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Kohinoor Hatcheries Pvt Ltd. Versus The Deputy Commissioner of Income Tax And Another

2016 (9) TMI 208 - ANDHRA PRADESH HIGH COURT

Reopening of assessment - Held that:- The respondents cannot shy away from the fact that there was a full and true disclosure of all material facts necessary for assessment. This case will not fall under the category of mere production of books of accounts and other records. This case very clearly falls under the category of true and full disclosure, upon which the first assessment order was passed on the opinion that the lands sold were agricultural lands. Therefore, to say after 4 years that t .....

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Income Tax Act, 1961, for reopening the assessment for the year 2008-2009. 2. Heard Sri Y. Ratnakar, learned counsel for the petitioner and Sri Narasimha Sarma, learned senior standing counsel for the respondents. 3. The petitioner/assessee filed a return of income for the Assessment Year 2008-09 on 30-09-2008, admitting (i) a loss of ₹ 1,98,26,817/- and (ii) a profit on sale of land to the tune of ₹ 14,35,77,640/-. The assessment was completed under Section 143 (3) of the Act on 31 .....

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any reasons for reopening of assessment, the petitioner made a request on 25-04-2014. In response, the Assessing Officer issued a reply dated 14-07-2014 indicating that the profit on sale of land amounting to ₹ 14,35,77,640/-, related to land sold to a Real Estate Company for the construction of a Special Economic Zone and that therefore, the sale was not exempt as agricultural land in view of the decision of the Supreme Court in Sarifabibi, Mohammed Ibrahim v. Commissioner of Income Tax ( .....

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r the notice dated 26-04-2014. This Court, while ordering notice before admission in the writ petition on 05.02.2015, permitted the Assessing Officer to complete the reassessment, but not to give effect to the same, until further orders of this Court. 8. But It appears that by the time this court passed the said order, the assessing officer had already completed the assessment on 31-01-2015. 9. Therefore, despite the interim order passed by this court, the Assessing officer communicated the asse .....

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ngineering Company Limited v. Commissioner of Income Tax 247 ITR 818 that the writ petition deserves to be dismissed on the ground of availability of alternative remedy. But we do not think that the said contention can be upheld in the case on hand. The law is well settled that the refusal to entertain writ petitions on the ground of availability of alternative remedies, is a self-imposed restriction. This self-imposed restriction, as pointed out even in Commissioner of Income Tax and others v. .....

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ory authority acted in total violation of the principles of natural justice. 11. In the case on hand, the petitioner challenges the very initiation of proceedings for reopening of assessment, as being without jurisdiction and also in complete defiance of the statutory prescriptions. Therefore, this is not a case, which can be thrown out on the ground of availability of alternative remedy. 12. Coming to the merits of the case, the reopening of assessment had happened in this case, admittedly afte .....

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9; b) failure on the part of the assessee to make a return response to a notice under Section 142 (1) or under Section 148; and c) failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. 13. It is neither the case of the Assessing Officer nor that of the learned senior Standing Counsel that the present case would fall under the first or the second contingency. The respondents attempt to bring the case of the writ petitioner, under the thir .....

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gence, have been discovered by the Assessing Officer, will not necessarily amount to disclosure within the meaning of the proviso. 15. Therefore, the proviso as well as the Explanation 1 to Section 147 make it obligatory on the part of the assessee (1) to make a full disclosure; 2) to make a true disclosure and 3) to ensure that such true and full disclosure is of material facts necessary for the assessment. A clear signal is sent to the assessee by Explanation 1 that the mere production of book .....

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x vs. Kelvinator India Ltd. 2010 320 ITR 561, that though the power to reopen assessment, after the Direct Tax Laws (Amendment) Act, 1987 was much wider, Section 147 cannot be taken to confer arbitrary powers to reopen assessment on the basis of mere change of opinion. 17. The question of change of opinion would arise only if there had been a formation of opinion in the first instance. It is not necessary that upon mere production of material evidence, a formation of opinion or the possibility o .....

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aterials necessary for assessment, the statute ensures two things viz., a) that an officer, who had once formed an opinion, does not seek to change it later; and b) that an officer, who, deliberately or by his negligence, omitted to form an opinion, despite being made aware of the material facts, do not take refuge latter under Section 147 to cover up his negligence. 19. A question may arise in the second category of cases as to whether the interests of the Revenue would not suffer in such cases .....

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on Bench of the Supreme Court in Calcutta Discount Co. Ltd., v. Income Tax Officer and another 41 ITR 191, the duty of the assessee stops with a true and full disclosure and does not extend to assisting the Assessing Officer with the inferences that could be drawn from out of what was disclosed. 22. Explanation 1, as pointed out by the Supreme Court in Commissioner of Income Tax, Calcutta v. Burlop Dealers Limited 41 ITR 191 (SC), does not impose an onerous obligation upon the assessee. It merel .....

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covering the sale of agricultural lands and its taxability. The reply submitted by the petitioner to these questions at Sl.Nos.4 and 5 of the letter dated 9.11.2010 were as follows: The details of total land holding of the company are enclosed. We have sold 28.13 acres of agricultural land during the financial year 2007-2008. Copies of the relevant sale deeds are enclosed along with working of computation of profit on sale of agricultural land. These lands sold are agricultural lands within the .....

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letter calling for information and produce books of accounts, bank statements, vouchers/bills etc. The AR of the assessee, Sri Syed Mansoor, CA, appeared from time to time and produced books of accounts with relevant vouchers/bills etc. and the information with regard to land details etc. After examining the books of accounts and other details at length, the case was discussed with the AR of the assessee. However, upon verification of the balance sheet, the assessee is claiming differed tax liab .....

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