Just a moment...

Report
FeedbackReport
Bars
×

By creating an account you can:

Logo TaxTMI
>
Feedback/Report an Error
Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
TMI Blog
Home / RSS

2023 (1) TMI 1196

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....as failed to submit truly and fully the entire process of fixing final sugarcane price during the original assessment proceedings N.A 2 On the facts and in circumstances of the case and in law, the CIT(A) has failed to appreciate the fact that the AO has correctly reopened this case as the assessee has failed to disclose fully and truly all the materials regarding the details of purchase made during the regular assessment proceedings and also failed to produce the details of determination of the final price of cane which is paid over and above SMP (Statutory Minimum Price) according to clause 5A of control order,1966 N.A 3 On the facts and in circumstances of the case and in law, the CIT(A) has erred in deleting the disallowance of Rs.24,43,56,633/- mad in the assessment order on account of non business expenditure and transfer of profits by payment of sugarcane purchase which is ought to have paid tax and then distributed it among the farmers. Rs.8,30,81,920/- 4 On the facts and in circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the excess payment made over and above SMP to sugarcane farmers will leads to disallowance under section 37(1) of the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tal Representative (Ld. CIT-DR) for the Revenue after going through the order of Ld. CIT(A) and SCA SCA No. 18784/2014, for assessment year 2007-08 and SCA No. 2373/2015 & 2375/2015 dated 12.06.2015 submits that he relied on the order of Assessing Officer. 4. We have considered the rival submissions of both the parties and have gone through the order of lower authorities. We find that the Assessing Officer re-opened the assessee's case under section 147 issued notice under section 148 dated 18.03.2015 was served upon the assessee. The case of assessee was re-opened on similar set of fact as re-opened for assessment year 2007-08, which has already been quashed by Hon'ble jurisdictional High Court in SCA dated 12.06.2015 by passing the following order:- [9.0] Now, so far as the initiation of impugned reassessment proceedings and the impugned notice under Section 148 of the Act within. 4 years is concerned, it appears that the reopening has taken place only on one ground that the assessee has paid price of sugarcane more than the SMP. It is required to be noted that in all these cases the assessments were completed under Section 143(3) of the Ace after holding necessary inquiry....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... reopen 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 reopen 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 reassess. But reassessment has to be based on fulfillment of certain preconditions 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 Officer. Hence, after ls! April, 1989, the Assessing Officer has power to reopen, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the w....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....id to be distributing the profits. There must be tangible material, available with the Assessing Officer, such as the amount or cane price paid to the cane growers in excess to the SMP either is exorbitant or too excessive and is not justifiable at all and on I the basis of the material available with the Assessing Officer with respect to the cane price paid by other societies it is found that amount of cane price paid by a particular assessee/cooperative society is not justifiable at all, as either it is exorbitant and/or unreasonable, then and then only it can be said that such excess payment of cane price is nothing but distributing the profits and/or passing of the profits. However, for that and for reopening of the assessment on the aforesaid ground, there must be some tangible material available with the Assessing Officer to have a reasonable belief and/or form such an opinion and in that case only the reassessment is permissible At this stage it is required to be noted that as such the SMP declared by the Government, declared under the Control Order is as such in the larger interest of the cane growers and so as to see that the cane growers are not exploited and therefore....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....application of mind and any real finding in the case of the assessee do not constitute valid reason to believe that the income has escaped assessment. Under the circumstances on the aforesaid ground also the impugned reassessment proceedings within 4 years and beyond 4 years deserves to be quashed and set aside. [9.4] At this stage even the provisions of Sugarcane Control Order, 1966 are also required to be referred to. Clause 3 provides for minimum price of sugarcane payable by the producer of the sugar and it provides that the Central Government may, after consultation with such authorities, bodies or associations as it may deem fit, by notification in the Official Gazette, from time to time, fix the minimum price of sugarcane to be paid by producers of sugar or their agents for the sugarcane purchased by them, having regard to (a) the cost of production of sugarcane; (b) the return to the grower from alternative crops and the general trend of prices of agricultural commodities; (c) the availability of sugar to the consumer at a fair price; (d) the price at which sugar produced from sugarcane is sold by producers of sugar; and (e) the recovery of sugar from sugarcane. It is al....