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TMI Blog2014 (11) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... ed its Return of Income for Assessment Year 2000-01 declaring a total income of Rs. 31,650/-. The Return of Income was accompanied by computation of income and audited balance sheet and profit and loss account . In its computation of income the petitioner had made a note that dividend income of Rs. 2.28 crores is fully exempt under Section 10(33) of the Act. Besides in its Balance sheet and Profit and loss account the petitioner did indicate that shares and securities were its stock in trade and dividend received on these shares and securities aggregated to Rs. 2.29 crores. During the course of assessment proceedings, the petitioner was called upon to give details of the dividend received as well as profit and/or loss incurred in share trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dividend stripping exercise with a view to evade payment of tax. The order dated 11 November 2003 of the block period was carried in appeal to the Income Tax Appellate Tribunal (Tribunal); e) By an order dated 28 February 2006 the Tribunal following the decision of the Special Bench of the Tribunal in Walfort Shares and Stock Brokers v. I.T.O. 96 ITD 1 allowed the petitioner's appeal. It held that the petitioner was entitled to claim loss on these transactions prior to introduction of Section 94(7) of the Act w.e.f. 1 April 2002; f) Immediately after the above order of the Tribunal dated 28 February 2006, the Assessing Officer issued the impugned notice dated 23 March 2007 seeking to reopen the assessment proceeding for Assessment Ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts had been fully and truly disclosed during the regular assessment proceedings for A.Y. 2000-01.Consequently the 1st proviso to Section 147 would not be applicable; (b) The Assessing Officer had applied his mind to the Dividend received by the petitioner and its claim for exemption under Section 10(33) of the Act while passing the assessment order dated 24 March 2003 under Section 143(3) of the Act. Thus the impugned notice is on a mere change of opinion; and (c) The Assessing officer had no reason to believe that income chargeable to tax has escaped assessment in view of the decision of the Tribunal in petitioner's own case and the Special Bench decision in Walfort Share and Stock Brokers P. Ltd. (supra) .The petitioner also poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce is called for. 6) It is settled law in respect of reopening of assessment under the income Tax Act that the jurisdiction to reopen an assessment will only arise when the Assessing Officer himself has reason to believe that income chargeable to tax has escaped assessment. This reason to believe cannot be on the basis of change of opinion, i.e. where the issue was considered by the Assessing Officer in regular assessment proceedings and a particular view was taken (though not expressed/mentioned in the order). Moreover if the issue is concluded by an order of an higher forum, then there would be no reason to believe that income chargeable to tax has escaped assessment. Besides, where an assessment is sought to be reopened beyond a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 24 March 2003 passed under Section 143(3) of the Act wherein the Assessing Officer has recorded the fact that the Petitioner is trader in shares and securities. All these facts would indicate that the petitioner had fully and truly disclosed all the facts relevant to assessment viz. that it was in business of trading in shares and securities as well as the fact that the dividend received by them is claimed as exempted under Section 10(33) of the Act. When the aforesaid fact of full disclosure was pointed out to the Assessing Officer in the objection filed before him, the same was negatived by merely stating that the material facts had come to the notice of the Assessing Officer subsequent to assessment. However, no particulars ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion. On the above ground also the impugned notice is not sustainable. 9) We have recorded the facts of this case in some details in view of the fact that the manner in which the respondent revenue has acted in this particular case clearly shows that they were determined to deny the benefit of exemption under Section 10(33) of the Act to the petitioner on one or the other ground. The Assessing Officer after having passed the assessment order on 24 March 2003 has issued notice for rectification dated 12 March 2004 under Section 154 of the Act on the ground that exemption under Section 10(33) of the Act to the dividend received by the petitioner is not available as dividend is integral part of the traded case. When the petitioner pointed o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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