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TMI Blog2022 (7) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.25,92,480/- was determined pursuant to the order dated 27.12.2011 passed by the Assessing Officer. 2.2 Thereafter, the case was reopened and notice under Section 148 of the Act was served upon the respondent assessee on 26.03.2014. In response to the notice, the respondent Company assessee had submitted its reply. On 31.05.2014, the Assessing Officer had issued notice under Section 142(1) of the Act thereby calling upon the respondent Company assessee to explain and furnish the details regarding loss of sale and purchase of shares. The respondent Company assessee had submitted its objections thereby drawing attention of the Assessing Officer that in the scrutiny assessment, the aforesaid aspect has been examined in detailed by the Assessing Officer and it is case of mere 'change of opinion'. It was further contended by the assessee that no new tangible material is brought on record which confer jurisdiction on AO to proceed for re-asessment. Thus, the assessee had requested the AO to drop the proceedings by claiming that the sale and purchase of shares are in fact genuine transactions and having incurred business loss may kindly be considered accordingly. The loss of purchase a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. The Appellate Tribunal also reappreciated the issue of deleting the disallowance of loss claimed by the assessee on the sale and purchase of the shares and held that considering the various documents placed by the assessee on record, the transactions cannot be termed as sham transactions. 2.6 Being aggrieved and dissatisfied with the aforesaid decision of the Appellate Tribunal, the Revenue has preferred this present appeal. 3. The Revenue Department has raised following substantial questions of law for determination of this Court: [A] "Whether the Appellate Tribunal has erred in law and on facts in confirming the order of CIT(A) quashing the notice issued under section 148 of the Act and treating the order passed u/s. 143(3) r.w.s. 147 of the Act as invalid, without taking cognizance of the decision of Hon'ble Supreme Court in the case of CIT vs. PVS Beedies Pvt. Ltd. reported in (1999) 237 ITR 13 (SC) wherein it is held that when apparently legal mistake is found to have been committed by the Assessing Officer, reopening of assessment is legally permissible?" [B] "Whether the Appellate Tribunal has erred in law and on facts in confirming the order of CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the point of 'change of opinion' of revenue. 6. Mr. Bhatt, has further submitted that if apparent legal mistake is noticed by the Assessing Officer, it can be reopened as held by the Supreme Court in the case CIT(A) Vs. EVs Bidies Private Limited reported in (1997) 237 ITR (SC). Mr. Bhatt further tried to defend the original order of reassessment passed by the Assessing Officer by contending that disclosure of facts by the assessee during the assessment proceedings cannot be said fully and truly and therefore, the Assessing Officer was within its power to initiate proceedings for reassessment. Mr. Bhatt further submitted that during the course of reassessment proceedings before the Assessing Officer, the assessee had failed to produce the relevant documents to establish share transactions to be genuine. In such circumstances, both the Appellate Tribunal as well as CIT (A) have grossly erred and have failed to appreciate the nature of transactions in absence of evidence being treated by the Assessing Officer as colourable device with an intent to reduce the tax liability. 7. On the other hand, Ms. Noopur Shah, the learned counsel appearing for the respondent Company - origina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase and sale of shares were compiled and further supporting documents in nature of various letters forming part of the record of the original assessment proceedings and other materials seems to have been re-looked at the stage of initiation of reassessment proceedings. Thus, the CIT (A) has arrived at finding that the same cannot be said to be new tangible material, which has come on record to consider the case for reopening. Similarly, the Appellate Tribunal at the outset has considered the aforesaid issue of jurisdiction of the Assessing Officer for reopening. Ultimately, the Tribunal upon appreciation of the reasons recorded by the respective authorities as well as upon re-appreciation of the supporting documents placed on record has arrived at finding that the material available at the stage of initiation of reassessment proceedings was very much available on record of the original assessment proceedings and therefore, held that no new tangible material had come on record giving jurisdiction to the Assessing Officer for initiation of reassessment proceedings. 9. So far as merits of the matter are concerned, the Department had contended before the Appellate Tribunal that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notice issued by the Assessing Officer at the stage of reassessment cannot be a reason to discard the evidences placed by the assessee. Even otherwise we could notice that the aforesaid transactions were looked into by the Assessing Officer during the original assessment and upon due compliance of the procedure envisaged under the Act. The Assessing Officer at the stage of original assessment was satisfied about the genuineness of such share transactions and had thereafter permitted the loss claimed by the assessee towards the share transactions. 11. We are in complete agreement with the findings recorded by the Tribunal that even otherwise the assessee being transferor of shares cannot be subjected to tax in the instant case, more particularly, considering the amendment brought by the Legislation on the statute book in the form of Sections 50CA and 56(2)(x)of the Act, which is applicable with effect from 01.04.2018 and 01.04.2017 respectively. The conjoint reading of both sections, clearly provides that the tax liability if any, arise in such kind of transactions will be applicable in the hands of recipients and no liability can be imposed on the transferor of shares. 12. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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