TMI Blog2021 (7) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... 151 was granted by the competent authority in a mechanical manner. The only requirement for initiating the proceedings under Section 147 beyond the period of 4 years is that the subjective satisfaction of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner on the reasons recorded by the Assessing Officer explaining the circumstances under which according to the Assessing Officer it was a fit case for issuance of notice under Section 148 of the Act. Entire recording of reasons to believe formed by the Assessing Officer were produced before the sanctioning authority and after going through the entire reasons recorded by the Assessing Officer the sanction was granted by him. Therefore, all the conditions prescribed under Section 151 of the Act were followed in stricto sensu. We find that re-opening of the assessment proceeding was conducted on the basis of legally valid sanction accorded by the authority under provisions of Section 151 of the Act. In regard to the argument that the present case falls within the ambit of change of opinion and, therefore, the reassessment proceeding initiated is not maintainable, it has already be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was discussed in detail with the Assessing Officer and opportunity of personal hearing was granted to the petitioner. Accordingly, an assessment order recording all relevant facts and figures was passed by the respondents. It is putforth that the respondents have sought to reopen the same transaction 3. The learned counsel for the petitioner submits that no any tangible material came to the notice of the respondents and, therefore, there was no failure on the part of the petitioner to disclose any information during course of the original assessment proceedings. It is further submitted that approval for reassessment has been given merely in a mechanical manner. The re-assessment proceeding in the case of the petitioner is clearly a case of change of opinion and review of the earlier assessment proceeding and, therefore, the same is impermissible. Learned counsel for the petitioner further submits that law pertaining to reassessment proceedings has been settled by various judgements of the High Courts and the Supreme Court. The stage of invoking the writ jurisdiction is the stage when objection of the assessee has been disposed of in contravention to the settled jurispruden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant petition. According to the petitioner the objections filed by the petitioner have been disposed of by the respondents in a mechanical manner and, therefore, the reassessment proceeding in the present case is illegal. Learned counsel for the petitioner strenuously urged that the reassessment proceedings in the present case are of a clear case of change of opinion and the respondents desired to review the assessment order in the garb of reassessment, which is impermissible. It is argued with vehemence that the reassessment proceedings in this case are bad in law and there is no failure on the part of the petitioner to truthfully disclose all the material facts. The reassessment proceedings in this case are injudicious, as the same have been initiated on the realm of change of opinion, borrowed satisfaction and based on audit objections. It is argued that the reassessment proceeding initiated by the respondent is in absence of any fresh tangible material. It is further contended that the reassessment proceedings in this case are bad in law, as the approval has been given in a mechanical manner. 8. To buttress his submission, the learned counsel for the petitioner relied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Section 50C are not applicable when the asset is not a capital asset. In the present case the impugned land sold is a rural agricultural land and not an urban agricultural land. 11. It is pleaded that merely because the petitioner has shown the transaction under the capital gain, does not mean that the petitioner can be penalised. It is trite law that if an any assessee, under a mistake, misconception or on not being properly instructed is over assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected. Reliance in this regard has been placed on the decision rendered in the case of Balmukund Charaya (supra) . 12. Combating the aforesaid submissions the learned counsel for the respondents submitted that the case of the petitioner is governed by substantive provision of Section 147 of the Act, where all that is required is that the Assessing Officer should prima facie have some material on the basis of which there should be reason to believe of certain income chargeable to tax has escaped assessment. The aspect of sufficiency of material at this stage, initiation of reassessment proceedings under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd the learned counsel for the parties and bestowed our anxious consideration on the arguments advanced on behalf of the parties. We do not perceive any merit in the writ petition. The respondents have recorded cogent and plausible reasons while rejecting the objections raised by the petitioner against initiation of the assessment proceedings under sections 147 and 148 of the Act for the Assessment Year 2014-15. They have given detailed reasons for initiation of the reassessment proceedings against the petitioner, which we think apt to reproduce : 1. In paragraphs 1 to 3 of your letter, you have stated only the facts and the same do not require any comments. 2. In paragraph No.4, it has been stated that since the impugned land was agricultural in nature, the same did not fall within the ambit of section 2(14)(iii) of the Act and was thus not liable to capital gain and further even the AO in the assessment order has accepted the impugned land as agricultural. This objection is without any basis because your have yourself shown capital gain of ₹ 3,95,950/- on the said land in the ITR. Further, as the AO while completing the assessment did not take into consideration this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ITR you had shown LTCG at ₹ 3,40,128/- after taking into consideration the apparent consideration of the impugned land at ₹ 1,20,00,000/- while the same should have been worked out by taking into consideration the market value of ₹ 1,47,97,000/- as per the Stamp Valuation Authority in view the provisions of section 50C of the Act. Thus, there was apparent failure on your part to disclose fully and truly all the material facts in the ITR as well as during the course of original assessment proceedings. Accordingly, this objection is also not acceptable. Further the reliance placed by you in the judgment of various Hon ble Courts have no bearing in your case. 6. In para No.8, you have contended that there was no application of mind by the AO while recording the reasons for reopening. This objection also has no force because while recording the reasons under section 147 of the Act, complete facts were mentioned and the escapement of LTCG was worked out at ₹ 42,03,436/- in view of the provisions of section 50C of the Act after due application of mind. 7. In paragraph No.9, it has been stated by you that only reasons justify the reopening. There is no d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 143(3) of the Act on the touchstone of the reasons to believe mentioned at 119 of the petition as well as order dated 24-5-2021 by which objection of the petitioner has been disposed of, would show that the reassessment proceeding initiated is not mere change of opinion , but based upon additional facts which were not at all taken into consideration by the assessing authority. Initiation of the reassessment proceedings was started by issuance of notice under Section 148 of the Act. Those proceedings are yet to be concluded, as no assessment order has been passed. Yet in this case, only objection filed by the petitioner has been decided. The petitioner will have effective and efficacious remedy against the said assessment order. Reassessment proceeding has been initiated on the basis of material having direct bearing over the case of the assessee which is based on the reason to believe which was recorded by the assessing authority. Further, there is no merit in the contention of the learned counsel for the petitioner that sanction under Section 151 of the Act was granted by the competent authority in a mechanical manner. The only requirement for initiating the proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral land and does not fall within the purview of Section 2(14) of the Act and hence, not liable for capital gain. This act of the petitioner per se is contrary in nature and, therefore, based on tangible material the Assessing Officer has initiated the reassessment proceedings, and if the same is examined on the touchstone of reason to believe for issuance of notice under Section 148 of the Act recorded by the Assessing Officer. A bare reading of the reason to believe , would show that the twin requirement of Section 147 of the Act that the Assessing Officer prima facie have some material on the basis of which there should be reason to believe that certain income chargeable to tax has escaped assessment. 20. In view of the preceding analysis, it is luminescent from the record that re-assessment proceeding has been initiated on the basis of the material which has given rise to reason to believe as well as escapement of assessment has been quantified by the Assessing Officer. 21. We do not perceive any illegality in the reassessment proceeding, which has been initiated against the petitioner by the respondents under Section 148 of the Act for the Assessment Year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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