TMI Blog2021 (3) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 80GGA of the Act. Writ-applicant claimed the deduction under Section 35(1)(ii) of the Act in the revised return dated 26.02.2014, and the assessment order, under Section 143(3) of the Act was passed on 15.10.2012 considering the revised return. Therefore, it cannot be said that the writ-applicant had failed to disclose, truly and fully, all the material facts so as to claim the deduction of 175% by showing the income as the business income. On perusal of the reasons recorded, it appears that the Assessing Officer has changed his opinion with regard to the claim of assessee without considering the provisions of Section 80GGA read with Section 35(1)(ii) which provides deduction in respect of certain donation for the scientific research or rural development to any research association or institution, approved for the purpose of clause (ii) of Sub-section (1) of Section 35 of the Act. The writ-applicant has claimed deduction under Section 35(1)(ii) of the Act and not under Section 80GGA of the Act. This fact is also disclosed by the assessee in the revised return. When there is no failure on the part of the petitioner-assessee to disclose, truly and fully, material fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.3) The Assessing Officer passed the assessment order dated 15.10.2015 accepting the returned income. Thereafter, notice under section 148 of the Act, 1961 dated 28.3.2018 came to be issued for reopening calling upon the assessee to show cause why the reassessment should not be carried out as the Assessing Officer had reasons to believe that income had escaped assessment for the assessment year 2013-2014 within the meaning of section 147 of the Act, 1961. 3.4) The reasons recorded by the Assessing Officer, under Section 148(2) of the Act, are as under: Reasons recorded u/s. 148(2) of the I.T.Act The return of income was filed on 30.07.2013 declaring total income of ₹ 29,72,118/-. Thereafter, the case was selected for scrutiny and order u/s. 143(3) of the Act was passed on 15.10.2015 assessing the total income at ₹ 29,72,118/-. On verification of the record, the assessee had received and repaid loan from and to Hiramoti Tex Chem P. Ltd. From the records it is observed that the assessee was having 34% shareholding in the Company. From the ledger account of Sh.Amrish H. Parikh in the books of company Hiramoti Tex Chem P. Ltd. it is seen that as o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o without any proof. Further, on verification of the revised return, it is noticed that the assessee did not claimed deduction u/s. 35(1)(ii) in the revised return too. On further verification of revised return it is noticed that the assessee had again claim deduction under Chapter VI-A i.e. the Chapter in which section 80GGA falls. Therefore, deduction at 100% only was allowable as against 175% allowed and as such 75% of deduction was required to be disallowed. In view of the above, I have reasons to believe that the income chargeable to tax to the extent of ₹ 57,49,123/- (₹ 50,74,123/- + ₹ 6,75,000/-) has escaped assessment by reason of failure on part of the assessee to disclose fully and truly all material facts necessary for that assessment year. Therefore, this is a fit case for initiating proceedings u/s.147 of the Act for A.Y.2013-14. Accordingly, notice u/s.148 of the I.T.Act is issued for AY 2013-14. 3.5) The writ-applicant filed his objections dated 23rd October, 2018. The objections are as under: 2) The assessee filed the return of income of AY 2013-14 on 30.07.2013 disclosing income at ₹ 29,72,118/-. The return was thoro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orty [2018] 94 taxmann.com 244 (Culcutta). It is submitted that the assessee has also paid and received interest on such current account transactions with the company. Even the Jurisdictional High Court in GOLDJYOTI POLYMERS (TAX APPEAL NO.455 of 2017) has decided the issue on identical grounds against the revenue. It is therefore submitted that the reasons recorded are erroneous and therefore no income has escaped assessment. (Copy of ledger account showing movement of Funds, Copy of ledger account interest and copy of judgement of Culcutta High Court and Gujarat High Court are attached herewith). 5. It is therefore submitted that the reasons recorded and the subsequent notice issued are bad and illegal and therefore may be dropped at once. 3.6) The objections lodged by the writ-applicant came to be disposed of by the Assessing Officer vide order dated 29th October 2018. The order reads thus: 3. The objections raised by the assessee against issue of notice u/s. 148 and re-assessment proceedings have been considered carefully. As per the settled position of law, reasons for reopening of the assessment have been recorded before issue of notice u/s 148 of the Act, in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for by the Assessing Officer during the course of the scrutiny assessment proceedings to point out that in respect of both the issues for which the impugned notice for re-opening is issued, the Assessing Officer at the time of framing the assessment under section 143(3) of the Act, 1961, had raised specific queries and the writ-applicant had answered the same and on being satisfied, the Assessing Officer did not add any income as deemed income while allowing deduction under section 35(1)(ii) of the Act, 1961. Mr. Soparkar further submitted that with regard to the issue of deemed income under section 2(22)(e) of the Act, pursuant to the queries raised by the Assessing Officer at the time of scrutiny assessment, the writ-applicant had submitted the ledger accounts of Hiramoti Texchem Pvt. Ltd. which indicated continuous movement of funds. Mr. Soparkar has placed reliance upon the decision of the Calcutta High Court in the case of Commissioner of Income-tax, Kolkatta-1 v. Gayatri Chakraborty reported in 303 CTR 541 (Calcutta), wherein in the facts of the said case, the mutual transactions went on throughout the previous year and as on the last date of previous year, the accounts we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual reports, audited Profit and Loss account and balance sheet along with the return of income, yet the requisite, full and true disclosure of all the material facts necessary for assessment was not disclosed and therefore, the writ-applicant could be said to have failed to disclose his holding in the company as also the accumulated profit received by him resulting into escapement of income chargeable to tax. It was submitted that since there was no business income shown in the original return, the writ-applicant was not eligible for deduction at the rate of 175% of the donation amount under section 35(1)(ii) of the Act, 1961 and the deduction of donation ought to have been restricted upto 100% only. In such circumstances referring to above Ms.Bhatt prays that there being no merit in this writ application the same be rejected. 9. Having heard the learned advocates appearing for the respective parties and having gone through the materials on record, the only question that falls for our consideration is whether we should quash the impugned notice. 10. We are of the view that the impugned notice for reopening could be said to have been issued without there being any tangible mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer to make a back assessment, but in section 147 of the Act [with effect from 1st April, 1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re- open the assessment. Therefore, post-1st April, 1989, power to re-open is much wider. However, one needs to give a schematic interpretation to the words reason to believe failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of mere change of opinion , which cannot be per se reason to reopen. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to reassess. But re-assessment has to be based on fulfillment of certain precondition and if the concept of change of opinion is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. One must treat the concept of change of opinion as an in-built test to check abuse of power by the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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