TMI Blog2017 (6) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent. The counter affidavit filed in this Court, as well, does not shed any light on this aspect of the matter. Specific ground, i.e., ground No.VII, has been raised in that behalf by the petitioner. The respondent, in its counter affidavit, has not been able to refute this assertion of the petitioner. The respondent has violated the mandate of law, as enunciated by the Supreme Court in the matter of : GKN Driveshafts [2002 (11) TMI 7 - SUPREME Court] as clearly, expounds that once, notice under Section 148 of the Act is received by an Assessee, he is entitled to seek reasons for issuance of such notice, and that, the Assessing Officer is bound to furnish reasons within a reasonable time. The respondent's stand that reasons were communicated to the AR is, really, sidestepping the issue. For a moment even one were to accept the stand taken by the respondent that the petitioner was told that income received by him, upon the sale of Kovalam property would be treated as capital gains, because, the nature of the said land was not agricultural, in my view, would not suffice, as the reasons, which, the respondent was obliged to furnish, due to the mandate of law, would, ordinarily, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment had been issued after the expiry of four years from the end of the relevant AY, i.e, AY 2008-2009. 2. In so far as the first aspect of the matter is concerned, the petitioner seek to rely upon the judgment of the Supreme Court in the matter of : GKN Driveshafts (India) Limited Vs. Income Tax Officer, (2003) 1 SCC 72. 2.1. It is pertinent to note, at this stage, that it is the petitioner's case that change in opinion has occurred with respect to an immovable property located at Kovalam village, Thiruporur Taluk, Chengalpet District (for the sake of convenience hereafter referred to as Kovalam Property ). This property, evidently, at the relevant point in time, was held jointly by the petitioner, along with his sons; each having 1/3rd share in it. The said property was sold and, since, according to the petitioner, it was an agricultural land, it was not a capital asset, to which the provisions of the Act would apply, and hence, income derived upon its sale, was not included by him in his taxable income. 2.2. The record shows that a notice under Section 148 of the Act was issued to the petitioner on 30.03.2015, on the ground that income derived from the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 15900/-. The land was used for cultivating causina / teak. This land has been sold by a sale agreement and a power of attorney on 3/5/2007 for a consideration of ₹ 34,45,000/- (being 1/3rd share). The property/being an agricultural land and not coming under the purview of capital asset. The profit on sale of such land is away from the ambit of taxation. .... 6.4. As is obvious, the assessment order dated 30.11.2010, followed the letter dated 09.11.2010, whereby, inter alia, the aforementioned information was supplied by the petitioner qua the Kovalam property. 6.5. As indicated above, the respondent issued a notice dated 30.03.2015, under Section 148 of the Act, just before the period of limitation of six years was to expire. By this notice, the petitioner was called upon by the respondent to file a return, within thirty (30) days of its service, in the prescribed form, in respect of income, which, according to him, was assessable qua the AY. 6.6. The petitioner responded to the aforementioned notice, via a reply, which was received by the Department on 01.05.2015. The petitioner reiterated that to the best of his knowledge, no income had escaped assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale and in the period prior to the same is relevant, and not how it would be used after it was sold. It was submitted that while, the Revenue records may be form a good piece of evidence, such record could not help to determine the true character of the land, as it was not the conclusive evidence. Therefore, what was attempted to be emphasised was that, the parcel of land would still be agricultural land, if valuable plants, or crops, or trees planted on it are found, or, if, it was used for the purposes of husbandry. 7. The respondent, however, was not impressed with the submissions made by the petitioner, and thus, vide communication dated 04.02.2016, rejected the objections/ contentions raised by the petitioner. Pertinently, in the very same communication dated 04.02.2016, in so far as the objections raised by the petitioner with regard to the fact that no reasons were furnished, while issuing notice under Section 148 of the Act, the respondent had the following to state : .... The reasons for reopening were communicated to the AR of the assessee and subsequently, a notice u/s 143(2) was issued dated 30.10.2015 to continue with the scrutiny proceedings. .... 8. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioner, according to the learned counsel, had supplied all particulars pertaining to the Kovalam property. Furthermore, learned counsel emphasised the fact that the petitioner was only a 1/3rd owner of the Kovalam property, the other two being his sons. It was further averred that the Kovalam property, was also subject matter of an assessment order, passed under Section 143(3) of the Act vis-a-vis one of his sons, i.e. Mr.Mohammed Anas, despite which, no proceedings were initiated against him under Sections 147 and 148 of the Act, which was in stark contrast to the steps taken by the Revenue in the petitioner's case. The argument, being that the Revenue was not acting evenhandedly in so far as the petitioner was concerned. 9.2. It was further submitted by the learned counsel for the petitioner that there was no definition of agricultural land given in the Act, and that, only the definition of agricultural income under Section 2(1A) of the Act, indicated, as to what was meant by agricultural land. It was stated that the Act, specifically, excluded from the definition of capital asset (as contained in Section 2(14) of the Act), agricultural land, save and except land, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings under Section 147 and 148 of the Act had been rightly initiated and concluded via the impugned order. The emphasis laid by the learned counsel, was, on the fact that when assessment was carried out, the aspect pertaining to whether or not the subject land was an agricultural land was not considered. Attention, in this behalf, was drawn by Ms.Muralikrishnan to the response received by the respondent qua, the enquiries made from the Tahsildar, Thiruporur. Based on the communication dated 06.01.2016, addressed by the Tahsildar to the respondent, it was submitted that no agricultural activities had been carried out by the petitioner between 2003 and 2007, and therefore, the respondent had rightly concluded that the subject land was not an agricultural land. 10.2. In sum, it was the learned counsel's submission that this was not a case of change of opinion, since, no enquiry had been carried out, at a point in time, when, the original assessment order was passed and, therefore, the respondent was well within his power to pass a re-assessment order under Section 147 of the Act. 10.3. I must note herein that in the counter affidavit, the respondent relied upon the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stand that reasons were communicated to the AR is, really, sidestepping the issue. 13.2. For a moment even one were to accept the stand taken by the respondent that the petitioner was told that income received by him, upon the sale of Kovalam property would be treated as capital gains, because, the nature of the said land was not agricultural, in my view, would not suffice, as the reasons, which, the respondent was obliged to furnish, due to the mandate of law, would, ordinarily, have to state as to why he had proposed to treat the Kovalam property as non-agricultural land. 13.3. The purpose of furnishing reasons is to enable the Assessee to effectively meet the charge levelled against him. Therefore, in so far as this aspect is concerned, the submission advanced on behalf of the Revenue cannot be accepted. 14. In so far as the second aspect is concerned, the stand taken on behalf of the respondent is that no enquiry was caused, as regards the nature of the subject land, i.e., Kovalam property, when, the original assessment order was passed. As indicated in my narration above, while, concluding the assessment proceedings qua the petitioner under Section 143(3) of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ms.Muralikrishnan's submission that, since, there was no discussion qua the sale of the Kovalam property, in the assessment order dated 30.11.2010, the respondent, therefore, was not barred from reexamining the subject transaction, even though, the information with regard to the same, was available to him - in my view, is untenable proposition, in the given facts and circumstances. The record shows that query was raised, pursuant to which, information was supplied by the petitioner; a circumstance, which is, suggestive of the fact that an enquiry was made with regard to the subject transaction. 14.6. These facts would, clearly, bring the case within the four corners of the expression, change of opinion . In this behalf, I may only quote with profit the following observations made by the Full Bench of the Delhi High Court in CIT V. Usha International Limited, (2012) 348 ITR 485 (Del) : .... 57. Frankly, I am unable to see any difference between a case where a query is raised by the Assessing Officer which is replied to by the assessee with supporting evidence or material, but the opinion of the Assessing Officer on the assessee's reply is not recorded in the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation of opinion alone; it goes beyond that, and the substratum of the ruling is that the assessing officer cannot take advantage of the perfunctory manner in which he completed the assessment. This does not necessarily mean that wherever the assessing officer has completed the assessment under section 143(3) it must be taken as if he has discharged his duties in a perfunctory manner. The ratio of the judgment is rooted to the salutary principle that the assessees shall not be subjected to harassment if they have furnished full and true particulars at the time of the original assessment, which is what the Supreme Court observed in the judgment in Srikrishna Pvt. Ltd. (supra). It certainly does not imply that every assessment order passed under section 143(3) without an elaborate discussion of various contentions and claims put forth by the assessee is necessarily a wrong order to be corrected later by resorting to section147. Making an assessment to income tax represents the quantification of the charge to tax; it is a serious task. Legal consequences follow. A return of income is not a mere scrap of paper. It is to be treated with the respect it deserves. I think the real pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary to the mandate of law. 15.5. In so far as the judgment in the case of Sarifabibi Mohmed Ibrahim and Others V. CIT, 1993 Supp. (4) SCC 707, is concerned, it relates to the merit of the matter. The Revenue, in the first instance, would have to cross the threshold, which is, as whether or not it had jurisdiction to reopen the assessment proceedings. Once, that threshold is crossed, only then, can the Revenue embark upon the merits of the matter. Accordingly, this decision is also distinguishable. 16. For the very same reasons, the preliminary objection raised on behalf of the respondent that the writ petition is not maintainable, in view of alternative remedy being available to the petitioner cannot be sustained. 16.1. The respondent, clearly, acted beyond his jurisdiction in, firstly, triggering the proceedings under Section 147 of the Act; and secondly, in failing to act in accordance with the mandate of the law, as enunciated in GKN Driveshafts Limited case, which, willy nilly, required him to furnish reasons, to the petitioner. 17. Thus, for the foregoing reasons, I am inclined to set aside the impugned order. It is ordered accordingly. Resultantly, pending ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
