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Income Tax - Case Laws
Showing 181 to 200 of 7776 Records
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2021 (12) TMI 1133
Revision u/s 263 by CIT - receipt of share premium - As per CIT AO had failed to enquire into the veracity of the valuation report of shares furnished by the Chartered Accountant. It is a case of total lack of enquiry on the part of AO - distinction between “lack of enquiry” and “inadequate enquiry” - HELD THAT:- As specifically brought to the notice of the Assessing Officer that the appellant company issued 47850 preference shares of face value of ₹ 10 per share at premium to M/s. Kumar Sinew Developers Pvt. Ltd., a sister concern of the appellant and received a share premium - The appellant company also issued 1120 equity shares of face value of ₹ 10 per share to ICICI Asset Management Company Ltd. at a premium of ₹ 24,140/- per share and received share premium of ₹ 2,70,36,800/- and report of valuation of shares given by the Chartered Accountant was also furnished. In these circumstances, we do not agree with the ld. CIT-DR that no enquiry was made into the issue of receipt of share premium and the very fact that the Assessing Officer had called for report of valuation of shares given by Chartered Accountant goes to show that Assessing Officer had enquired and had gone into issues of applicability of provisions of section 56(2)(viib) .
In the present case, from the observation made by the ld. PCIT in 263 order, it is clear that had the ld. PCIT appraised the report of valuation of shares placed before the Assessing Officer, he would not have accepted the valuation report. This observation, in our considered opinion, cannot be accepted in view of the fact that the power of revision u/s 263 does not allow for supplanting or substituting the view of the Assessing Officer. The appreciation of material placed before the Assessing Officer is exclusively within his domain which cannot be interdicted by a superior officer while exercising powers u/s 263 of the Act on the ground that if he had appraised the said material, he would have come to a different conclusion in view of the law laid down by the Hon’ble Supreme Court in the case of Parashuram Pottery Works Co. Ltd.[1976 (11) TMI 1 - SUPREME COURT].
valuation of shares is a technical, complex problem, which should be left to the consideration of expert in the field and is surrounded by a number of myths and is not an exact science and is driven, inter-alia, by the purpose of valuation, statutory requirements, business factors, etc.. Valuation, in practice, is guided by a number of approaches as suitably adjusted for subjective circumstances. The report of an expert can be found fault by another expert in the field. Neither the Assessing Officer nor the Commissioner is competent to examine the veracity or the completeness of the valuation report given by an expert. The ld. PCIT cannot come to the conclusion that the report of valuation of shares is unacceptable in the absence of report from another expert. The material on record does not suggest any error in the methodology adopted in the report.
The power of revision cannot be exercised to set-aside the assessment order to enable Assessing Officer to conduct another fruitless enquiry to reach the same result which was arrived at earlier, even if the enquiries held that it would be empty formatting as the shares were also issued to unrelated parties i.e. 1120 equity shares of face value of ₹ 10 per share to ICICI Asset Management Company Ltd. at a premium of ₹ 24,140/- as held in the case of CIT vs. Sakthi Charities [2000 (2) TMI 75 - MADRAS HIGH COURT] - Assessee appeal allowed.
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2021 (12) TMI 1132
Delayed employee's contribution to provident fund - assessee argued contribution been paid before filing of the return.paid before filing of the return - Scope of amendment - HELD THAT:- We find that the issue is covered in favour of the assessee as the assessment year involved is AY 2017-18 and the Explanation-5 inserted by Finance Act, 2021 to section 43B w.e.f. 01.04.2021 is not applicable to the assessment year under consideration.
See HARENDRA NATH BISWAS VERSUS DCIT, CIRCLE-29 KOLKATA [2021 (7) TMI 942 - ITAT KOLKATA] wherein held that we do not accept the Ld. CIT(A)'s stand denying the claim of assessee since assessee delayed the employees contribution of EPF & ESI fund and as per the binding decision of the Hon'ble High Court in Vijayshree Ltd. [2011 (9) TMI 30 - CALCUTTA HIGH COURT] of the Act since assessee had deposited the employees contribution before filing of Return of Income. Therefore, the assessee succeeds and we allow the appeal of the assessee.
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2021 (12) TMI 1131
Late deposit of employees share of PF & ESI which were deposited after the due date but before the due date of filing of return of income - AO made the additions of the impugned amounts for the reasons that the assessee did not deposit the amounts of employees contribution as per the provisions of section 36(1)(va) - HELD THAT:- As decided in RAJA RAM VERSUS THE ITO, WARD 3 AND SANCHI MANAGEMENT SERVICES PRIVATE LIMITED VERSUS THE ITO, WARD 5 (2) , CHANDIGARH [2021 (11) TMI 370 - ITAT CHANDIGARH] assessee deposited the contribution of PF & ESI belated in terms of section 36(1)(va) of the Act, however, the said deposits were made prior to filing of return of income u/s 139(1).
Impugned additions made by the Assessing Officer and sustained by the Ld. CIT(A) on account of deposits of employees contribution of ESI & PF prior to filing of the return of income u/s 139(1) of the Act, in both the years under consideration prior to the amendment made by the Finance Act, 2021 w.e.f. 1.4.2021 vide Explanation 5, are deleted. - Decided in favour of assessee
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2021 (12) TMI 1130
Claim of balance additional depreciation on the assets which were put to use in earlier year - Number of days asset put to use - whether machinery is put to use for less than 180 days ? - Scope of amended provision of section 32(1) - HELD THAT:- As decided in M/S RITTAL INDIA PVT. LTD. (NO. 1) [2016 (1) TMI 81 - KARNATAKA HIGH COURT] only 50% of the allowable depreciation i.e. sum equal to 10% of the actual cost of the plant and machinery is allowed because of the fact that the machinery is put to use for less than 180 days in that financial year, this would necessarily mean that the balance 10% additional depreciation can be availed in the subsequent assessment year, otherwise the very purpose of insertion of Clause (iia) would be defeated - beneficial legislation should be given liberal interpretation and that since the additional depreciation is a one-time benefit to encourage industrialization and therefore, the beneficial provision has to be construed reasonably, liberally and purposively to make it meaningful while granting additional allowance.
Even in the Explanatory Notes to the Provisions of the Finance Act 2 issued by the CBDT, in Para 13.2 of the said Notes, it has been mentioned that the aforesaid amendment of providing balance of additional depreciation in the immediately succeeding year has been brought to remove discrimination in the manner of allowing additional depreciation on plant or machinery used for less than 180 days in the preceding year. The very objective of insertion of a new proviso to section 32(1) is that to remove discrimination and therefore it can be safely said that the same is just a curative amendment. Even there is no provision u/s. 32(1) prohibiting the balance additional depreciation in the succeeding year. - Decided against revenue.
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2021 (12) TMI 1129
Late deposit of employees share of PF & ESI which were deposited after the due date but before the due date of filing of return of income - AO made the additions of the impugned amounts for the reasons that the assessee did not deposit the amounts of employees contribution as per the provisions of section 36(1)(va) - HELD THAT:- As decided in RAJA RAM VERSUS THE ITO, WARD 3 AND SANCHI MANAGEMENT SERVICES PRIVATE LIMITED VERSUS THE ITO, WARD 5 (2) , CHANDIGARH [2021 (11) TMI 370 - ITAT CHANDIGARH] assessee deposited the contribution of PF & ESI belated in terms of section 36(1)(va) of the Act, however, the said deposits were made prior to filing of return of income u/s 139(1).
Impugned additions made by the Assessing Officer and sustained by the Ld. CIT(A) on account of deposits of employees contribution of ESI & PF prior to filing of the return of income u/s 139(1) of the Act, in both the years under consideration prior to the amendment made by the Finance Act, 2021 w.e.f. 1.4.2021 vide Explanation 5, are deleted. - Decided in favour of assessee
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2021 (12) TMI 1128
Delay in depositing the employee’s contribution towards PF/ESI - same stands duly deposited before the due date of filing the return of income u/s 139(1) of the Act - scope of amendment - HELD THAT:- We find that this tribunal in the case of Nipun Jain [2021 (12) TMI 1042 - ITAT AMRITSAR] has deleted the said disallowance on observing that the alleged amount of employee’s contribution PF and ESI has been deposited befor the due date of filing return of income prescribed u/s 139(1) - also there is no doubt qua applicability of the amended provisions referred above, prospectively ad second aspect as considered/determined by the ld. CIT(A) qua retrospective application of the amended provisions of Section 36(1)(va) and 43B of the Act wherein Explanations have been inserted by Finance Act, 2021 qua employees’ share in respect of PF & ESI Act, is also unsustainable - Decided in favour of assessee.
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2021 (12) TMI 1127
Reopening of assessment u/s 147 - eligibility of reasons to believe - "reason to suspect" OR "reason to believe" - HELD THAT:- As in the reasons recorded, there is no allegation that there was any failure on the part of the assessee in not disclosing truly and fully material facts necessary for assessment. Under the circumstances, the assumption of the jurisdiction to reopen the assessment beyond the period of four years in exercise of powers u/s 147 of the Act is bad in law and contrary to the provisions of section 147 of the Act. Under the circumstances, on the aforesaid ground alone, the impugned reassessment proceedings deserve to be quashed and set aside. See SHRI NISHANTKANTILAL PATEL, SMT MUKTABEN NISHANTBHAI PATEL VERSUS INCOME TAX OFFICER, WARD-2 (2) , BHARUCH [2021 (2) TMI 531 - ITAT SURAT]
The reasons for the formation of the belief must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income-tax Officer and the formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year. It is no doubt true that the court cannot go into the sufficiency or adequacy of the material and substitute its own opinion for that of the Income-tax Officer on the point as to whether action should be initiated for reopening assessment. The reason for the formation of the belief must be held in good faith and should not be a mere pretence. From our above analysis of reasons recorded in the assessee`s case under consideration, we note that the reasons recorded by the assessing officer falls in the zone of "reason to suspect" and not "reason to believe", therefore we quash the reassessment proceedings. - Decided in favour of assessee.
Addition u/s 68 - Bogus share transactions - penny stock purchases - HELD THAT:- We find that there is absolutely no adverse material to implicate the assessee to the entire gamut of unfounded/unwarranted allegations leveled by the AO against the assessee, which in our considered opinion has no legs to stand and therefore has to fall. We take note that ld. DR could not controvert the facts which are supported with material evidences furnished by the assessee. We note that the allegations that the assessee/brokers got involved in price rigging/manipulation of shares must therefore consequently fail. At the cost of repetition, we note that the assessee had furnished all relevant evidences in the form of bills, contract notes, demat statement and bank account to prove the genuineness of the transactions relevant to the purchase and sale of shares resulting in long term capital gain. Neither these evidences were found by the AO nor by the ld. CIT(A) to be false or fictitious or bogus. The facts of the case and the evidences clearly support the claim of the assessee that the transactions of the assessee were genuine and the authorities below was not justified in rejecting the claim of the assessee exempted u/s 10(38) of the Act on the basis of suspicion, surmises and conjectures. It is to be kept in mind that suspicion how so ever strong, cannot partake the character of legal evidence.
CIT(A) was not justified in upholding the addition of sale proceeds of the shares as undisclosed income of the assessee u/s 68 of the Act. We therefore delete the addition - Decided in favour of assessee.
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2021 (12) TMI 1126
Reopening of assessment u/s 147 - Valid jurisdiction of ITO Ghaziabad to issue notice - Successor AO power in issuing the notice - AO recorded reasons for reassessment is different from AO who issued a notice u/s 148 - whether the reassessment framed by the AO i.e ITO, Hapur in pursuance to a notice dated 31.03.2016 u/s 148 of the Act, issued by Income-tax Officer, Ghaziabad who did not have jurisdiction over the case of the assessee, is valid one? - HELD THAT:- In the present case, it is an undisputed fact that Assessee is filing the return of income before ITO, Hapur and the ITO, Hapur had jurisdiction over the assessee. The ITO, Ghaziabad who did not have jurisdiction over the assessee, issued a notice u/s 148 of the Act on the basis of AIR/NMS information about cash deposits by the Assessee. Subsequently, ITO Ghaziabad vide letter dated 25.07.2016 transferred the records to ITO, Hapur as the jurisdiction over the assessee was with ITO, Hapur. Thereafter, ITO, Hapur proceeded to complete the assessment without even recording reasons to believe stipulated in section 147 or issuing any notice u/s 148 of the Act and continued the proceedings u/s 148 of the Act and passed order u/s 143(3) r.w.s 147 vide order dated 31.08.2016 on the basis of reasons recorded by ITO, Ghaziabad.
Hon’ble Gujarat High Court in the case of Hynoup Food & Oil Industries Ltd. vs. ACIT [2008 (7) TMI 192 - GUJARAT HIGH COURT] has observed that AO recorded reasons for reassessment and AO issued a notice u/s 148 of the Act must be the same person. Successor AO cannot issue notice u/s 148 on the basis of reasons recorded by predecessor AO - in view of the well-settled principle that if a notice under section 148 of the Act has been issued without the jurisdictional foundation u/s 147 of the Act being available to the AO, the notice and the subsequent proceedings will be without jurisdiction and thus, liable to be struck down. - Decided in favour of assessee.
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2021 (12) TMI 1125
Exemption u/s 11 - As per AO activities carried out by the assessee company are in the nature of ‘advancement of other general public utility’ in the nature of trade/commerce/business and therefore, the activities carried out by the assessee cannot be reckoned as attributable to ‘charitable purpose’ within the meaning to Section 2(15) - HELD THAT:- The Coordinate Bench in assessee’s own case for A.Y. 2009-10 to 2011-12 held that the assessee company cannot be said to be conducting affairs solely on commercial lines with a motive to earn profit and consequently proviso to Section 2(15) of the Act does not trigger in the case of the assessee. Such view of the Coordinate Bench has been ultimately affirmed by the Hon’ble Jurisdictional High Court in the case of CIT vs. Gujarat Industrial Development Corporation [2017 (7) TMI 811 - GUJARAT HIGH COURT] - as assessee was not involved in the activities in the spirit of commercial accommodation and therefore falls within the ambit of definition of ‘charitable purpose’ contemplated under s.2(15) of the Act. In view ofthe foregoing, we find that the relief sought by the assessee to the extent that the activities carried on by the assessee should be recognized to be of charitable nature requires to be endorsed. - Decided in favour of assessee.
Addition on account of deemed rent - deemed rent from various fact/unoccupied plots/shade added to the total income of the assessee - HELD THAT:- Considering the entire aspect of the matter we find that when the appellant has an exempt entity Chapter-3 of the matter would be applicable in its case and not the provision of Chapter-4 of the Act. Therefore, the addition of deemed rent would fall under the head income from house property under Chapter-4 of the Act and therefore, the addition is not sustainable. Considering this aspect the order passed by the Ld. CIT(A) in deleting addition in our considered view is just and proper and so as to warrant interference.
Depreciation as per normal commercial principles and rule of accountancy - AO is required to re-examine the issue afresh in accordance with law considering the assessee as a Charitable Institution.
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2021 (12) TMI 1124
Set off of MAT credit u/s.115JAA of brought forward from earlier years against tax on total income including surcharge and education cess instead of adjusting the same from tax on total income before charging such surcharge and education cess - HELD THAT:- We find that this issue is no longer res integra in view of the decision of the Hon’ble Calcutta High Court in the case of SREI Infrastructure Finance Ltd.,[2016 (8) TMI 967 - CALCUTTA HIGH COURT] and CIT vs. Vacment India [2014 (10) TMI 787 - ALLAHABAD HIGH COURT] wherein it was categorically held that surcharge and education cess are part of income tax. These High Court decisions were followed by series of the Tribunal decisions across the country and hence, this issue is no longer res integra. Respectfully following the aforesaid decisions, we hold that for the purpose of MAT credit to be carried forward to subsequent years, tax portion should include surcharge and education cess. Respectfully following the same, we do not find any infirmity in the order of the ld. CIT(A granting relief to the assessee. Accordingly, the grounds raised by the Revenue are dismissed.
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2021 (12) TMI 1123
Depreciation on purchase of trademark - main argument of the ld.AR is that consideration paid is only related to the trademark for ‘Jealous’ and it has not related to other trademarks viz., ‘Analyse’, Detour’ & ‘JLS’ - HELD THAT:- we find that the agreement entered for acquisition of four trademarks and not for one trademark. Being so, we are not in agreement with the arguments of the assessee’s counsel.
Depreciation disallowed on the reason that 4 trademarks have been included in the block of assets are not put to use - It is not the case of the AO that the assets were not put to use at all. The contention of the ld.DR is that only the brand ‘Jealous’ was put to use in the asst. year under consideration, as such, only this brand is entitled for depreciation and not other 3 brands. All these 4 brands falling under one block of assets and even one of the brads is put to use, it is not possible to restrict the depreciation on the said brand only by stating that a portion of block assets only has been put to use.
In our opinion, in relation to block of assets, it is not possible to segregate the each trademark from the block for the purposes of granting depreciation and thereby restricting the claim thereof. Once it is found that the assets are used for business purpose out of particular block, it is not necessary that all the item falling within that block have to be simultaneously used for being entitled to depreciation . In view of this, we are of the opinion that lower authorities are not justified in rejecting the claim of depreciation on the block of these assets and the assessee to be granted depreciation at the prescribed rate for this block of assets. Accordingly, we allow this ground of appeal of the assessee.
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2021 (12) TMI 1096
Validity of reopening of assessment u/s 147 - reassessment argued on non application of mind while granting the sanction under Section 151 of the Act and facts as recorded in the reasons are not correct - HELD THAT:- We are of the view that even in cases where the return of income has been accepted by processing u/s 143(1) of the Act, reopening of an assessment can only be done when the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment. The mere fact that the return has been processed under Section 143(1) of the Act, does not give the AO a carte blanche to issue a reopening notice.
Condition precedent of reason to believe that income chargeable to tax has escaped assessment on correct facts, must be satisfied by the Assessing Officer so as to have jurisdiction to issue the reopening notice. In the present case, the Assessing Officer has proceeded on fundamentally wrong facts to come to the reasonable belief/conclusion that income chargeable to tax has escaped assessment. Further, even when the same is pointed out by the Petitioner, the AO in his order disposing of the objection does not deal with factual position asserted by the Petitioner. Thus, it would be safe to conclude that the Revenue does not dispute the facts stated by the Petitioner. On the facts as found, there could be no reason for the AO to believe that income chargeable to tax has escaped assessment.
It is settled law as held by the Division Bench of this court in German Remedies Ltd. vs. Deputy Commissioner of Income Tax [2005 (10) TMI 76 - BOMBAY HIGH COURT] that while granting approval it was obligatory on the part of the Principal Commissioner of Income Tax to verify whether there was any failure on the part of the assessee to disclose full and true relevant facts in the return of income filed for the assessment of income of that assessment order. The impugned notice and consequential order justifying reasons recorded are unsustainable
The impugned notice and consequential order justifying reasons recorded are unsustainable - Decided in favour of assessee.
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2021 (12) TMI 1095
Application u/s 197 - withholding tax at source - TDS u/s 195 of the Act @4% keeping in the interest of Revenue - application for NIL deduction directing the customers of the Petitioner to withhold tax @ 10% is arbitrary and no reason has been given in the order for arriving at such a conclusion - HELD THAT:- As directed to deduct TDS @ 10% on the entire amount. There is no reasoning as to how the rate finally granted has been arrived at.
The Impugned Order does not take into account the impact, if any, of the amendment carried out to section 10(50) of the Act by Finance Act 2021 w.e.f. 01-04-2021. The said amendment states that the amounts taxable as royalty/fees for technical services under the Act read with section 90/90A of the relevant double taxation avoidance agreement [DTAA] will not be exigible for being considered for the charge of Equalisation Levy.
Petitioner in its application for certificate under section 197 dated 23.09.2021 describes itself as an e-platform operator. In the later part of the same application the petitioner claims itself to be a university for the purposes of article 12(5)(c) of the DTAA between India and United States of America. The AO, in the Impugned Order holds the Petitioner is not eligible for the benefit of article 12(5) (c) of the DTAA. However, the Impugned Order does not contain any reasoning or discussion on the applicability or otherwise of various sub-articles of the DTAA to the fact situation of the case.
Consequently, the impugned order dated 27.09.2021 is hereby set aside with a direction to the Respondent No. 1 to pass a de novo reasoned order after taking into account the amendments made to the provisions of section 10(50) of the Act w.e.f. 01.04.2021 i.e. to exclude the receipts of the Petitioner which is subject to withholding tax at source to the extent such receipts are exigible to Equalisation Levy within a period of 4 weeks after granting opportunity of being heard to the petitioner. It will be incumbent upon the petitioner to furnish to the Assessing Officer the information required by the Assessing Officer expeditiously
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2021 (12) TMI 1094
Levy of penalty u/s 271(1)(c) - defective notice - unexplained cash - as argued assessee had offered income in order to buy peace and avoid litigation even though no such income is assessable at the hands of assessee - HELD THAT:- Issuance of such show cause notice without specifying as to whether the Assessee had concealed particulars of his income or had furnished inaccurate particulars of the same has resulted in vitiating the show cause notice. Heavy reliance was placed by the learned counsel for the Revenue on the decision in Mak Data Private Limited [2013 (11) TMI 14 - SUPREME COURT] to urge that the penalty contemplated by Section 271 (1) (c) of the said Act was in the nature of civil liability and mens rea was not essential therein.
The Full Bench having considered these decisions and having answered the question as regards defect in the notice under Section 271(1)(c) of the said Act resulting in vitiating the penalty proceedings, we find ourselves bound by the answers given by the Full Bench. It would not be permissible for us to disregard this aspect and take a different view of the matter. Accordingly substantial question of law no. III is answered by holding that since the show cause notice dated 12.02.2008 does not indicate whether there was concealment of particulars of income or furnishing of incorrect particulars of such income, the same would vitiate the penalty proceedings.
Since it has been found that the show cause notice dated 12.02.2008 that was issued to the Assessee was vague and the penalty proceedings initiated on that basis were vitiated, it would not be necessary to answer substantial questions of law as framed at serial nos. I and II. This is for the reason that the said substantial questions pertain to the merits of the adjudication of the proceedings under Section 271(1)(c) - Once it is found that the show cause notice dated 12.02.2008 issued to the Assessee was not in accordance with law, the orders passed thereon would automatic cease to operate. - Decided in favour of assessee.
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2021 (12) TMI 1093
Reopening of assessment u/s 147 - net loss of cancellation of forward contract - HELD THAT:- At Schedule 31 in profit and loss account shows a figure of ₹ 1070.42 Lakhs as 'net loss of cancellation of forward contract'. Note 40 which forms part of financial statement also mentions about company entering into derivative contract in the nature of forward contract etc. and the company does not use foreign exchange contract for speculative purpose. All these details were available before the AO who passed the Assessment Order dated 28/03/2015. Between the date of order of assessment sought to be re-opened and the date of formation of opinion by the Assessing Officer, nothing new has happened. It is merely a fresh application of mind by a different AO to the same set of facts.
When the primary facts necessary for assessment are fully and truly disclosed, the AO is not entitled on change of opinion to commence proceedings for reassessment. Even if the AO, who passed the assessment order, may have raised too many legal inferences from the facts disclosed, on that account the AO, who has decided to reopen assessment, is not competent to reopen assessment proceedings. Where on consideration of material on record, one view is conclusively taken by the AO it would not be open to reopen the assessment based on the vary same material with a view to take another view. - Decided in favour of assessee.
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2021 (12) TMI 1092
Reopening of assessment u/s 147 - Reason to believe - loan given by Petitioner to its foreign subsidiary at 11% p.a. rate of interest and claim of depreciation of goodwill from an amalgamating company - HELD THAT:- As loan given by Petitioner to its foreign subsidiary at 11% p.a. rate of interest and claim of depreciation of goodwill from an amalgamating company. Both these details were made available to the Assessing Officer who had passed the order of assessment sough to be re-opened.
As regards loan to a subsidiary, during the assessment proceedings, a letter dated 07/10/2016 was addressed by Petitioners’ Chartered Accountant to the Assessing Officer where the details of the loan given to its overseas subsidiary and rate of interest charged have been provided.
Petitioner, in its statement giving details of disallowances made, also has stated that for AY 2012-13 and AY 2013-14, there was disallowance on account of depreciation of goodwill. Notwithstanding that the Assessing Officer has allowed depreciation of goodwill for AY 2014-15. As held by Apex Court in the case of Indian & Eastern Newspaper Society, New Delhi Vs. Commissioner of Income Tax, New Delhi [1979 (8) TMI 1 - SUPREME COURT] even if it is an error that the Assessing Officer discovered, still an error discovered on a re-consideration of the same material does not given him power to re-open. When the primary facts necessary for assessment are fully and truly disclosed, the Assessing Officer is not entitled on change of opinion to commence proceedings for reassessment.
Even if the AO, who passed the assessment order, may have raised too many legal inferences from the facts disclosed, on that account the AO, who has decided to reopen assessment, is not competent to reopen assessment proceedings. Where on consideration of material on record, one view is conclusively taken by the Assessing Officer, it would not be open to reopen the assessment based on the vary same material with a view to take another view.
In the circumstances, we are satisfied it is nothing but change of opinion. - Decided in favour of assessee.
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2021 (12) TMI 1091
Reopening of assessment u/s 147 - validity of grant of sanction u/s 151 - HELD THAT:- It is clear from the digital signature on the notice issued by Respondent No.1 that the notice was issued at 2.40 p.m. on 31/03/2019. The sanction by the authority under Section 151 was digitally signed at 2.55 p.m. on 31/03/2019. The explanation furnished by Respondent No. 1 in the order of disposing of objections that initially physical approval was granted and thereafter online approval was granted has not been supported by any material on record. We fail to understand the need to grant online approval at 2.55 p.m. if physical approval was already granted before 2.40 p.m. In the absence of valid explanation by cogent material, we cannot accept explanation by Respondent No.1 in the order of disposing of objections that physical approval was granted before issuance of notice u/s 148.
There is complete non application of mind on the part of Joint CIT, Range 5(3), Mumbai, while granting sanction under section 151 of Act. There is no prior sanction granted by Respondent No.2 before issuance of notice under Section 148 of the Act. Therefore, the jurisdictional condition of complying with Section 151 was not satisfied, resulting in Respondent No.1 committing the error of jurisdiction by issuing notice under Section 148 of the Act calling for interference under Article 226 of the Constitution of India.
There is complete non application of mind on the part of Joint CIT, Range 5(3), Mumbai, while granting sanction under section 151 of Act. There is no prior sanction granted by Respondent No.2 before issuance of notice under Section 148 of the Act. Therefore, the jurisdictional condition of complying with Section 151 was not satisfied, resulting in Respondent No.1 committing the error of jurisdiction by issuing notice under Section 148 of the Act calling for interference under Article 226 of the Constitution of India.
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2021 (12) TMI 1090
Reopening of assessment u/s 147 - Notice issued after the expiry of four years - addition u/s 14A - HELD THAT:- No indication that there was any failure on the part of petitioner to truly and fully disclose any material fact. Simply using the words "as there is a failure on part of assessee to disclose fully and truly all material facts necessary for its assessment during the year under consideration" would not help. These are nothing but bald averments. A failure has to be spelt out in the reasons recorded. Respondents have failed in that.
The entire basis for reopening is that provisions of Section 14A and Rule 8D with regard to dividend income was attracted but while completing the scrutiny assessment no mention is made for the same. During the assessment proceedings, after petitioner filed its revised return of income on 29th March 2014, respondent no.1 issued notice under Section 142(1) of the said Act on 17th September 2014. Among other queries, respondent no.1 specifically inquired about the details of dividend income earned and computation of expenses incurred on earning this income as per the provisions of Rule 8D. Petitioner, in its reply dated 24th September 2014 to the notice issued under Section 142(1) of the said Act, has specifically addressed the query with regard to dividend income. Petitioner has stated that the amount of dividend income is exempt so it is not included in computation as taxable income. As far as Rule 8D was concerned, petitioner has submitted that the company is taxable as per the tonnage tax scheme and thereby, it is not claiming any expenditure, viz.-aviz., the exempt income and hence, Rule 8D was not applicable.
After considering these submissions of petitioner, the original assessment order under Section 143(3) of the said Act was passed on 28th January 2015. Respondent no.1 has, therefore, applied his mind with regard to petitioner's dividend income while passing the assessment order under Section 143(3) for Assessment Year 2012-2013. We find that the notice has been issued without proper jurisdiction. It is not permissible for respondents to change its opinion based on the same set of facts. In our view, this petition has to be allowed and is hereby allowed - Decided in favour of assessee.
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2021 (12) TMI 1089
Petition under the Direct Tax Vivad Se Vishwas Act, 2020 (the DTVSV Act) - time limit for filing the appeal - appeals which have been filed before the ITAT on behalf of deceased Kalyanji Bhaga - HELD THAT:- Revenue is not denying the fact that the task force was created on two occasions and notwithstanding the appointment of task force, petitioner’s were not able to get documents on time because of various organisational changes in the department. In the reply it is stated that in the absence of any material or documents in the Writ Petition, no credence could be given to the averment that the Task Force apparently constituted in the course of recovery proceedings appointed by Respondent No.2 could not provide a copy of the order passed by CIT (A) in September, 2011. Certainly, if only the affiant had gone through the files, he would have noted the notings in the file and he could have filed copy of the notings or the order sheets in the file, if according to him petitioner’s averment in the petition was not correct. Respondents cannot simply skirt their responsibility by putting onus on petitioner to provide some documents constituting the task force.
Therefore, from the facts as narrated above, we find that the time for filing the appeals against the order of CIT (A) had not expired as on the date of filing the declaration.
The rejection of the declaration by petitioner under the DTVSV Act is not correct.
We hope the authorities will keep in mind the objective of the DTVSV Act, which is the Act to provide for resolution of disputed tax and for matters concluded there with or incidental thereto. Here is the legal heir who wants to put an end or wants of closure to all the disputes between the deceased Kalyanji Bhagat who was his father and the tax authorities. We fail to understand why Revenue is rejecting these declarations without properly considering the facts and circumstances of the case.
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2021 (12) TMI 1088
Interest charged u/s 220 - Settlement Commission order under Section 245D(4) - HELD THAT:- The effect of the first proviso to sub-Section (2) to Section 220 will be that the amount on which the interest is payable under sub-Section (2) of Section 220 will get modified according to the Appellate order. As seen from the proviso to sub-Section (2) of Section 220, there can be variation in charging interest if ultimately due to the result of Appellate order, the liability to pay the original amount on which interest is levied under Section 220 ceases, accordingly, the Assessee needs to be given the benefit of reduction in interest resulting in reduced payment of interest.
In the facts of the present case, CIT(A)(VI), Bombay, by order dated 30/03/1995, directed the Assessing Officer to withdraw the investment allowance granted under Section 32A of the Act. Accordingly, demand notice under Section 156 of the Act came to be issued to Respondent No.1. The said amount of interest on investment allowance under Section 32A was directed to be waived by order dated 05/06/1998 by the Settlement Commission. Petitioners therefore filed an application for recalling the order dated 05/06/1998, which by the impugned order was rejected.
The issue involved in the present Petition is restricted only to the liability of Respondent No.1 to pay interest under Section 220 of the Act on the amount of set off of brought forward investment allowance.
As per proviso to sub-Section (2) of Section 220 of the Act, once the amount on which interest was charged gets extinguished, consequently the liability of Respondent No.1 to pay interest on said amount will also be extinguished.
Mr. Walve is right in submitting that as per Section 245(i) of the Act, the order passed by Settlement Commission is conclusive and binding on all authorities under the Act. But in our opinion, it is not necessary to go into said issue, since the result of the order passed is to extinguish the liability of Respondent No.1 to pay the amount on which the interest was charged under Section 220 of the Act, interference under Article 226 which is discretionary, would result into the revival of illegality.
We are therefore of the view that interference by this Court in the present Writ Petition would result in direction to Respondent No.1 to pay interest on an amount which had been extinguished due to the Judgment and consequently will result into miscarriage of justice. The power under Article 226 needs to be exercised to prevent miscarriage of justice. It will be exercised only in furtherance of interest of justice and not merely on the making out of a legal point.
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