TMI Blog2018 (4) TMI 1532X X X X Extracts X X X X X X X X Extracts X X X X ..... tiation of reassessment proceedings on the basis of facts and materials already disclosed in course of the original proceedings. First of all, the materials on record relied upon by the Appellate Commissioner and the Appellate Tribunal clearly indicate that the question whether the land was agricultural land or not was considered at the time of initial assessment. The Appellate Commissioner as also the Appellate Tribunal clearly held that there was an opinion found at the time of initial assessment. Appeal dismissed - Decided against the revenue. - Tax Case (Appeal) No. 2 of 2018 - - - Dated:- 27-2-2018 - Ms. Indira Banerjee, CJ And Abdul Quddhose, JJ. For the Appellant : Mr.T.R.Senthil Kumar Standing Counsel JUDGMENT ( Delivered by Ms. Indira Banerjee, Chief Justice ) This appeal is against an order dated 26.4.2017 passed by the Income Tax Appellate Tribunal B Bench, Chennai, dismissing the appeal being I.T.A.No.174/Mds/2017 filed by the Revenue against an order dated 25.10.2016 passed by the Commissioner of Income Tax (Appeals) 15, Chennai, allowing the appeal of the respondent assessee being Appeal No.ITA.No.048/CIT(A)-15/2015-16 against an order of re- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Explanation 1. Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2. For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely: (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. 5. The relevant assessment year being 2008-09, any proceedings for re-assessment under Section 147 of the said Act would necessarily have to be commenced within four years from the end of the relevant assessment year i.e., 31.03.2013, unless it could be shown that the circumstances enumerated in the proviso existed. 6. It is nobody's case that the income chargeable to tax had escaped assessment for the assessment year in question by reason of the failure on the part of the assessee to make a return under Section 139 or in response to a notice under sub-section (1) of Section 142 or Section 148 of the said Act. 7. The question is whether the respondent assessee failed to disclose fully or truly all material facts for her assessment for the assessment year in question. The Appellate Commissioner and the Appellate Tribunal have in effect, concurred in their factual finding that she did not fail to disclose material facts necessary for assessment. 8. The Appellate Commissioner by his order dated 25.10.2016 found that an audit objection had been raised by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. On 21.12.2010, the assessee had furnished to the Department, a copy of the document relating to the sale of agricultural land which showed that ₹ 10,00,000/- was paid to the assessee as development charges. The Addl. Commissioner thereafter deputed an inspector to inspect the property to confirm if the land in question was agricultural land. The property was inspected on 22.12.2010 (Wednesday). The land is situated 50 kms. from Chennai, 6 kilometers from the Tiruporur Sub Registrar's Office at 24 Kms from the Chingleput municipality. The inspector later visited the VAO's office at Tiruporur to verify the chitta and adangal to gather some information on the nature of crop grown. The land is located approximately 1 kilometer from the main road and falls well outside municipal limits. The adangal issued by the VAO showed that paddy was cultivated on this land during the relevant period (pasali 1416). A copy of the adangal was furnished to the Department on 27.12.2010. The development charges included inter-alia planting of coconut saplings, putting up barbed wire fence, sprinkles, building a road leading into the site from the main road. It was only after th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ins, the Assessing Officer had clearly mentioned in the assessment order that after scrutinizing the details filed, the assessment is completed accepting the income returned . 12. The Appellate Commissioner very rightly held that for the valid initiation of the re-assessment proceedings, the Assessing Officer had to justify that the decision to issue notice under Section 148 of the said Act was based on discovery of new and tangible material that led to the conclusion that there had been escapement of income. The Appellate Commissioner did not find the case to be so. 13. The Appellate Commissioner found that the only new development, post original assessment, was the Revenue Audit objection extracted herein above. As the verification of records clearly indicated that the issue had been examined threadbare by the Assessing Officer during the course of the original assessment proceedings, the re-assessment was only an outcome of the audit objection. The Inspector's report categorically mentioned that the land was used for agricultural purpose during the period from 1.4.2007 to 31.3.2008. 14. Being aggrieved by the aforesaid decision of the Appellate Commissioner, the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. ACIT, reported in (2011) 239 CTR 303 (All.) and in CIT v. Pradeshiya Industrial Investment Corporation of Uttar Pradesh Ltd., reported in (2011) 332 ITR 324 (All.). 18. In Calcutta Discount Company Ltd. v. ITO, reported in (1961) 41 ITR 191(SC), a Constitution Bench of the Supreme Court held that the Assessing Authority had to draw inferences regarding other facts from the primary facts in his possession, whether on disclosure by the assessee, or discovered by him on the basis of facts disclosed, or otherwise. The Assessing Authority ultimately has to draw proper, legal inferences from the primary facts and further facts and ascertain the proper tax leviable, on a correct interpretation of the taxing enactment. It is not for anybody else, far less the assessee, to tell the Assessing Authority what inferences, whether of facts or of law should be drawn. The Supreme Court observed that it was the duty of the assessee to disclose all primary relevant facts. The Supreme Court observed that the duty of the assessee did not extend beyond disclosure of primary relevant facts. If from primary facts more inferences could be drawn, it would not be possible to say that the assessee sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of initial assessment. 23. The proposition, that change of opinion is no ground for reopening of assessment, which is well-established and well-settled, also finds support from the following judgments: 1. Binnani Industries Ltd. v. ACIT, reported in (2007) 6 VST 783 (SC). 2. M.J. Pharmaceuticals v. DCIT, reported in (2008) 297 ITR 119 (Bom.). 3. Niba India Ltd. v. Smt. Arti Honda, reported in (2008) 300 ITR 283 (Bom.). 4. Cartini India Ltd. v. ACIT, reported in (2009) 314 ITR 275 (Bom.). 5. Manjusha Estate Pvt. Ltd. v. ITO, reported in (2009) 314 ITR 263 (Guj.) 6. CIT v. Jagson Intemational Ltd., reported in (2010) 321 ITR 544 (Del.). 24. In all the aforesaid cases, the Courts held that there could be no justification in law in initiation of reassessment proceedings on the basis of facts and materials already disclosed in course of the original proceedings. 25. On behalf of the Revenue, the learned standing counsel strongly argued that the Assessing Officer had not formed any opinion at the time original assessment. When there was no opinion, there could be no question of change of opinion. The original assessment order was not reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X
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