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2015 (9) TMI 791 - ITAT AHMEDABAD

2015 (9) TMI 791 - ITAT AHMEDABAD - TMI - Validity of reassessment proceedings - Held that:- In the course of original assessment proceedings, not only all the necessary details were on record, a specific question with respect to unrealized rent was raised during the assessment proceedings, this fact was duly recorded in the proceedings sheet before the Assessing Officer. We have perused the assessment records and we are satisfied about this fact. In this view of the matter, as the assessee, rig .....

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are rendered academic and infructuous - Decided in favour of assessee. - ITA No.212/Ahd/2012 - Dated:- 31-8-2015 - Pramod Kumar and S.S. Godara, JJ. For The Appellant : S.N. Soparkar with Urvashi Shodhan For The Respondent : Sonia Kumar Per Pramod Kumar AM: 1. By way of this appeal, the assessee appellant has challenged the order dated 20th December, 2011 passed by the ld. CIT(A) in the matter of assessment under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 ( the Act hereinafter) for th .....

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sons on 04.03.2010 :- In this case the assessment u/s 143(3) of the I. T. Act-1961 was passed on 19.12.2008. On verification of the case records, it is seen that the assessee has already claimed 30% Standard Deduction out of the rental income shown during the four years on ₹ 32,63,499/-. It has also seen that the assessee has similar amount shown of ₹ 12,75,783/- in schedule of Sundry Debtors in the name of M/s Panchjanya Institute of Commerce and Management Studies as on 31.03.2006. .....

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ccount of the sundry debtor as per schedule 6 of the balance sheet s on 31.03.2006. 4. Aggrieved, inter alia, by reopening of the assessment itself, assessee carried the matter in appeal before the ld. CIT(A) but without any success. While rejecting the grievance of the assessee, learned CIT(A) observed as follows :- 4.3.1 So far as the appellant s challenge to reopening of assessment is concerned, the same is also not acceptable. A perusal of the original assessment order shown that the A.O. ha .....

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f unrealised rent made by the appellant was totally against law and wholly unjustified. From the facts on record, it appears that the A.O. had reason to believe that the appellant s income had escaped assessment. So far as the reliance upon the decision of honourable Supreme Court in the case of Kelvinator of India is concerned, this decision was interpreted recently by honourable Madras High Court in the case of Sri Sakthai Textiles Ltd., [2010] 193 TAXMAN 216 (MAD.). In this decision the court .....

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articularly, the recent judgement of the Hon ble Supreme Court cited supra, there is no legal necessity that the materials referred to in section 147 of the Act should be fresh materials collected subsequent to the original assessment orders. Even from out of materials which are already available on record, if the subsequent officer finds reason to believe that there has been escapement of assessment, surely he can issue notice under section 148 of the Act. Such course, will not, in my considere .....

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of honourable Gujarat High Court in the case of Praful Chunill Patel, [1999] 236 ITR 832 (GUJ.) : In cases where the Assessing Officer has not made an assessment of any item of income chargeable to tax while passing the assessment order in the relevant assessment year, it cannot be said that such income was subjected to an assessment. In the assessment proceedings, the Assessing Officer would ascertain on consideration of all relevant circumstances the amount of tax chargeable to a given taxpaye .....

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to tax, it cannot be inferred that the Assessing Officer must necessarily have deliberated over it and taken it out while ascertaining the taxable income or that he had formed any opinion in respect thereof. If looking back it appears to the Assessing Officer (albeit within four years of the end of the relevant assessment year) hat a particular item even though reflected on the record was not subjected to assessment and was left out while working out the taxable income and the tax payable there .....

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ng Officer that such income had escaped assessment and the Assessing Officer in such cases would be ex facie justified in initiating the proceedings on such basis. The cases of non-assessment of an item of income chargeable to tax would warrant formation of requisite belief to initiate the proceeding within four years of the end of the relevant assessment year, even where full disclosures were made and yet a income chargeable to tax had escaped from being included in the final assessment order i .....

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pement of income leave no scope for an argument that they are not cases of income having escaped assessment. If the Assessing Officer prima facie finds or discovers that the case falls in any of the clauses of Explanation 2, then those cases will be deemed cases of income that has escaped assessment and without anything more beyond such finding or discovery, he can initiate the proceedings under section 147 of the Act. On a proper interpretation of section 147 of the Act, it would appear that th .....

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ver the case of discovery of a mistake in the assessment caused by either an erroneous construction of the transaction or due to its non-consideration, or, caused by a mistake of law applicable to such transfer or transaction even where there has been a complete disclosure of all relevant fact upon which a correct assessment could have been based. In cases where the Assessing Officer had overlooked something at the first assessment, there can, in our opinion, be no question of any change of opin .....

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a different opinion, change the earlier opinion. However, in cases where an error or mistake is detected, it can never be said that there is only a mere change of opinion. The mistake or error which is detected and which constituted a valid decision or cause to form a belief in the first assessment as result of which the income has escaped assessment, would constitute a reason to believe that the income had escaped assessment, and such cases where mistakes and errors are detected and which const .....

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f India Ltd. Taxmann. Com 3 (Ker). Ian the present case, the assessment has been reopened by issuing the notice u/s 148 within 4 years from the end of the assessment year. Hence on the basis of discussions made above, it is held that the assessment has been rightly reopened by the A.O. Accordingly, this ground of appeal is dismissed. 5. The assessee is not satisfied with the order of the ld. CIT(A) and is in further appeal before us. 6. We have heard the rival contentions, perused the material o .....

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eing discovered or found, the Assessing Officer later on cannot, merely for the sake of giving a different opinion, change the earlier opinion. It is on the basis that reopening is justified. However, even after referring to this decision, Hon ble jurisdictional High Court has, in the case of Raymon Glues and Chemicals vs. DCIT [(2015) 55 Taxman.com 421 (Guj)] has held that the Assessing Officer cannot sit in judgement over decision of the earlier Assessing Officer who passed order under section .....

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2.1995. The reasons for reopening were duly recorded by A.O. The original assessment was made on 26.03.1992. This was reopened within 4 years and fresh assessment u/s.143(3) r.w.s. 147 was made on 28.02.1995. The action under the main section 147 is possible in spite of the fact that complete disclosure of material facts was made as held by Hon'ble Gujarat High Court in the case of Praful Chunilal Patel (supra). In this decision, jurisdictional High Court held that the power to make assessme .....

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edings on finding or discovering such cases and no doubt whether they constitute cases of escapement of income, would be permissible. This is also held in the case of Praful Chunilal Patel reported in 240 ITR 240 (Guj) relates to A.Y. involved was 1986-97. Therefore, both the decisions relied by learned counsel of the assessee are not relevant for deciding this appeal which has to be decided. Keeping in view the provisions of Section 147 to 151 as substituted / amended with effect from 01.04.198 .....

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cord that the formation of belief by the Assessing Officer that certain income has escaped assessment for the year under appeal has been borne only because of the primary facts furnished by the assessee for the purpose of assessment of its income and other material information available on record. The details of payments made by the assessee to the persons specified in Section 40-A, Audit report u/s.44-AB and the controversy in relation thereto were well within the knowledge of the Assessing Off .....

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section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:- (a) the total income or loss shall be computed after making the following adjustments, namely:- (i) any arithmetical error in the return; or (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; (b) the tax and interest, if any, shall be computed on the basis of the total income computed under clause (a); (c) th .....

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) an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to, the assessee under clause (c); and (e) the amount of refund due to the assessee in pursuance of the determination under clause © shall be granted to the assessee: Provided that an intimation shall also be sent to the assessee in a case where the loss declared in the return by the assessee is adjusted but no tax or interest is payable by, or .....

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f which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction; (b) the acknowledgement of the return shall be deemed to be the intimation in a case where no sum is payable by, or refundable to, the assessee under clause (c), and where no adjustment has been made under .....

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of such assessment; (ii) issued under clause(ii) of subsection (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may required on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to .....

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depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has e .....

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outside India, chargeable to tax, has escaped assessment for any assessment year: Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment.' 13. The aforesaid provisions are clear and unambiguous. We find that by invoking the provision of Section 147 of the Act, the successor Assessing Officer has simply sat over .....

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