TaxTMI 
TaxTMI 
2026 (10) TMI 525
X X X X Extracts X X X X
X X X X Extracts X X X X
.....09.2016 followed by various notices issued u/s 142(1) alongwith questionnaires which were duly replied. The AO after considering the submissions made by the assessee, passed the assessment order u/s 143(3) of the Act dated 14.12.2017 at a total income of INR 54,59,110/-. Thereafter, based on the information received from the Investigation Wing, Ahmedabad, the case of the assessee was re-opened by issue of notice u/s 148 on 31.03.2021. In response, the assessee filed return of income of INR 48,69,080/- i.e. income finally assessed u/s 143(3) of the Act after the order of ld. CIT(A). The AO alleged that the assessee has shown capital gain of INR 14,08,915/- from the sale of 10,000 shares of Safal Herbal Ltd. which is a penny stock company and made the addition of the entire sale consideration of INR 31,17,000/- u/s 68 of the Act. 3. Aggrieved by the said order, the assessee is in appeal before ld. CIT(A) wherein the assessee has challenged the re-opening of the assessment based on the borrowed satisfaction as well the taking the plea that all the information with respect tot eh sale of shares and income declared as long term capital gains have been examined and therefore all mate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rves to be hold bad in law and consequent order be quashed. He placed reliance on the judgment of Hon'ble Supreme Court in the case of CIT vs Kelvinator of India Ltd. reported in [2010] 320 ITR 561 (SC) and in the case of Calcutta Discount Co. Ltd. vs ITO reported in [1961] 41 ITR 191 (SC). He also placed reliance on the following judgments:- ➤ German Remedies Ltd vs. DCIT [2006] 287 ITR 494 (Bom) ➤ CIT vs. Foramer France [2003] 264 ITR 566 (SC) ➤ Tata Business Support Services Ltd. v. Dy. CIT [2015] 232 Taxman 702 (Bom) ➤ Tirupati Foam Ltd. v. Dy. CIT [2016] 380 ITR 493 (Guj) ➤ Gujarat Eco Textile Park Ltd. v. ACIT [2015] 372 ITR 584 (Guj) ➤ Nirmal Bang Securities (P) Ltd. v. ACIT. [2016] 382 ITR 93 (Bom) 7. On the other hand, ld. Sr. DR for the Revenue vehemently supported the orders of the lower authorities and submits that in the instant case, fresh information was received after the conclusion of the assessment proceedings from the Investigation Wing, Ahmadabad that assessee has carried out transactions in the shares of Safal Herbal Ltd. which was a penny stock company and during....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n of the facts and details filed, the AO had accepted the LTCG of INR 3,01,82,356/- as exempt income u/s 10(38). The Full Bench of the Delhi High Court in CIT vs. Kelvinator of India Ltd. Reported in 256 ITR 1 held that "Section 147 of the Act does not postulate conferment of power upon the assessing officer to initiate reassessment proceedings upon his mere change of opinion." The Full Bench of the Delhi High Court also taken into consideration the Circular No. 549 dated 31.10.1989 issued by CBDT explaining the scope of amended section 147 of the Act which reads as under: "7.2 Amendment made by the Amending Act, 1989 to reintroduce the expression "reason to believe" in section 147 A number of representations were received against the omission of the words "reason to believe" from section 147 and their substitution by the "opinion" of the Assessing Officer. It was pointed out that the meaning of the expression, "reason to believe" had been explained in a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al which had been supplied by the assessee himself. We also cannot accept submission of Mr. Jolly to the effect that only because in the assessment order, detailed reasons have not been recorded on analysis of the materials on the record by itself may justify the Assessing Officer to initiate a proceeding under section 147 of the Act. The said submission is fallacious. An order of assessment can be passed either in terms of subsection (1) of section 143 or sub-section (3) of section 143. When a regular order of assessment is passed in terms of the said sub-section 3 of section 143 a presumption can be raised that such an order has been passed on application of mind. It is well known that a presumption can also be raised to the effect that in term of clause (e) of section 114 of the Indian Evidence Act the judicial and official acts have been regularly performed. If it be held that an order which has been passed purportedly without application of mind would itself confer jurisdiction upon the Assessing Officer to re-open the proceeding without anything further, the same would amount to giving premium to an authority exercising quasi-judicial function to take benefit of its ....