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Sant Trust (Since Dissolved) Versus Asstt. Commissioner of Income Tax 19 (3) , Mumbai And Others

2015 (7) TMI 917 - BOMBAY HIGH COURT

Reopening of assessment - validity of notice - assessee has not offered any income arisen by way of transfer of capital asset on dissolution of Sant Trust for taxation - whether the sanction was not accorded by the Joint Commissioner but by officer superior in rank to the Joint Commissioner and therefore, the sanction is invalid? - Held that:- In the present case the Joint Commissioner who was promoted as a Commissioner and has granted the sanction, was directed by the Board to so discharge duti .....

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at it clearly indicates that the information leading to the impugned notice was received from the Assessing Officer of the beneficiaries. However it is also recorded in the Notice itself that the same was issued after verification of the information. Thus, we do not accept Mr.Toprani's submission that the Assessing Officer failed to apply his mind independently before issuing the impugned Notice.

As far as the issue with regard to the Intimation under Section 143(1) of the Act being b .....

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position between the parties. - Decided against assessee. - Writ Petition No. 1349 of 2015 - Dated:- 16-7-2015 - M. S. Sanklecha And N. M. Jamdar,JJ. For the Appellant : Mr Pankaj Toprani a/w Ms Usha Dalal For the Respondent : Mr A R Malhotra a/w Mr N A Kazi ORDER P. C. This petition under Article 226 of the Constitution of India challenges the Notice dated 20 March 2014 issued by the Assistant Commissioner of Income Tax under Section 148 of the Income Tax Act, 1961 (the Act). By the impugned N .....

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r's return of Income was processed under Section 143(1) of the Act on 25 March 2009. 3. On 20 March 2014, the impugned Notice was issued. The reasons in support of the impugned notice as communicated to the Petitioner read as under - 'On verification of the case record of the assessee Trust i.e. SANT TRUST for A.Y. 2007-08, it is seen that assessee has not offered any income arisen by way of transfer of capital asset on dissolution of Sant Trust for taxation. Section 45(4) of Income Tax .....

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In the light of the above, the assessee failed to discharge true picture of its income arisen by way of transfer of capital asset on dissolution of the trust. Hence, income chargeable to tax amounting to more than Rs. One lakh has escaped assessment by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment for that A.Y.2007-08. From the above facts, I have reason to believe that the income chargeable to tax amounting to more than Rs. .....

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g grounds - a) The Notice dated 20 March 2014 is without jurisdiction as it is issued by an Assistant Commissioner of Income Tax on a sanction of the Commissioner of Income Tax. This is not permitted as in such cases the sanction in terms of Section 151(2) of the Act has to be that of Joint Commissioner of Income Tax. b) It was submitted that the original Return of Income tax filed by the Petitioner was processed under Section 143(1) of the Act but beyond the period of limitation provided under .....

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ed upon the information / directions received from the Assessing officer of the beneficiaries of the Petitionertrust; and d) The issue of chargeability to tax under Section 45(4) of the Act on a transfer done by a trust stands concluded by the decision of this Court in favour of the Assessee by virtue of decision of this Court in L.R.Patel Family Trust Vs Income Tax Officer & ors. 262 ITR page 520. It has been held that Section 45(4) of the Act will not apply in case of transfer of an asset. .....

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uary 2014 issued by Central Board of Direct Taxes, wherein the Joint Commissioner / Additional Commissioner who has granted sanction had been promoted to the rank of the Commissioner. However the order itself provides that he will continue to discharge functions which he was performing till then, i.e. of the Joint Commissioner. Therefore, the sanction was appropriately obtained of the Joint Commissioner. b) The intimation under Section 143(1) is within the period of limitation as provided thereu .....

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nary trust as is the present facts. 6. We have considered the submissions. The primary contention of Mr.Toprani, is that the sanction was not accorded by the Joint Commissioner but by officer superior in rank to the Joint Commissioner and therefore, the sanction is invalid. In support he also placed reliance on the decision of this Court in Ghanshyam K. Khabrani vs. Assistant Commissioner of Income Tax & ors. ( 2012) 346 ITR 443 (Bom), wherein in similar circumstances this Court held that wh .....

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he communication dated 20 February 2014. This fact was not present in Ghanshyam K.Khabrani. The above communication intimated not only his promotion but also directed him to continue to discharge the functions which he was discharging till then as Joint Commissioner / Additional Commissioner. Thus the CBDT has in terms of Section 120(2) of the Act authorised Commissioner to exercise / or perform functions of an Income Tax authority subordinate to him i.e. of Joint / Addl. Commissioner. Consequen .....

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