TaxTMI 
TaxTMI 
2026 (7) TMI 1652
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....n 139(1) of the Act of 1961, declaring an income of Rs.22,84,090. The case of the petitioner was thereafter selected for scrutiny under CASS. 2.1. During the course of the scrutiny assessment, the Assessing Officer issued a notice dated 16.08.2016 under Section 142(1) of the Act of 1961, whereby, inter alia, information relating to the immovable property sold during the relevant financial year was specifically sought from the petitioner. 2.2. In response thereto, the petitioner submitted a detailed reply dated 24.10.2016, explaining the transaction in question and the long-term capital gain arising therefrom. The stand of the petitioner was that the actual sale consideration of the property was Rs.24,50,000. It was further explained that an additional amount/value of Rs.23,57,605 had been taken into account for stamp-duty purposes on account of the change in the name of the company from "Suncity Granites Pvt. Ltd." to "Vidhya Industries Pvt. Ltd." According to the petitioner, the said amount did not form part of the consideration received on sale of the property. 2.3. The petitioner further relied upon the communication dated 05.10.2016 issued by the Sub-Registrar in suppo....
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....ed to as 'the Act of 1961'). It is submitted that the assessment for Assessment Year 2014-15 had already been completed under Section 143(3) of the Act of 1961 on 30.12.2016, whereas the impugned notice under Section 148 of the Act of 1961 was issued on 26.03.2021, i.e. beyond a period of four years from the end of the relevant assessment year. 3.1. Learned counsel draws the attention of this Hon'ble Court to the first proviso to Section 147 of the Act of 1961, which reads as under: "Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant 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 that assessment year: Provided further that nothing contained in the first proviso shall app....
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....rned income. 3.5. Learned counsel contends that the very transaction and material which formed the subject matter of a specific query and explanation during the original assessment proceedings have subsequently been made the basis for reopening the assessment. The impugned reassessment proceedings, therefore, amount to reconsideration of the same material and are founded merely upon a change of opinion, which is impermissible in law. 3.6. Learned counsel further submits that the reasons recorded for reopening proceed on a factually incorrect premise that the DLC value of the property sold by the petitioner was Rs.48,65,652. According to the petitioner, the actual sale consideration was Rs.24,50,000, while the additional component of Rs.23,57,605 was attributable to the stamp-duty implications arising from the earlier change in the name of the company. It is, therefore, contended that the foundation on which Section 50C of the Act of 1961 has been invoked is itself erroneous. 3.7. Learned counsel for the places reliance upon the judgment dated 24.01.2025 passed by Division Bench of this Court in the case of Saroj Chhabra Vs. Principal Commissioner of Income Tax & Anr.; D.B.....
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....Under the circumstances, no error has been committed by the High Court in setting aside the re-opening notice under Section 148 of the Income Tax Act. We are in complete agreement with the view taken by the High Court. The Special Leave Petition stands dismissed." 3.9. Learned counsel further cited judgment dated 22.12.2021 passed by High Court of Bombay in the case of CEAT Ltd. Vs. Assistant Commissioner of Income Tax; Writ Petition No.3363 of 2019, reported in (2023) 146 taxmann.com 107 (Bombay). The relevant portion is reproduced hereinunder:- "2. We have considered the reasons annexed at Exhibit 'F' to the petition. In our view, respondent has miserably failed to disclose any facts, material or otherwise which has not been disclosed. In our view, first of all reasons indicated change of opinion which is impermissible in law and secondly, the entire basis for re-opening is due to mistake of the Assessing Officer that resulted in under assessment. 3. The Hon'ble Apex Court in Indian & Eastern Newspaper Society vs. CIT(1972) 2 Taxman 197/119 ITR 996/12 CTR 190 has held that an error discovered on a reconsideration of the same material (and no more)....
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.... the question of legality thereof, quash, cancel and set aside the impugned notice (Exhibit - C) dated 27th March, 2019 and the impugned order (Exhibit - H) dated 31st October, 2019." 3.10. Learned counsel also cited judgment dated 06.02.2025 passed by Division Bench of this Court in the case of Rajasthan Marudhara Gramin Bank Vs. Union of India; D.B. Civil Writ Petition No. 6841 of 2015. The relevant portion is reproduced hereinunder:- "14. This Court also observes that the proviso to Section 147 of the Act of 1961, has been incorporated with a legislative intent that in cases where an assessment is sought to be reopened beyond the prescribed limitation period of four years, a stricter threshold must be applied. This higher standard is essential for determining whether the material in question constitutes a failure to disclose income, thereby justifying the invocation of reassessment proceedings on the grounds of escaped assessment. 15. This Court is also conscious of the settled legal proposition that the provisions contained in the taxation statutes are to be interpreted strictly and therefore, an assessment can be re-opened after the statutory limitation of....
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....f concealment of any material facts by the assessee and it appears to be a change of opinion on re-appreciation of evidence or material, which facts were already furnished by the assessee during his regular assessment process. Therefore, on this count also, the writ petition is liable to be allowed." 3. 12. On the strength of the aforesaid submissions and judicial pronouncements, learned counsel for the petitioner submits that the petitioner had made a full and true disclosure of all material facts concerning the transaction during the original scrutiny assessment. The impugned notice, having been issued beyond four years from the end of the relevant assessment year without there being any failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment, is barred by the first proviso to Section 147 of the Act of 1961. It is further submitted that the reassessment is founded upon reconsideration of material already available with the Assessing Officer and, therefore, amounts to an impermissible change of opinion. The impugned notice dated 26.03.2021 and the consequential order dated 01.09.2021 rejecting the petitioner's objections....
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.... The assessee has sold the immovable property (commercial land) as mentioned above and disclosed the less LTCG amounting to Rs. 24,15,652/- (48656522450000) as the assessee not disclosed the sale consideration as per DLC value and made a violation of section 50C of the IT Act. Accordingly, as such the amount of Rs. 24,15,652/-, is actually the undisclosed income of the assessee and the same has escaped assessment and liable to be brought to tax by initiation of proceedings u/s 147/148 of the I.T. Act. I have gone through the information as well as the facts of the case, I have reason to believe that the income of Rs. 24,15,652/- is chargeable to tax has escaped assessment for A.Y. 2014-15 and accordingly, I am satisfied that income to the tone of Rs. 24,15,652/- has escaped assessment, and it is a fit case for initiation of proceedings u/s 147 of the I.T. Act, 1961. 8. Applicability of provisions of section 147/151 to the facts of the case: In this case, return of income was filed for the year under consideration and regular assessment u/s 143(3) was passed on 30.12.2016. However, the issue under consideration was not considered in the assessment u/s 14....
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....for stamp-duty purposes was attributable to the change in the name of the company from "Suncity Granites Pvt. Ltd." to "Vidhya Industries Pvt. Ltd." and did not form part of the actual sale consideration. Thereafter, the assessment was completed under Section 143(3) of the Act of 1961 on 30.12.2016 at the returned income. 8. The reassessment proceedings have been initiated on the premise that the DLC value adopted by the Sub-Registrar was Rs.48,65,652, whereas the petitioner had disclosed the sale consideration as Rs.24,50,000. On this basis, the Assessing Officer formed the belief that Section 50C of the Act of 1961 was attracted and that income to the extent of Rs.24,15,652 had escaped assessment. 9. This Court finds that the transaction forming the basis of the reassessment proceedings was specifically the subject matter of a query during the original scrutiny proceedings. The petitioner had furnished its explanation regarding the sale consideration as well as the additional amount taken into account for stamp-duty purposes. Therefore, it cannot be said that the primary facts relating to the transaction were not disclosed by the petitioner during the original assessment pr....