TMI Blog2014 (5) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... ely wishes- in either case, his persistence with reassessment proceedings being devoid of any legal sanction - Such insistence - one may even add obdurate insistence- is the hallmark of whimsicality and a far cry from the reasonable basis for exercise of power u/s 147/148 which the court would be bound to uphold. All the facts were revealed to the AO - He made no attempt to say that the materials revealed were false, or incomplete, there was no material, save an unsubstantiated allegation by the complainant that the assessee had acquired the property and concealed all facts relating to it, during the assessment year – thus, the AO had acted unreasonably in persisting with the reassessment notice, which also could not be said to have been based on tangible material, given the statement of Shri Khanna and lack of any tangible material supporting the allegations - Sustaining the notice and reassessment proceedings would amount to condoning what is clearly oppression and harassment – the notice for reassessment and proceedings are set aside – Decided in favour of Assessee. - W. P. (C) 272/2013 & CM APPL. 560/2013 - - - Dated:- 4-3-2014 - S. Ravindra Bhat And R. V. Easwar,JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 -2005 relevant to A.Y. 2005-2006 and the value of the property was alleged to be in the region of 8-10 crores. It was alleged by the complainant that the assessee has made investment in the said property out of his undisclosed income and has not disclosed the investment and corresponding income of that transaction in his returns of income of the relevant assessment year and to that extent there was concealment of income and evasion of tax by the assessee for A.Y 2005-2006 relevant for F.Y. 2004-2005. Perusal of the returns of income of the assessee for A.Y. 2005-2006 as filed by it show that no disclosure is made by the assessee about its linkage with the said property for the source of the same or the source of the investment in that property or the status of the property in the hands of the assessee as also in what capacity and for what authority, the assessee was using that property as his residence. It was informed by the complainant that the assessee has filed an affidavit before the Hon ble High Court CWP No. 6274 of 2008 titled Sh. S.K. Srivastava Vs. CVC others wherein he has given property No. D-877, IInd Floor, New Friends Colony, New Delhi - 110 065 as his address ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co-operative Housing Society, Sector - Omega, Greater Noida, Uttar Pradesh at a cost of about Rs.1.50 crores. Perusal of the return of income does not disclose any investment in the property at Greater Noida. The alleged investment in the property exceeds the limit prescribed in section 147 for assumption of jurisdiction U/s 147. It is therefore considered to be a fit case for initiation of proceedings U/s 147/148 of the Income Tax Act, 1961 on this ground as well. 4. The petitioner objected to assumption of jurisdiction under Section 147/148, stating that the reasons so recorded were factually incorrect and could not be construed as legitimate grounds for reopening the reassessment. It was also urged that the materials could not be said to constitute fresh or tangible admissible evidence within the meaning of that expression. Apparently, prior to the assumption of jurisdiction in respect of one of the items, i.e. the New Friends Colony property, the statement had been recorded of one Mr. K.K. Khanna. The said Mr. Khanna was shown to be the owner of the property. It was urged that the materials on record in the form of Mr. K.K. Khanna s affidavit and deposition clearly demonstr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in his name for that period; it could not point to ownership of the entire property. There was in fact absolutely no material to substantiate the continuance of the proceedings based upon the tax evasion Petition. 7. Learned counsel argued that so far as the second allegations with respect to construction of the Green Woods, Greater Noida property goes, the plot was allotted to the petitioner in 1997. Possession of the plot was taken on 21.04.2000. It was further argued that a membership agreement was entered into between the petitioner and the Green Woods Government Officers Welfare Society (GWGOWS, i.e the society ); copies of these were placed on record and also made available to the Revenue. Learned counsel emphasized that investment in the property was made by the petitioner partly out of the final withdrawal from the General Provident Fund (GPF) Account on 09.05.1997 and partly out of the loan arranged by the society from the Housing Development Finance Corporation (HDFC) through a loan agreement of 27.01.1998. The loan amount was directly disbursed by the HDFC to the society on demands being issued by the latter. In these circumstances, stated counsel, during the conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to form the opinion that reassessment is warranted. It was submitted that even though the Supreme Court in G.K.N. Drive Shafts India Limited v. ITO 2003 (179) CTR (SC) 11 mandated that the AO should give opportunity to the assessee to represent against the reopening of assessment, yet the final word or the final opinion whether to proceed with reassessment notice or drop it is that of the AO himself and none other. In the present case, concededly, the opportunity mandated by the Supreme Court judgment was given to the petitioner. He represented against the notice; the AO made a speaking order rejecting the objections and decided to proceed ahead with the reassessment. It was submitted that even though the statement of Mr. Khanna apparently was in favor of the petitioner, yet the existence of telephone connection was not disputed. Furthermore, submitted learned counsel, the Tax Evasion Petition had alleged that the petitioner was the real owner of the New Friends Colony property. All this required investigation; especially, the complainant needed an opportunity to rebut the writ petitioner s submissions. Likewise, argued learned counsel for the Revenue, the non-declaration of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court, the assessee disclosed his address to be the New Friends Colony property. The allegations of ownership stood rebutted through the sworn deposition of Shri Khanna and the documents, which unequivocally showed his ownership and not that of the assessee, whose connection with it was as a tenant for about two years. Naturally, the assessee had a telephone installed in the premises during that period. That he disclosed his address as the New Friends Colony property is but natural, because he lived there at that time. This court is astonished, to say the least that after becoming aware of these facts, the AO persisted - and still persists in submitting that there is some reasonable or credible basis to maintain the reassessment proceedings. This court can only surmise that either the AO is driven by fear, or is party to what the complainant ultimately wishes- in either case, his persistence with reassessment proceedings being devoid of any legal sanction. Such insistence - one may even add obdurate insistence- is the hallmark of whimsicality and a far cry from the reasonable basis for exercise of power under Section 147/148 which the court would be bound to uphold. 12. As far a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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