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TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 524
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....e following reliefs :- "7(a) quash and set aside the impugned notice dated 31.03.2021 at Annexure-'A' to this petition; (b) quash and set aside the impugned order disposing off objections dated 31.03.2022 at Annexure-'B' to this petition; (c) quash and set aside the impugned assessment order dated 31.03.2022 at Annexure-'C' to this petition;" 5. The factual matrix giving rise to this petition can be summarized as under :- 5.1. The petitioner filed his return of income for Assessment Year 2015-16 on 31.03.2016 declaring total income of Rs. 1,75,05,700/-. The return of income was selected for scrutiny on the ground that the sale consideration disclosed in capital gain schedule is significantly less and sale consideration of property in ITR is less than sale consideration reported in Form 26QB. Thereafter, notices under Section 142(1) of the Income Tax Act, 1961 (For Short "the Act") dated 09.01.2017, 21.07.2017, 04.09.2017 and 08.09.2017 were issued calling for specific details relating to sale consideration disclosed in capital gain schedule and sale consideration of property. The petitioner filed replies to such notices and after having been satisfi....
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....ormation referred to in the reasons recorded is not of any nature which was not known to the Assessing Officer at the time of scrutiny. It was, therefore, submitted that this is a case of mere change of opinion about the characterization of income to be considered as long term capital gain or income from business which cannot be considered as an escapement of income. It was further submitted that there are no sufficient grounds to reopen the assessment beyond the period of four years. 7. Learned advocate Mr. B.S. Soparkar has also placed reliance on the following decisions :- (i) In case of Parashuram Pottery Works Co. Ltd. v. Income Tax Officer, Cirlce-1, Ward A reported in 106 ITR 1 (SC); (ii) In case of Nanubhai Vashrambhai Ramolia v. Assistant Commissioner of Income Tax reported in [2024] 166 Taxmann.com 598 (Guj.) (iii) In case of Placid Ltd. v. Assistant/Deputy Commissioner of Income Tax reported in [2022] 135 Taxmann.com 192 (Cal.). (iv) In case of Aroni Commercials Ltd. v. Deputy Commissioner of Income Tax(2)-1 reported in [2014] 44 Taxmann.com 304 (Bombay). (v) In case of Manishkumar Tulsidas Kaneriya v. Deputy Commissioner o....
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....all material facts necessary for the assessment. 8.1. It was also submitted by learned learned Senior Standing Counsel Mr. Karan Sanghani that in the facts of the case when the respondent Assessing Officer was in possession of the new information or evidence which indicates that the income has escaped assessment, the principle of change of opinion would not apply as same set of facts is not considered while recording reasons. It was pointed out that the contents of notice issued by the Assessing Officer under Section 142 (1) and 143(2) of the Act and the order sheet entries recorded during 143(3) proceedings clearly show that new changes in the facts of the case are considered while recording reasons for reopening were available and the material facts relevant for the assessment on the issue under consideration were not filed during the course of regular assessment proceedings which may be embedded in the Annual Report, Profit and Loss Account, Balance Sheet, Books of Accounts in such a manner that it would require due diligence by the Assessing Officer to extract such information. It was, therefore, submitted that no interference may be made while exercising extraordinary juris....
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....rs should not be challenged merely based on the timing of their documentation. Furthermore, the Petitioner has not established that any prejudice resulted from the timing of the orders. If the Petitioner was able to present their case adequately during the proceedings, then the procedural timing does not invalidate the Respondent's findings or decisions. The emphasis should be on the substance of the objections rather than technicalities of the order issuance. 10. With reference to para 3.6, the assertion that the Respondent must issue a draft assessment order and provide a video conference is unfounded. There is no statutory requirement for such procedures in cases handled by a central charge, as these are not subject to faceless assessment norms. The principles of natural justice are upheld as long as the taxpayer is given a fair opportunity to present their case. The Respondent has provided sufficient opportunities for the Petitioner to submit information and defend their position during the assessment process. Thus, the claim that the impugned assessment order is illegal due to the absence of a draft order and video conference lacks merit. The Respondent h....
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....017 under Section 143(3) of the Act after considering the nature of transactions of sale of property which is the basis for issuance of the notice under Section 148 of the Act for reassessment. By notice under Section 143(2) of the Act dated 09.01.2017, details with regard to nature of business activity carried out by the assessee during the financial year were called for, whereas by further letter dated 21.07.2017, the petitioner was called upon to reconcile the large value transactions and sale consideration disclosed in the capital gain statement of return of income and submit the details of the same. The respondent thereafter issued letter dated 08.09.2017 to the petitioner asking for details regarding verification of the property transactions in question. The petitioner submitted reply giving details of the nature of business to the effect that he was Director in various firms which are engaged in business of development and also rendered income from sources of capital gains. The petitioner also provided details of the transactions of the property in the form specified in the notice issued by the Assessing Officer recording statement of long term capital gain in the year under....
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....ied with the factual analysis made in the report that the nature of sale of the property (land at Block No. 1740, 1746, 1754 and 1752/2, Bhayli) lies under the head business income and it should have been offered by the assessee under the head Profits and Gain from Business and Profession and not as Long Term Capital Gain as claimed by him in his return of income filed for the year under consideration 5. Findings of the AO: The information is received from the office of DDIT (Inv.)-1. Vadodara regarding the claim of Long Term Capital Gain on sale of properties (plots) for scheme Pratham Meadows and Pratham Vistas of Rs. 1,95,67,454/- by the assessee during the year under consideration. Further, the assessee has incurred Short Term Capital Loss of Rs.1,30,84,691/- during the year on sale of shares of Infosys Ltd. The assessee has purchased share of Infosys during the year after the company had announced bonus share. After the bonus share is received in his demat account on 10.10.2014, the assessee has sold the original shares on various dates during the year and booked short term capital loss. Further, the assessee has set off this STCL on sale of shares with the LTCG on sa....
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....ct was made on 23.11.2017 which does not include the issues discussed in para 4 to 6 above. Since, 4 years from the end of the relevant year has expired in this case, the requirements to initiate proceedings u/s 147 of the act are reason to believe that income for the year under consideration has escaped assessment because of the failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the A.Y. under consideration. It is pertinent to mention here that reasons to believe that income has escaped assessment for the year under consideration have been recorded in above paragraph 6. I have carefully considered the assessment records containing the submissions made by the assessee in response to various notices issued during the assessment/re-assessment proceedings and have noted that the assessee has not fully and truly disclosed the following material facts necessary for his assessment for the year under consideration: The detailed information regarding income from sale of immovable property which should have been shown under the head PGBP and not as LTCG and its subsequent set off with the loss on sale of shares. It is evident ....
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....r reopening, it is clear that the same amount of income was offered to tax by the petitioner as long term capital gains which was considered by the Assessing Officer on the basis of the information disclosed by the petitioner during the course of regular assessment. Therefore, when all the material information were truly and fully disclosed by the petitioner and therefore, as per the proviso to Section 147 of the Act, the respondent Assessing Officer could not have assumed the jurisdiction to reopen the assessment in absence of any new tangible or concrete facts having live nexus with the income escaping assessment for the year under consideration. It is clear from the above reasons recorded that the Assessing Officer has merely formed a belief that income has escaped assessment on mere change of opinion to treat long term capital gains as income from business. 15. It is also pertinent to note that the Assessing Officer has not disposed of the objections raised by the petitioner and the same were disposed of after the Assessment Order under Section 147 of the Act was passed on 31.03.2022 which is evident from the time recorded in each of the orders as the same were digitally sig....