notice itself is impermissible. In this regard, it may be relevant to refer the judgment in the case of ITW Signode India Ltd v. CCE reported in (2004) 3 SCC 48, wherein, after extracting the judgment of the Hpn-ble Supreme Court in the case of Easland Combines, the Court proceeded to conclude as under: "68. Even in Easland Combines [(2003) 3 SCC 410] this Court held: (SCC pp. 424-25, para 31) "31. It is settled law that for invoking the extended period of limitation duty should not have been paid, short-levied or short-paid or erroneously refunded because of either fraud, collusion, wilful misstatement, suppression of facts or contravention of any provision or rules. This Court has held that these ingredients postulate a positive act and, therefore, mere failure to pay duty and/or take out a licence which is not due to any fraud, collusion or wilful misstatement or suppression of fact or contravention of any provision is not sufficient to attract the extended period of limita....
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....al facts necessary for his assessment. Absence of this finding which is a "sine qua non" for assuming jurisdiction under section 147 of the Act in a case falling under the proviso thereto, made the action taken by the Assessing Officer wholly without jurisdiction. The notice was not valid and was liable to be quashed. " (emphasis Supplied) b) Commissioner of Income Tax vs. Eigi Ultra industries Ltd. (296 ITR 573): "...the reopening of the assessment under s. 148 beyond the period of four years at the end of the relevant assessment year can be sustained only if it is established that there is a failure on the part of the assessee to disclose fully and truly all material facts. in this case there is no finding that there is failure on the part of the assessee to disclose fully and truly all material facts". (emphasis supplied) c) Commissioner of Income-Tax v. Premier Mills Ltd., (2008) 296 ITR 157: "6. In case where the assessment is completed under section 143(3) of the Income tax Act, the reopening of the assessment under section 148 beyond the period of four years at the end of the relevant assessment year can be sustained only if it is es....