TaxTMI 
TaxTMI 
2024 (10) TMI 866
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....ng return income filed by the assessee. The case was reopened on the ground that during the course of assessment proceedings for AY 2015-16, certain issues regarding taxation of deemed rental income came up. The assessee herself had offered Rs. 22,20,000/- for taxation as additional income under the head "Income from House Property" during assessment proceedings for AY 2014-15 on 3 properties. AO found that deemed rental income was not offered for taxation in ROI in respect of 3 properties. Accordingly, the case was re-opened after recording the reason for reopening the assessment u/s 147 of the Act that assessee had deemed rental income amounting to Rs. 22,20,000/- during the year. Therefore, notice u/s 148 of the Act dated 30.03.2019 was issued upon the assessee. In response to the notice u/s 148, the reasons recorded were also supplied to the assessee. In response, assessee filed her return of income. The assessee filed objections on the issue of reopening of assessment u/s 147 of the Act and the objections were disposed off by AO vide letter dated 24.12.2019. Subsequently, the re-assessment proceedings were completed u/s 147 r.w.s. 143(3) of the Act on 28.12.2019 determining to....
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.... A.O. had taken the wrong figure of concealment in the REASON RECORDED and different amount of addition was made than the recorded figures while completing re assessment proceeding which clearly shows that AO was not sure which amount of income has escaped assessment at the time of recording reasons. The Learned CIT (A) while deciding on the ground no 1 in his order did not consider these arguments at all, he had only mentioned "I have carefully considered assessment order and relevant submission of the appellant, it is noticed that appellant herself admitted and offered expected rent of Rs 22,20,000/- on the properties discussed during the assessment year 2014-15. A.O. had found that appellant had not offered the same deemed rent in ROI filed for AY 2012-13 and thus failed to disclose fully and truly all material facts necessary for assessment. The appellant had also pointed out that learned Principal Commissioner of Income Tax, while giving permission as per section 151 of the Income Tax Act,1961 did not apply his mind because he had given the permission on wrong figures of concealment mentioned in the reasons, inspite of the fact that CIT (A) order was on recor....
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....T(A) has erred in law in upholding action of the A.O. in reopening the completed Assessment under section 143(3) of the income Tax Act,1961 beyond four years on arbitrary grounds It is an admitted fact that the original assessment for Assessment year 2012-13 was completed under section 143(3) of the Act by A.O. vide order dated 12-08- 2014.and notice under section 148 was issued on 30-03-2019 after taking approval from Principal Commissioner of Income Tax. As per section 148 of the Act, "Where the assessment u/s 143(3) has been made for the relevant Assessment year, no action shall be taken under this section after expiry of four years from the end of relevant assessment year, unless any income chargeable to income tax has escaped assessment for such assessment year by reason of failure on the part of the assessee to make a return or in response to notice u/s 142(1) or section 148 or to disclose fully and truly all materiel facts necessary for his Assessment for that year". Whereas in case of the Appellant she had been filing her returns regularly from the last more than forty years and had been filing balance sheets with complete details of the assets and liabilities, and....
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....D 29ITR 500 & CENTRAL PROVISIONCES MANGANESE ORE CO LTD VS ITO 191ITR 662 are not relevant to our case. The facts are altogether different in these cases most cases relates to reopening of case within 4 years, where it was held that "Whether the material would conclusively prove the escapement is not concern at that stage specially Apex court cases relates to escapement of income within four years. The present appeal before the HON'BLE Bench is whether reopening of the case is valid beyond four year, If there is no failure on the part of the appellant and secondly can A.O. changed his opinion in present circumstances after four years on the grounds that he did not apply his mind properly. In our case we strongly rely on the following JUDGEMENTS, because in our humble submission reopening of case beyond four years is different than reopening within four years. 1. The cases beyond four years, can only be reopened if there is any failure on part of the assessee in not disclosing its income whereas the applicant had declared everything and the same was examined and accepted so later on it cannot be reopened after four years, we get supports from the following judgemen....
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....hown in the notice as income escaping assessment and addition made while passing the order, which means Assessing officer was not sure about the amount of income escaped as he did not apply his mind before issuing the notice u/s 148 of the Act, the reason recorded cannot be rectified so order passed is invalid. 2. CIT VS INSECITICIDES (INDIA)LTD 357 ITR 330 - it was also held in this case that when the basis of concealment of income is not correct the re assessment is invalid, in our case also the basis for concealment of income was assessment year 2015-16 where addition made was reduced by CIT(A) order which was passed before the date of reason recorded and this fact was brought to the notice of AO before his recording of reasons. 3. Principal Commissioner of Income Tax vs N C CABLES LTD 391 ITR (DHC) - where it was held where there is no proper application of mind by PCIT reopening is bad in law. in our case the PCIT had given sanction on the concealment of Income of Rs 17,09,400/- when AO was informed that CIT(A) had reduced this addition to Rs 15,54,000/- and order was available in the records, so it clearly indicates no application of mind thus order passed r....
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....d is required to be quashed as decided by D.H.C, in the case of PR CIT VS SAMCOR GLASS LTD. The condition laid was as follows, Once the notice is issued u/s 148 than assessee has to file the return, he can ask for the reason recorded for reopening of the case, the A.O. has to supply the reason and if the assessee raised the objection than within reasonable time. A, O, has to pass speaking order before proceeding with the re- assessment. In our case, 1. Objections were filed on 30-04-2019 2. Notice was issued U/S 142(1) ON 10-12-2019 3. Again request was made to pass order on the objection raised on 30-04-2019 vide letter date on 11-12-2019 4. Response to objection was made on 24-12-19. Again objection was filed vide our letter dated 26/12/2019 to pass speaking order on all the objection raised by us in our letter dated on 30-04-2019 5. The learned A.O. did not pass any order on this but passed the Order on 29-12- 2019. From the above stated facts your good self will observe that the procedure prescribed by Apex Court was not followed. As notice under section 142(1) was issued before passing the speaking order rejecting ....
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....TO Ward 4(3), where it was held that no deeming rental income arises in case of not suitable tenant how non habitable property can fetch any rent, It is also an admitted fact that property at Dhauj was being used sincec1991-92 and 1992-93 for R&D purpose and necessary evidences were also filed that deduction of the total cost was given as per section 35 of the Act. We had also filed the judgement of DRP for the assessment year 2016-17 where such addition was deleted, but in spite of this the addition made was & upheld by CIT(A) also. In our humble submission total additions made is required to be deleted, if your Honour does not agree with us with regards to properties in Delhi than deduction with regards to Dhauj property amounting to Rs 2,40,000 minus 72000 =1,68,000/- should be done as per DRP order. We are sure goodself will find our submission in order." 7. Considered the rival submissions and material placed on record. We observed that Assessing Officer has reopened the present assessment year under consideration under section 147 of the Act, no doubt, after four years. Assessing Officer has to record as per Second Proviso to Section 147 that reasons of t....
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.... assessee established and carried on R&D unit for its business purposes since 1991-92. As per the record, assessee has claimed deduction u/s 35(2)(iii) of the Act. The abovesaid property was sealed by DMC in the year 2007 along with other properties. However, these properties were de-sealed in November 2008. As per the information submitted before us along with various photographs of the properties which show that the abovesaid property was not habitable and the same was repaired and made habitable in the year 2016-17. The issue is whether deemed rental income should be determined for the inhabitable properties for the purpose of tax or not. The similar issue was raised by the assessee in AY 2016-17 before DRP and ld. DRP held as under :- "8.1 The DRP in AY 2016-17 had decided as follows:- "8.1 We have perused the draft assessment order and considered the submission of the assessee. In view of the fact that deduction under section 35(1)(i) of the Act has been allowed on the same property, it cannot be held that the same property was not used for the business purposes in the relevant A Y. It is also submitted by the assessee that it did not offer any expected rent ....