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2013 (6) TMI 575 - HC - Income TaxReopening of assessment - if the provisions of Sections 61 to 63 are attracted as has been claimed by the assessee, and the income of Rs.32.83 Crores which has been claimed by the assessee to be exempt is treated as exempt, in that event an alternate basis for taxing the income in the hands of the AOP of the contributories is sought to be set up - Held that:- There is no ambiguity whatsoever in the reasons which have been communicated to the assessee in the order dated 18 May 2012, but in the affidavit in reply, it has been stated that the income of Rs.32.83 Crores arising from the investment of contributions of the contributors to the Venture Capital Fund which has been claimed as exempt in the hands of the Petitioner should be assessed as income in the hands of the AOP of the contributors of the Petitioner “on a protective basis”. Again it has been stated that the issue of taxing the AOP of the contributors of the Petitioner “has arisen from the submission of the Petitioner before the appellate authorities” where the Petitioner has contended that the transactions amount to a revocable transfer and that the income which would arise should be taxed in the hands of the individual contributors. The reopening of an assessment under Section 148 on the basis of a submission which is raised before the appellate authority by the assessee is clearly impermissible because what Section 147 requires is a formation of a reason to believe by the AO. In the present case, there is clearly a want of compliance with the jurisdictional condition. AO has not formed a reason to believe that income has escaped assessment since the reopening is based purely on a contingency that may arise upon a particular outcome before the appellate tribunal. To accept the contention of the Revenue in the present case would be to allow a reopening of an assessment under Section 148 on the ground that the AO is of the opinion that a contingency may arise in future resulting an escapement of income. That would be wholly impermissible and would amount to a rewriting of the statutory provision. Thus setting aside the notice of reopening. In favour of assessee.
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