TMI Blog2017 (4) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... ing under section 147 is held to be valid. The assessee has tried to take shelter under the exception provided by the above stated proviso where an assessment under sub-section (3) of section 143 has been completed, no action after the expiry of four years from the end of the assessment year can be taken. But as stated above, when the assessee has not disclosed fully and truly the facts necessary for the assessment, this proviso will not come to its rescue. Consequently, we hold that the entire reassessment proceeding in this case is valid and therefore, the action of the Assessing Officer is upheld. The assessee fails on this legal issue. Invoking the provisions of the section 50C - Held that:- The main grievance of assessee is that the assessee made a request the Assessing Officer to refer the valuation issue to the valuation cell under section 50C(2) of the Act, which was not considered by the Assessing Officer. When this was raised before the learned Commissioner of Income-tax (Appeals), he also rejected it. In our opinion, we find merit in the argument of the learned authorised representative. Before considering valuation under section 50C(1) of the Act, if the assessee req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has placed reliance on the judgment of the apex court in the case of CIT v. Kelvinator of India Ltd. reported at [2010] 320 ITR 561 (SC). The conclusion drawn by the hon'ble Supreme Court cited supra was that after April 1, 1989, the Assessing Officer has only power to reopen the assessment under section 147 provided that the Assessing Officer has reason to believe that income has escaped assessment and there is tangible material to come to the conclusion that there is escapement of income; mere change of opinion cannot per se be reason to reopen. 3.2. The learned Commissioner of Income-tax (Appeals) observed that after the introduction of changes with effect from April 1, 1989, the scope of reassessment was widened vis-a-vis the position of law as it stood earlier. After the amendment, the main restriction put in the section is reason to believe . The expression reason to believe refers to the belief which prompts the Assessing Officer to apply section 147 to a particular case ; that it will depend on the facts of each case ; that the belief must be of an honest and reasonable person, based on reasonable grounds ; that the Assessing Officer is required to ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent 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 materials facts necessary for his assessment, for that assessment year. (c) In the absence of any assertion/allegation to the effect that under assessment if any had occasioned by reason of any default on the part of the assessee, the reopening is bad in law. On the contrary the Assessing Officer comes to the conclusion that there is an underassessment only on the basis of the sale deeds that were produced in the course of the original assessment proceedings. (d) The Assessing Officer has referred to section 147(c)(i). Possibly he is referring to Explanation 2(c)(i) to section 147. Even assuming for a moment that there is income chargeable to tax has escaped assessment as mentioned in Explanation 2(c)(i) to section 147 ; still as per the proviso. . . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has sold four (4) flats during the year and there are total difference of ₹ 12,80,700 in sale consideration as per guideline value admitted in document. Therefore, as per section 50C of the Income- tax Act the difference should be assessed or in other words the guide line value as on the date of sale should be sale consideration. Further, as per the agreement entered into between the assessee and the purchaser in respect of sale of flats, the sale consideration works out to ₹ 28,02,720 but the assessee has offered only ₹ 21,51,415 therefore the difference of ₹ 6,50,305 has to be assessed as escaped assessment. 6.1 Admittedly in this case, the original assessment was completed under section 143(3) of the Act. It is a settled law that on the basis of material, prima facie, available before the Assessing Officer, opined that the income chargeable to tax has escaped assessment can be formed. The word reason in the phrase reason to believe would mean cause or justification. In case the Assessing Officer has a cause or justification to know or suppose that income has escaped assessment, action under section 148 can be taken. But obviously, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer clearly speak for the underassessment of tax hence, the conditions laid above stand fulfilled in so far as reassessment proceedings are concerned. In so far as the reasons recorded, extracted in the above portion of this order, we are satisfied that the Assessing Officer has reason to believe that income has escaped assessment. This fact confers jurisdiction on him to reopen the assessment. The power to reassess post-April 1, 1989 are much wider than these used to be before. But still the schematic interpretation of the words reason to believe failing which section 147 would give arbitrarily powers to the Assessing Officer to reopen the assessment on the basis of mere change of opinion, which cannot be, per se a reason to reopen the case. The Act has not given power to the Assessing Officer to review but has only given power to reassess. There is a conceptual difference between the two aspects as the Assessing Officer has no power at all to review the assessment. The reassessment, as stated above, has to be based on fulfilment of certain pre-conditions but the concept change of opinion has to be taken into consideration otherwise it may give unbridled power to an Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the Assessing Officer which the Assessing Officer could have uncovered but did not, then it is the duty of the assessee to bring it to the notice of the assessing authority. This omission or failure may be either deliberate, or even inadvertent, that is immaterial, but in case there is omission to disclose the material facts then subject to the other conditions jurisdiction to reopen is attracted. 6.4 In the present case, the assessee has shown the sale consideration of property lesser than the valuation considered for registration purposes. In our opinion, the provisions of the section 50C is applicable. As per Explanation 2 to section 147 it is very clear that due to disclose lower sale consideration by the assessee, the income chargeable to tax had escaped assessment. The assessee has not produced anything before the Commissioner of Income-tax (Appeals) to show as to how this fact was fully and truly disclosed before the assessing authority and that there was not failure on the part of the assessee, especially when provisions of the section 50C is applicable. Hence, the Commissioner of Income-tax (Appeals) considered the action of the Assessing Officer is fully covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of sale of undivided share of land at ₹ 22,79,700 as per guideline value under section 50C of the Act. The difference on this account was ₹ 12,80,700 and the same was brought to tax. Aggrieved, the assessee carried the appeal before the learned Commissioner of Income-tax (Appeals). 8.1 On appeal, the learned Commissioner of Income-tax (Appeals) observed that it is mandatory on the part of the Assessing Officer when the sale deed value shown by the assessee is less than the guideline value which was arrived at for the purpose of stamp valuation, the Assessing Officer is duty bound to adopt the same. According to learned Commissioner of Income-tax (Appeals), the Assessing Officer has rightly adopted the sale consideration of the property at section 50C value of the Act. Accordingly the ground of appeal on this issue is dismissed. Against this the assessee is in appeal before us. 9. Before us, the learned authorised representative argued that by virtue of a deed of partition entered into by the assessee with his partners on February 8, 1995, the assessee was allotted vacant land of an extent of 25,096 sq.ft in Madhavaram High Road, Sembiurn Village, Chennai. T ..... 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