TMI Blog2017 (8) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... enable the Assessing Officer to examine the applicability of Section 2(22)(e) of the Act. If the Assessing Officer desired to scrutinize this aspect of the matter it was always open for him to call upon the assessee to provide for such details as and when necessary. Revenue heavily relies on the judgement of the Supreme Court in case of Gopal and Sons (2017 (1) TMI 331 - SUPREME COURT) which was delivered long after the assessee filed its return; the original assessment was completed and the Assessing Officer issued the notice for reopening of assessment by recording reasons. Neither the Assessing Officer nor the assessee therefore had the benefit of the judgement of the Supreme Court to guide in the context of either making necessary disclosures, in assessing the assessee’s income or to reopen the assessment. Our High Court in case of Austin Engineering Co. Ltd. (2008 (6) TMI 193 - GUJARAT HIGH COURT) had held that notice for reassessment beyond a period of four years based on subsequent decision of Supreme Court was not valid.In the result, only on this ground, the impugned notice is set aside. - Decided in favour of assessee. - SPECIAL CIVIL APPLICATION NO. 16590 of 2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,00,000/- which as per the assessment record of A.Y. 2007-08 was held at 50% each by Jatin M Gupta and Jayesh Kotak. It is seen that these two individuals are also holding beneficial interest by way of equity share holding exceeding 10% in J P Infrastructure Pvt. Ltd. for the year under consideration. It is also seen that as per balance sheet of J P Infrastructure Pvt. Ltd. for A.Y. 2008-09 the distributable reserves stood at ₹ 7,38,54,215/- in additon to general reserve pf ₹ 3,91,64,000/-. In view of the above, the provisions of section 2(22)(e) are applicable and the amount of ₹ 2,17,24,223/- is liable to be taxed in the hands of assessee company u/s 2(22)(e) of the Act. In view of the above, I have reason to believe that income chargeable to tax has escaped assessment on account of allowance of excess deduction as well as income chargeable to tax escaping assessment and this is a fit case for reassessement by invoking the provisions of section 147 of the Income Tax Act, 1961. 2.2 The petitioner raised objections to the notice for reopening under a communication dated 10.07.2015. Such objections were, however, rejected by an order dated 26.08.2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd rendered in Tax Appeal No. 213 of 2016 . He further submitted that the decision of Supreme Court in case of Gopal and Sons (HUF) vs. Commissioner of Income-Tax reported in [2017] 391 ITR 1 (SC) does not overrule the judgements of Delhi High Court and this court cited above. In any case, the Assessing Officer cannot place reliance on the decision of Supreme Court in Gopal and Sons (supra) since at the time of recording reasons, such judgement was not available to him. In this context, counsel relied on the decision of Supreme Court in case of Deputy Commissioner of Income Tax and Others vs. Simplex Concrete Piles (India) Ltd reported in [2013] 358 ITR 129 (SC) and Bombay High Court judgement in case of IOT Infrastructure and Energy Services Ltd vs. Assistant Commissioner of Income Tax and Another reported in [2011] 332 ITR 587 and this court judgement in case of Austin Engineering Co. Ltd vs. Joint Commissioner of Income -Tax reported in [2009] 312 ITR 70 . 5. On the other hand, on behalf of the department, learned counsel Shri Bhatt opposed the petition contending that the Assessing Officer has recorded proper reasons for issuing notice for reopening. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h case, the assessee was a company which had received a loan from another company. There were persons who were having substantial interest in the assessee company as well as in the lender company. The assessee company was however not a share holder of the lender company. Under such circumstances, the court held that the loan cannot be taxed in the hands of the assessee company as the concept of deemed dividend cannot be extended to a non share holder. This view was followed by our high court in case of Daisy Packers (supra), in case of Mahavir Inductomelt (supra) and also in case of M/s. Amigo Brushes (supra) . These decisions, therefore, adopt a consistent guideline that even with the aid of Section 2(22)(e) of the Act, loan or advance by a lender company cannot be taxed in the hands of an assessee who is not a share holder of such company, even though they may be individuals who may have substantial interest in both the companies. 9. The decision of the Supreme Court in case of Gopal and Sons (supra) however brings in a new dimension to the entire controversy. It was a case in which the assessee was a Hindu Undivided Family. Shares of a company were purchased from the finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Income Tax Act, 1922 wherein there was no provision like Explanation 3. 11. This decision of the Supreme Court in case of Gopal and Sons (supra) undoubtedly brings in an entirely new dimension to the controversy. Reading of paragraph no. 16 suggests at first blush that the court did apply Section 2(22) (e) of the Act in a case where the assessee was not a share holder but the Karta of the assessee HUF having more than 20% right to receive income thereof had substantial interest in the lender company. Before the Supreme Court, decisions of this court and that of Delhi High Court in case of Ankitech P. Ltd. (supra) were not cited. Whether this decision of Supreme Court impliedly overrules all these judgements is a question we are not inclined to go into in the present petition and leave it open to be decided in an appropriate case. 12. This is so because on a limited question of non disclosure of material facts we are not inclined to hold in favour of the petitioner assessee. Notice for reopening of the assessment having been issued beyond a period of four years from the end of relevant assessment year, the failure on part of the assessee to disclose truly and f ..... 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