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2016 (7) TMI 328 - BOMBAY HIGH COURT

2016 (7) TMI 328 - BOMBAY HIGH COURT - TMI - Reopening of assessment - reasons to believe - Petitioner is a Trust - Held that:- So far as first and second submissions of the Petitioner viz: change of opinion and no failure to disclose all facts are concerned, both are unsustainable. This is for the reason that no scrutiny Assessment was done of the Petitioner Trust for the subject Assessment Year. The return of income was only processed under Section 143(1) of the Act. Therefore, there was no fo .....

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ssessment Year being withdrawn, it does not/ cannot enure for the benefit of the Petitioner Trust. Each Assessee is independent and the reasons recorded for reopening have to be independently examined in the context of the Assessee whose Assessment is sought to be reopened. - The fourth submission of the Petitioner that income which is alleged to have escaped Assessment has already been disclosed in the return of the Society and tax paid on the same, therefore no income chargeable to tax, ha .....

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nt was carried out in the case of the Petitioner Trust. The return was processed under Section 143(1) of the Act. In that view of the matter, there has been no occasion to consider the taxability of interest income and income from the house property on merits in the hands of the PetitionerTrust. Thus, the Rule of Consistency may not apply to the present facts. This Rule of Consistency presupposes a decision on identical facts and law in an earlier and/or Assessment Year to that under considerati .....

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sment Proceedings after hearing the Petitioner Trust. Further, the Petitioner Trust is not remedy less. In case, the order of the Assessing Officer, is prejudicial to it, an appeal under the Act, is provided. Therefore, in the present facts, no interference is warranted. - Decided against assessee - Writ Petition No. 918 of 2016 - Dated:- 22-6-2016 - M. S. Sanklecha And A. K. Menon, JJ. For the Petitioner : Mr. Firoz Andhyarujina, Sr. Advocate with Mr. Sameer Dalal For the Respondents : Mr. P. C .....

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reopen the Assessment for the Assessment Year 2008-09. 3 The Petitioner is a Trust. The sole trustee of the Petitioner is Jolly Maker 1 Premises Cooperative Housing Society (Society). The return of income of the PetitionerTrust for the Assessment Year 2008-09, was processed under Section 143(1) of the Act. From the returns of income of the Society for the Assessment Year 2008-09, the Assessing Officer was of the prima facie view that income chargeable to tax in the hands of the PetitionerTrust h .....

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; 5,18,29,574/income from business or profession at ₹ 99,01,239/and income from other source at ₹ 1,75,61,811/Deduction u/s.80P has been claimed at ₹ 1,84,86,065/. Further, following information has been provided on record Jolly Maker 1 Premises Cooperative Society Ltd., as Trustee is representative assessee under sections 160/161/166 of the IT Act,1961 in respect of property income received/ entitled to be received on behalf and for the benefit of beneficiaries with determinat .....

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ed with that of the Society under section 60 of the Income Tax Act, 1961 without prejudice to the exclusive rights of the joint owners in the Nariman Bhavan property. In view of the above and without prejudice, returns are submitted, as under inter alia In the case of the Society, by including the property income under section 60 of the I. T.Act, 1961; and In the case of Trust, declaring other income but excluding Property Income in view of inclusion of its property income in the return of the S .....

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come is being earned on this deposit. However, Coop. Society as trustee has not filed any valid return of income for A. Y. 2008-09, in capacity of representative assessee u/s. 161 of the Act, declaring rental income and interest income from Nariman Bhavan Property. The society,being a trustee, is in receipt of income from trust and therefore was required to be assessed in its representative capacity for income in respect of trust. Since the representative assessee is a separate assessee, it has .....

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societies and deduction of ₹ 1,84,86,065/u/ s. 80P(2) has been claimed on interest income from this investment in the return filed in capacity of Cooperative Society. This claim of deduction u/s. 80P(2) is not allowable to the society, as the interest income is of trust and not of society. As the rental income and interest income is of the trust, therefore both these incomes are to be considered in the case of trust, therefore both these incomes are to be considered in the case of trust an .....

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rust by its letter dated 26th October, 2015 objected to the impugned reopening notice dated 16th March, 2015. The Assessing Officer by an order dated 27th November, 2015 rejected the Petitioner Trust's objections to the impugned notice. This rejection of objections led to filing of this Petition and an adinterim stay of the impugned notice was granted. 6 Mr. Andhyarujina, learned Sr. Counsel in support of the Petition submits that the impugned notice dated 16th March, 2015 is without jurisdi .....

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aped Assessment in the hands of the Petitioner Trust. Thus, no income chargeable to tax has in fact escaped Assessment; and (e) For the earlier and the subsequent Assessment Years, the escaped income on account of interest and rent from house property were all subjected to tax in the hands of the Society and not in the hands of the Petitioner Trust. Therefore, on the principle of consistency, the same treatment should continue for the subject Assessment Year. 7 It is a settled position in law th .....

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, failure on the part of the Assessee to fully and truly disclose all material facts necessary for Assessment, will not apply, as the proviso only applies where an Assessment has been done under Section 143(3) of the Act. Further, as observed by the Apex Court in ACIT v/s. Rajesh Jhaveri 291 ITR 500 at the stage of issuing of notice, the only question is whether there is reason to believe that income chargeable to tax has escaped Assessment. At the stage of issuing of the notice, it is not neces .....

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cerned, both are unsustainable. This is for the reason that no scrutiny Assessment was done of the Petitioner Trust for the subject Assessment Year. The return of income was only processed under Section 143(1) of the Act. Therefore, there was no formation of opinion on the part of the Assessing Officer for change of opinion to take place. Similarly, the condition precedent in case of notices issued beyond four years of the end of the relevant Assessment Year viz: the failure to disclose truly an .....

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ht to be reopened. 10 The fourth submission of the Petitioner that income which is alleged to have escaped Assessment has already been disclosed in the return of the Society and tax paid on the same, therefore no income chargeable to tax, has escaped Assessment. This submission is not sustainable. This for the reason that it is the prima facie view of the Revenue that the deduction claimed under Section 80P of the Act by the Society as a Cooperative is not available to the Petitioner Trust. Thus .....

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