TMI Blog2016 (5) TMI 549X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer to tentatively believe that taxable income has escaped assessment cannot be brushed aside at the threshold without a fact-finding procedure, more-so when the petitioners are not remediless and have got equally efficacious recourses under the Act. A somewhat similar dictum is discernible from CIT vs. Chhabil Dass Agarwal (2013 (8) TMI 458 - SUPREME COURT) as it holds that the Act provides complete machinery for the assessment/reassessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities, and the assessee could not be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Commissioner of Income Tax (Appeals). Having held so, it is not expedient for this Court to express its opinion on the rival submissions as it may unwittingly cause prejudice to either party. Suffice it to say that no case to quash the notice(s) issued under Section 148 read with Section 147 of the Act or the order(s) rejecting the objections, is made out at this premature stage. - CWP No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d building throughout the lease period. 5.2 The Lessee will obtain all requisite clearances permissions and land use charges for setting up its BUSINESS as described above and pay all the charges/levies/taxes/fees as required by the concerned authorities. 5.4 On completion of the lease period, the Lessee shall hand over to the Lessors the building built on the said premises in good condition without any defects/ damages/ leakages/ or any other areas requiring repairs. 5.5 The Lessee shall hand over quite and vacant possession of the land building to the Lessors with no charges what so ever at the end of the lease period after paying all outstanding bills/taxes/fee/levies/bills/dues to the authorities and shall hand over a no due certificate on the date of the end of the lease period from the municipal corporation, Chandigarh, Estate office, Electricity Department, Water Department etc. (6) The Chandigarh Administration vide notification dated 19th September, 2005 notified the Scheme known as Chandigarh Conversion of Land Use of Industrial Sites into Commercial Activity/Services in Industrial Area, Phase-I/Phase-II, Chandigarh Scheme-2005 , thereby permi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directly through the firm M/s Krishna Automobiles. Although, the payment has directly been made by M/s Krishna Automobiles to Chandigarh Housing Board instead of routing through the accounts of Sh. Sumit Passi and Sh. Sachit Passi, it has been made for conversion of land use and is thus, on behalf of the owners of the land. Therefore, the whole transaction can be understood as a short-cut to the process of M/s Krishna Automobiles making payment to partners who further make the payment to Chandigarh Housing Board. In other words, the amount paid by M/s Krishna Automobiles to Chandigarh Administration is constructive receipt towards rent in the hands of the owners of the land. 1.4 The plot when leased was having industrial character. The change of land use has changed its character to commercial w.e.f. 09.11.2006. Therefore, the rental value of land has increased many fold. This has been received by the partners as constructive receipt towards rent as a consequence of payments made by the firm to Chandigarh Housing Board. The actual annual rent is, thus, the sum total of the rent as per agreement plus the amount of constructive receipt towards rent paid by the firm M/s Kr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt towards rent in the hands of the assessee. (15) The respondent-Authority further observed that the conversion charges paid on behalf of the landlord are indeed revenue receipts which are taxable in his/their hands as it is the landlord who is the ultimate beneficiary of the payment of conversion charges paid by the lessee of the leased out land. The order(s) rejecting the objections as also the notices are being assailed in these writ proceedings. (16) We have heard learned senior counsel for the Assessee(s) and the counsel for Revenue and have gone through the record. (17) Reiterating their objections to the re-opening of the cases, it was urged on behalf of the Assessee(s) that (i) The conversion charges paid by the lessee firm to the Chandigarh Housing Board cannot constitute the income of its partners; (ii) In the absence of any actual receipt of income by the Assessee(s) nothing can notionally/hypothetically be brought to tax in their hands; (iii) Even according to the Revenue, the value of the property has increased due to change in the nature of land use from industrial to commercial and, at best, it amounts to an accretion in the value of cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tentative opinion formed by the Assessing Authority is based upon correct appreciation of the law and facts as there was no binding contract between the lessor(s) and lessee for the latter to pay the conversion of land use charges on behalf of the formers and since such charges have been admittedly paid by the lessee, surely on behalf of the lessors, the said payment is liable to be accounted for towards the enhanced rental value of the leased property; (19) It goes without saying that after its amendment w.e.f. 01.04.1989, Section 147 of the Act empowers the Assessing Officer to assess or re-assess any income which he has reason to believe that it was chargeable to tax and has escaped assessment. The mandatory twin-test earlier embedded in Section 147 for reopening of assessment has been dispensed with under the amended provision so as to enable the Assessing Officer to make a back assessment subject to fulfillment of the solitary condition that he has reason(s) to believe that income has escaped assessment. (20) The Supreme Court in Assistant Commissioner of Income Tax vs. Rajesh Jhaveri Stock Brokers Private Limited (2008) 14 SCC 208 has very aptly clarified that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 139 etc. or to disclose fully and truly all material facts necessary for his assessment, for that Assessment Year. (24) M/s Phool Chand Bajrang Lal and another v. ITO and another, (1993) 4 SCC 77 has well explained that the purpose and intent of the provisions have to be looked to. One of the purposes of Section 147, appears to ensure that a party cannot get away by willfully making a false or untrue statement at the time of original assessment and when that falsity comes to notice, to turn around and say you accepted my lie, now your hands are tied and you can do nothing. It would be travesty of justice to allow the assessee that latitude. (25) In Srikrishna Private Ltd. and others vs. ITO Calcutta and others (1996) 9 SCC 534 it was observed that what needs to be emphasised is that the obligation on the assessee to disclose the material facts - or what are called, primary facts - is not a mere disclosure but a disclosure which is full and true. A false disclosure is not a true disclosure. The disclosure must not only be true but must be full - fully and truly . A false assertion, or statement, or material fact, thereof, attracts the jurisdiction of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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