9911796707
TMI Blog2023 (11) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... notice issued by the 3rd respondent, Exts.P21 order and Ext.P22 penalty notice issued by the 4th respondent. The petitioner is also seeking a writ of mandamus to declare the re-assessment proceedings initiated by the 3rd and 4th respondents as without jurisdiction. 2. The petitioner, an assessee under the provisions of the Income Tax Act 1961 (for short, 'the IT Act'), filed returns of its income for the Assessment Year 2014-15 on 26.11.2014. The petitioner's case was selected for scrutiny under the Computer Aided Scrutiny System (CASS), and a notice under Section 143(2) of the IT Act was issued to the petitioner on 18.09.2015. According to the petitioner, the petitioner had acquired the business of 'National Wood Products' as a going conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the shares, and the aggregate consideration received for such shares exceeds the fair market value of the shares and the same would be chargeable to income tax as 'Income from Other Sources'. It was also said that the Certificate issued by the Chartered Accountant (Ext.P6) was dated 31.03.2013, whereas the net asset value of the Company adopted was on the date 30.06.2013, and therefore, the valuation made by the external Chartered Accountant was not correct. 2.4 The 3rd respondent was of the view that there was no full and true disclosure made by the petitioner at the stage of assessment, which had led to the escapement of income from the assessment in the relevant Assessment Year. The 3rd respondent issued a notice dated 05.07.2021 u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner submits that the issue of valuation of shares was the subject matter of the Original Assessment under Section 143(3) of the IT Act, which was concluded vide Ext.P7 order. After examination of the Share Valuation Certificates, the Assessing Authority decided not to make any assessment with reference to Section 56 of the IT Act while passing the Ext.P7 original Assessment Order. It is submitted that when the subject matter of fair valuation of shares at the time of original assessment proceedings, reopening in respect of shares valuation would amount to a change of opinion by the Assessing Authority. And, on the basis of a change of opinion, a notice under Section 148 of the IT Act for re-opening the assessment proceedings can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, twin conditions are to be satisfied: (i) escapement of income and (ii) non-disclosure on the part of the assessee. In the present case, the petitioner has made all disclosures before the Assessing Authority. In view thereof, even if the inferences drawn by the Assessing Authority at the time of the original assessment based on the disclosures made by the petitioner are inconsistent with the statutory provisions, re-opening of the assessment is not permitted, invoking the larger period of limitation. In support of the said submission, learned Counsel for the petitioner has placed reliance on the judgment in the case of The Parashuram Pottery Works Co. Ltd. v. The Income Tax Officer, Cirlce-1 (1977) 1 SCC 408. 3.3 Furthermore, learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des that the production of books of accounts or other evidence before the Assessing Officer from which material evidence could, with due diligence, be discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the 'proviso' to Section 149. The petitioner's case is one falling within the meaning of 'proviso' to Section 147 in the light of Explanation 1 to Section 147, and therefore, there is no substance in the submission that the assessment has been re-opened merely on the basis of 'change of opinion'. 4.2 Sri Christopher Abraham furthermore submits that the re-assessment proceedings have now culminated in the passing of the impugned Ext.P21 assessment order against which the statutory remedy of app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the conclusion that whether the re-opening of the assessment is based on a mere change of opinion or the Assessing Authority has reason to believe that the income in the hands of the assessee has escaped assessment because of the non-disclosure of fully and truly all material facts necessary for assessment. The reasons recorded by the Assessing Officer would disclose that the Assessing Officer has formed an opinion and has the belief that the income in respect of the transfer of the petitioner's shares while acquiring 'National Woods Products' had escaped assessment under Section 56(2)(viib) of the IT Act. The reasons recorded by the Principal Commissioner of Income Tax to accord sanction for the issue of notice under Section 148 cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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