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TMI Blog2024 (3) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... s escaped assessment and calling upon the petitioner to file return of income within a period of 30 days from the date of service of the impugned notice. 4. The facts in nutshell are that for the Assessment Year 2013-14, the petitioner filed original return of income on 31.07.2013 declaring total income of Rs. 2,21,500/-. The petitioner had claimed exemption under Section 54F of the Act against capital gain of Rs. 3,75,85,296/- out of the sale proceeds received by the petitioner from the sale of shares of Paras Inn Pvt. Ltd by depositing the same in Capital Gains Deposit Scheme. 4.1. The case of the petitioner was selected for scrutiny assessment and notices under Section 142(1) of the Act was issued on 07.03.2016, requiring the petitioner to submit the details with regard to the exemption claimed under Section 54F of the Act. The petitioner justified the claim of exemption in his letter dated 09.03.2016 along with the details. The Assessing Officer after considering such details passed an Assessment Order dated 18.03.2016 under Section 143(3) of the Act by making addition of Rs. 45,29,458/- to the return income being disallowance of cost in relation to the sale of shares . 4.2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income for the year had escaped assessment and the petitioner was asked to file return of income within 30 days from the date of service of the notice. 4.8. The petitioner by letter dated 26.09.2019 requested the respondent no. 1 to accept the return filed under Section 139(1) of the Act as return filed in response to notice under Section 148 of the Act. The respondent no. 2 thereafter provided a copy of the reasons recorded by letter dated 07.04.2021. 4.9. On perusal of the reasons recorded, it appears that the Assessment Year 2016-17 was reopened as the Assessing Officer on scrutinising the assessment record for the Assessment Year 2015-16, formed a belief that the claim of exemption under Section 54F of the Act made by the petitioner by investing sale consideration received on sale of shares of Paras Inn Pvt. Ltd. for the purchase of small house along with large area of open land is improper and proportionate claim under Section 54F of the Act is required to be withdrawn by charging the amount under the head "Capital Gain" in the Assessment Year 2016-17, in view of the provisions contained in Section 54F(4) of the Act. 4.10. The petitioner filed objection by letter dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act was accepted. It was pointed out that the petitioner has preferred an appeal against the disallowance made in the assessment order passed under Section 143(3) of the Act before the CIT(Appeals). 5.1. Learned advocate Mr. Shah also invited the attention of the Court to the documents pertaining to the scrutiny assessment for Assessment Year 2015-16, as the Assessing Officer, during the course of regular assessment for Assessment Year 2015-16, has called for the details with regard to the purchase of the property made by the petitioner during the previous year and called for the details with regard to the utilization of the amount invested in capital gains deposit scheme against the claim made under Section 54F of the Act in the Assessment Year 2013-14. 5.2. It was also submitted that by show-cause notice dated 13.11.2017, the details were called for with a proposal to reject claim under Section 54F of the Act on the ground that the petitioner did not purchase residential house but purchased two opened non-agricultural plots and addition under Section 56(2)(vii)(b) of the Act was also proposed being difference between the purchase consideration paid and the stamp valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 148 of the Act as no separate valuation is mentioned in the sale deed for small house purchased by the petitioner along with the open plots and the same was not considered by the Assessing Officer while passing the Assessment Order for Assessment Year 2015-16 and in view of the provision of Section 54F(4) of the Act, such purchase of open plots amounting to Rs. 3,57,85,296/- as claimed by the assessee with small construction of residential house would not be considered for deduction under Section 54F of the Act. It was submitted that the period of three years in the present case expires on 30.01.2016 for claiming the deduction under Section 54F of the Act and therefore the Assessing Officer has assumed the jurisdiction for forming an opinion that the amount of capital gains which was not utilized by the assessee as per section 54F(4) of the Act but was deposited in capital gains deposit scheme shall be charged to the capital gains in Assessment Year 2016- 17. 7. It was further submitted that when the Assessing Officer has issued the impugned notice under Section 148 of the Act within four years, the assessee can raise all the contentions during regular course of assessment as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or [two years] after the date on which the transfer took place purchased, or has within a period of three years after that date [constructed, one residential house in India] (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,- (a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: [Provided that nothing contained in this sub-section shall apply where- (a) the assessee,- (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or (ii) pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset: Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,- (i) the amount by which- (a) the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of the new asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9], 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 reopen 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 re-open. 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 re-assess. But reassessment has to be based on fulfillment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening 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 1st April, 1989, Assessing Officer has power to re-open, provided there is "tangibl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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