TaxTMI 
TaxTMI 
2025 (5) TMI 2254
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.... regular assessment proceedings. 3. The Ld. CIT (A) has failed to appreciate that the Assessing Officer during the assessment proceeding for the A.Y.201415 did not examine this issue or formed any opinion. 4. The Ld. CIT(A)'s quashing of the Assessment on the basis of change of opinion is incorrect when there is no opinion formed by any authority in the first place, any change of opinion cannot be said to exist or arise. 5. The Ld. CIT (A) has failed to appreciate that the provisions of section 45(2) are not attracted in this case and Capital Gains are to be taxed by invoking section 53A of transfer of Property Act. 6. The Ld. CIT (A) has erred in recognising that the assessee has relinquished his right over the 60% share and therefore liability to pay tax arises. 7. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT (A) may be set aside and that of the Assessing Officer restored." 4. Brief facts are as follows:- The assessee is a private limited company engaged in the business of infrastructure development. The assessee has filed its return of income for....
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....as come to notice of AO after conclusion of scrutiny proceedings. Therefore, it was in the knowledge of the AO during the original scrutiny proceedings. I am therefore in agreement with view of assessee that all material facts necessary was available for original assessment and the same were truly and fully disclosed. Assessee was also of opinion that there is no alleged failure on the part of appellant to disclose all the material facts relevant for the assessment and that between date of original order of assessment sought to be reopened and the date of forming of opinion by the AO, there is no change of law, no material has come on record and no Information has been received. Assessee has stated that this is change of opinion by the AO. In support of view, assessee has given various case studies in its favour. These include judgement of jurisdictional Hon'ble High Court (Madras) in the following cases: (i) CIT vs. Abdul Rahman Sait (ii) CIT vs K. K. Palaniswamy (iii) CIT vs RPG Transmission Ltd (iv) CIT vs Ashley Services Ltd. (v) CIT vs M/s. Chennai Garments Respectfully following these jurisdictional H....
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....s under:- 4. The assessment for the assessment year 2014-15 has been reopened u/s 147 of the Act vide notice dated 30th March 2021 for the following reasons (as provided in the notice under section 143(2) read with section 147 of the Act vide reference no ITBA/AST/F/143(2) 4/2021-22/103273 7796(1) dated 30th April 2021): a. It is noticed that as per Note 24 to annual accounts 2013-14, the assessee on 8.6.2013 converted the land held by it as fixed assets to project in progress. The value of the land as on the date of conversion as Rs. 3401,556,840/-. The notional/profit on conversion of fixed asset to project in progress of 1254,289,672/- has not been recognised in the books of accounts of the Company. It has also been stated that taxability u/s 45(2) would arise only in the year of sale and from Note 5 under Current inabilities, the assessee has received advance from Customer segregating to Rs. 3684, 686,467 and Rs. 1300,000,000/- from the JDA Partners. b. As per the definition u/s 2(47), transfer in relation to a capital asset includes. sale, exchange or relinquishment of the assets or the extinguishment of any right therein. Transfer als....
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....evant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under 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 ....
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....the circumstances, viz., failure to disclose fully and truly all material particulars which would confer jurisdiction to proceed/initiate reassessment proceeding beyond four years and within six years. In this regard, it may be relevant to 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 [2006] 155 Taxman 659/286 ITR 89/1 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 wri....
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.... confirm, the order. (Emphasis Supplied) 11. While on the question of existence or otherwise of jurisdictional fact which would enable the authority to invoke the extended period of limitation of six years for reassessment, it may also be relevant to note that the question of limitation has been understood to be one involving jurisdiction even under the Excise Law and 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. Collector of Central Excise 2003 taxmann.com 382 (SC)/[2004] 3 SCC 48, wherein, after extracting the judgment of the Hon'ble Supreme Court in the case of Easland Combines v. Collector of Central Excise 2003 taxmann.com 2076, the Court proceeded to conclude as under: '68. Even in Easland Combines [(2003) 3 SCC 410 : (2003) 152 ELT 39] this Court held: (SCC pp. 424-25, para 31) "31. It is settled law that for invoking the extended period of limitation duty should n....
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....s of the proviso to section 147 of the Act would vitiate the entire proceedings. In this regard, it may be relevant to refer to the following judgments: (a) Duli Chand Singhania v. Asstt. CIT [2004] 136 Taxman 725/269 ITR 192 (Punj. & Har.): ''that the reasons recorded for issue of notice showed that the satisfaction recorded therein was merely about the escapement of income. There was not even a whisper of an allegation that such escapement had occurred by reason of failure on the part of the assessee to disclose fully and truly all the material 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) CIT v. Elgi Ultra Industries Ltd. [2008] 296 ITR 573 (Mad.) "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 ....
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....ns India Ltd. v. Tarun Seem, Dy. CIT [2003] 132 Taxman 123/[2004] 266 ITR 566 (Bom.) "8. The Assessing Officer seeks to reopen the assessment after a period of four years from the end of the assessment year and in view of the judgment of this court in the case of IPCA Laboratories Ltd. v. Gajanand Meena, Deputy CIT (No. 2)[2001] 251 ITR 416, the Assessing Officer cannot act in the matter of reopening of assessment beyond four years, unless he has reason to believe that income has escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. He submitted that a bare reading of the reasons shows that reopening is sought to be effected only on the basis of the case records. He submitted that on two out of three points mentioned in the reasons, the Assessing Officer merely states "that the issue needs to be looked into". That, on those two issues regarding subsidy and provident fund being disallowed, the Assessing Officer does not even say that there is escapement of income from assessment. He therefore submits that the proviso to section 147 is not attracted. That, on the said two points, there....