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2021 (8) TMI 380 - HC - Income TaxReopening of assessment u/s 115WG - Fringe benefits escaping assessment - denial of natural justice - HELD THAT:- At the first instance, assessments are being made on the basis of the information provided by the assessee and thereafter, if the AO has reason to believe that any fringe benefits chargeable to tax escaped assessment, then he could reopen the assessment. It is not as if the AO is empowered to reopen the assessment, if he has the reason to believe. Even thereafter if any other fringe benefits escaped assessment is noticed during the course of proceedings under Section 115WG, then also he is empowered to proceed for assessment / reassessment and pass appropriate assessment/reassessment order. Whether opportunity to be provided for reopening of assessment under Section 147 of Income Tax Act, has to be extended to Section 115WG also? - Ground raised is that the impugned order contains additional material of reasons, which were not made available to the petitioner/assessee while communicating the reasons for initiating proceedings under Section 147 - The reasons furnished for reopening of assessment in proceeding dated 14.07.2016 states that any specified security or sweat equity shares (Section 115WB(1)(d) (Difference between the fair market value on the vesting date and amount recovered from or paid by the employee) and contribution to an approved superannuation fund for employees (in excess of one lakh rupees in respect to each) only a sum of ₹ 106,72,53,396/- was offered to FBT against the total amount of ₹ 243,69,22,379/- claimed as Stock Compensation Expenses in the previous year relevant to Asst Year 2010- 11. The subsequent paragraph would state that as such the under computation of fringe benefits to the extent of ₹ 136,96,68,983/- (₹ 243,69,22,379 – ₹ 106,72,53,396) in Asst Year 2009-10 is brought to notice. Typographical error committed by the Assessing Authority by not including the three lines, which was mentioned in the impugned order in the reasons furnished in the proceeding dated 14.07.2016, has not caused any prejudice to the interest of the petitioner/assessee and the subject was categorically dealt with by the Assessing Authority through out the proceedings and the petitioner/assessee also had the knowledge about the said facts and circumstances and raised objections. Even in cases where during the course of proceedings, if the Assessing Officer finds any other fringe benefits chargeable to tax, which had escaped assessment and which has come to his notice, shall also be assessed and appropriate orders shall be passed by the Authority. This being the scope of the reassessment proceedings contemplated u/s 115WG, the very ground raised that it is a 'change of opinion', cannot be accepted. The reasons were disclosed to the petitioner/assessee. The petitioner/assessee has responded to the reasons and the incompleteness of the reasons as stated by the petitioner/assessee is incorrect and certain typographical error would not constitute a ground for quashing the entire initiation of proceedings under Section 115WG. The reason for reopening as contemplated would not be construed as a 'change of opinion' and further the petitioner/assessee has to submit all the details for the purpose of completing the reassessment proceedings. Successive Assessing authority had taken a different stand is not accepted. The successive officer followed the proceedings only based on the reopening of the assessment initiated by the erstwhile officer by invoking Section 115WG and such continuation of the proceedings cannot be raised as a valid ground unless any malafide is established against any such officer. Audit objections cannot be a reason for reopening of assessment - This Court is of an opinion that Section 147, the conditions stipulated for reopening of assessment as well as the scope of Section 133A, unambiguously portray the powers of the authority to secure informations by conducting survey. Thus, such informations provided by way of audit objections, would be a cause for re-opening of assessment under Sections 147/148 of the Act, if the Assessing Authority is able to trace out certain materials, which were not adjudicated during the original assessment. The purpose of audit objection is to ensure the correctness of the procedures followed and the decisions taken in accordance with the provisions of the Income Tax Act. Thus, during the course of audit objections, if any materials are identified, undoubtedly, such materials shall be considered as a new material for the purpose of reopening of assessment. Each provision under Chapter XIV procedure cannot be separated as far as the Income Tax Act is concerned. Each Section has got linkage with one another as far as the procedures to be followed by the authorities competent are concerned as well as the rights of an assessee to defend their case. Thus, a balancing procedures as contemplated, are to be followed scrupulously by the competent authorities. Sources through which the materials are taken cannot be questioned by the assessee. Section 147/148 provides much wider scope for the purpose of reopening of the assessment. Thus, in the presence of any new materials made available then the Assessing Officer, is duty bound to exercise his power of reopening of assessment by following procedures contemplated. Thus, the very contention raised in this regard, does not merit consideration. This being the scope of the reopening proceedings under Section 115WG, the petitioner/assessee has to participate in the reopening proceedings by availing the opportunities to be provided for the purpose of completion of proceedings. The disputed facts raised by the petitioner/assessee need not be adjudicated by the writ Court under Article 226 of the Constitution of India. Such an adjudication has to be undertaken through original records and evidences made available.
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