TMI Blog2006 (9) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... rs deem fit. It is an Income Tax assessee and has been paying Income Tax to the respondent Department regularly. (b) During the assessment year 2000-2001, it had conveyed one of its properties in Mumbai for a sum of Rs.2,47,50,000/- in exchange of another property in Mumbai for a sum of Rs.92,40,000/-. The total cost of transaction along with the cost of registration was Rs.1,00,41,925/-. Thereafter, the petitioner had purchased a flat in Chennai in the month of March 2000 for a sum of Rs.30 lakhs. Based on the above transaction, the firm had filed its return of income on November 13, 2000 declaring a business loss of Rs.3,60,412/- and short-term capital gains of Rs.1,16,51,612/-. Thus, the total income that was declared was Rs.1,12,91,200/- and accordingly, the petitioner paid Income Tax of Rs.46,68,528/-. (c) The Income Tax assessment as per Section 143(1) of the Income Tax Act ("the Act") was completed on January 04, 2002 and an intimation dated January 04, 2002, ordering a refund of Rs.1,45,563/- was received by the petitioner on February 18, 2004. In the said intimation sent by the respondent, there were certain mistakes and hence, the petitioner firm filed a petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal return filed on November 13, 2000 as reply, which, according to the petitioner firm, was issued without assigning any reason. (g) With regard to notice under Section 143(2) of the Act, the petitioner furnished all the details. In this situation, the petitioner had repeatedly requested the respondent to furnish the reasons for re-opening the assessment. The respondent, as an after-thought, furnished irrelevant reasons in his letter which were not disclosed in the notice issued under Section 148 and hence, the impugned assessment order dated March 31, 2006 is in total violation of the principles laid down in this regard and the same is challenged in this writ petition. 4. The main grounds of challenge in this writ petition are that (i) under the Act, the opinion given in an assessment cannot be reopened by any other authority except on fresh materials, (ii) it is settled law that along with notice issued under Section 148, reasons should be given or annexed along with notice itself and therefore, the entire proceedings is vitiated, (iii) the impugned assessment order issued without giving any opportunity to the petitioner and without verifying any fresh materials is liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot decide the legal issues in the appeal and therefore, the petitioner has no other option but to challenge the impugned proceedings before this Court as per the law laid down by the Supreme Court. 6. In support his above contentions, the learned counsel for the petitioner has relied on various decisions of the Supreme Court, namely, the decisions reported in the case of (a) Andhra Bank Ltd. v. CIT [1997] 225 ITR 447, (b) in the case of GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19 (c) in the case of Ram Bai v. CIT [1999] 236 ITR 696 ; [1999] 3 SCC 30 (Paragraph 6 AND 7). 7. While admitting the writ petition on 27.04.2006, this Court had ordered notice to the respondent and granted an order of interim stay. 8. Mr. M. Muralikumaran, learned counsel for the respondent, on instruction from the respondent, has contended that the impugned order issued by the respondent is legally valid as the petitioner has not furnished the particulars such as (i) the nature of business conducted during the year at Mumbai ; (ii) details for liabilities for "Other Finance", names and addresses of parties and confirmation from the parties ; (iii) confirmation from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely in support of the return : provided that no notice under clause (ii) shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished." Issue of notice where income has escaped assessment : Section 148(2) The Assessing Officer shall, before issuing any notice under this Section, record his reasons for doing so." Time limit for completion of assessments and re-assessments : Section 153(2) "No order of assessment, re-assessment or re-computation shall be made under Section 147 after the expiry of one year from the end of the financial year in which the notice under Section 148 was served. 10. Having dealt with the relevant provisions of the Income Tax Act, let met now proceed to analyse the various case laws necessary for deciding this appeal and they are as under : (i) In the judgment of the Supreme Court reported in the case of Andhra Bank Ltd. v. CIT , [1997] 225 ITR 447 in it was held as under: "Once it is found that the change in the method of accounting was knowingly allowed by the Income Tax Officer taking into account all the relevant facts, it is not permissible for the Income Tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per acre and the total value of the entire land as on January 01, 1954 would be about Rs.16,500/-. Thus, the assessee made a net capital gain of Rs.1,93,860/-. Besides the amount of interest that accrued year to year will have to be included as a protective basis. The assessee has filed a return disclosing an income of Rs.3,599/- being interest on belated compensation on February 17, 1972. As this has been filed beyond the period prescribed under Section 139(4), the return has been treated as invalid and filed. I have, therefore, reason to believe that the income chargeable to tax has escaped for Assessment Year 1965-66 and that such escapement was by reason of omission or failure on the part of the assessee to make a valid return under Section 139 for Assessment Year 1965-66. I request the Commissioner to accord sanction for reopening the assessment under Section 147(a)." 7.Apart from the said communication, there is nothing on record to disclose the material on which the Income-tax Officer decided to reopen the assessment. He has made an assertion in the said communication that the land in question was not subjected to agricultural operation and that he had reason to believe, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued by the respondent nearly after the expiry of three years. Further, from the settled legal proposition as found from one of the rulings of the Supreme Court (supra), once an opinion is given in an assessment, it cannot be re-opened by any other authority except on fresh material. That apart, a notice issued under Section 148 of the Act should be a reasoned one whereas in the case before me, the impugned order has been issued without assigning any reason justifying its issuance. Also, in the absence of any new material, the Assessing Officer is not empowered to re-open an assessment irrespective of the fact whether it is made under Section 143(1) or 143(3) of the Act. As per the rulings of the Apex Court in this regard, there must always be a speaking order whereas the respondent has neither chosen to adduce any reason nor found any fresh material to re-open the assessment. 13. In the light of the discussion made above and in view of the Supreme Court rulings (supra) and also the relevant provisions of the Income Tax Act already dealt with, I am of the considered view that the impugned order is liable to be set aside and accordingly, it is set aside and the writ petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
