TaxTMI 
TaxTMI 
2022 (2) TMI 1457
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.... year beginning on or before the 1st day of April, 2012. ii. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the relevant facts of the case in respect of addition made on account of undisclosed foreign assets/investment. 2. Facts in brief are that assessment year in consideration has been reopened by way of issue of notice u/s 148 of the Income Tax Act, 1961 (in short 'the Act') on 27.03.2015. The Assessing Officer rejected the objections raised by the assessee against the reopening and passed assessment order on 30.03.2016 wherein he made addition related to foreign investments of assessee. The relevant findings of the Ld. Assessing Officer is reproduced as under : "9.9 Therefore from the above discussion the following conclusion emerges which clearly rebuts the contentions of the assessee Smt Indira D Thakkar. i. That the assessee Smt Indira D Thakkar and her family members have derived financial benefits from the maturity proceeds of RIB. ii. That the submission of assessee Smt Indira D Thakkar that investment in RIB was made by Sh. Chagganlal Mulji Suchak through Chagganlal Family ....
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....in overseas assets and used special purpose vehicle to bring it back in India via RIB and through BC account held abroad. 9.11. Therefore, from the above it is clear that investment of 15 million GBP was made in the name of Shri Suryakant C. Suchak. Hence the investment made in RIB of GBP 15,00,000 in the year 1998 relevant to A.Y. 1999-2000 is taxed in the hands of Shri Suryakant C Suchak on substantive basis and protective addition of GBP 11,69,600 (GBP 1500000-330600) is made in the hands of Shri Dilip J. Thakkar. 9.12 Further addition of GBP 1,36,000 is made in the hands of Assessee Smt Indira D Thakkar. Considering the conversion rate of GBP to INR at Rs. 76.68, the total deposit works out in IN at Rs, 1,04,28,480/-, which is taxed as concealed income for the assessment year in the AY. 1999-2000 relevant to the F.Y, 1998-1999. Penalty u/s 271 (1) (c) is initiated separately." 3. On further appeal, the assessee challenged that reopening has been done beyond the limitation period of 6 years which is illegal and bad in law. The assessee relied on judgment of Hon'ble Delhi High Court in the case of Brahm Datt v. ACIT and Others [W.P.(C) 1109/2016] and submitte....
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....relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year; c. if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment. Explanation.- In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section." 6.1 The Ld. CIT(A) has quashed the reassessment following the findings of the Hon'ble Delhi High Court in the case of Brahm Datta (supra) wherein Hon'ble High Court has held that section 149(1)(c) has to be applied prospectively and reassessment could not be reopened beyond the period of 6 years in terms of provisions of section 149 of the Act as applicable at relevant time. According to Hon'ble High Court any change in law upsetting the position and imposing tax liability after that date, even if made during the cu....
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.... any foreign asset or financial interest in any foreign entity, or that the asset did not belong to it or any other ground which may be available. The assessee cannot be deprived of this chance while replying to the notice. 42. Therefore, even if we do not fall back on the reason given by the High Court that the revenue cannot take a fresh ground, we are clearly of the view that the notice and reasons given thereafter do not conform to the principles of natural justice and the assessee did not get a proper and adequate opportunity to reply to the allegations which are now being relied upon by the revenue. 43. If the revenue is to rely upon the second proviso and wanted to urge that the limitation of 16 years would apply, then in our opinion in the notice or at least in the reasons in support of the notice, the assessee should have been put to notice that the revenue relies upon the second proviso. The assessee could not be taken by surprise at the stage of rejection of its objections or at the stage of proceedings before the High Court that the notice is to be treated as a notice invoking provisions of the second proviso of Section 147 of the Act. Accordingly, we ....