Itxa/666/2016 Of The Pr. Commissioner Of Income Tax-13 v. Popley Diamond And Gold Plaza Pvt Ltd

Priya Soparkar IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.666 OF 2016 The Pr.Commissioner of Income Tax … Appellant V/s. M/s Popley Diamond & Gold Plaza Pvt. Ltd. … Respondent --- Mr.Ashok Kotangle with Ms.Padma Divakar for the Appellant.Mr.Niraj Sheth i/by Mr.Atul Jasani for the Respondent. --- CORAM : AKIL KURESHI AND M.S.SANKLECHA, JJ. DATE : DECEMBER 04, 2018. P.C.:- 1.Revenue has challenged the judgment of Income TaxAppellate Tribunal ("the Tribunal" for short) dated 12[th] August,2015. 2.Following question was presented before us for ourconsideration: “Whether on the facts and in the circumstances ofthe case and in law, the Hon'ble ITAT was correctin cancelling the assessment order u/s 143(3) Priya Soparkar r.w.s. 147 of the I.T.Act for the year underconsideration, holding that notice u/s 148 wasbad in law without appreciating the fact that inthis case no scrutiny assessment was done u/s.143(3) and that the re-opening of the case byway of issuance of notice u/s 148 of the Act wasvery much within the purview of law?” 3. The issue pertains to the Assessment Year 2002-2003 andconcerns the validity of notice of re-assessment issued by theAssessing Officer against the Respondent-Assessee. The Tribunalheld that the re-opening of assessment was invalid. In theimpugned judgment, the Tribunal observed inter-alia that theassessee had entered into a Lease Agreement with its sisterconcern for letting out premises for business purpose alongwithfurnitures, fixtures and equipments for the compensation ofRs.3,00,000/- per annum. The receipt was shown as businessincome since the Assessment Year 2000-2001. In the said year, theassessment had taken place and the assessee's claim was acceptedby the Department. Once again in the Assessment Year 2001-2002 the assessee had offered the receipt as business income,which was also accepted under scrutiny assessment. Notice forre-opening this assessment was issued which was declared Priya Soparkar 34 itxa 666-16-o invalid by the Tribunal on the ground that there was no failureon the part of assessee to disclose fully and truly all materialfacts and that no new material or information had come intopossession of the Assessing Officer after completion of theassessment. 4.Learned counsel for the Revenue may be correct in pointingout that in the present case the Tribunal ought not to haveinvalidated the re-assessment on the ground of no failure ofdisclosure or that no new material was available with theAssessing Officer since the assessment was framed under Section143(1) of the Income Tax Act, 1961 ("the Tribunal" for short). 5.However, as noted the particular claim which the AssessingOfficer wants to revisit through the re-assessment proceedings,is not a new one. It was started by the assessee for the first timein the Assessment Year 2000-2001 and was accepted by theDepartment. Without there being any other change, such issuecould not have been re-issued in the present assessment year,particularly when the claim was also accepted after scrutiny in Priya Soparkar the Assessment Year 2001-2002. 6.In the circumstances, it can be seen that the reason for re-opening the assessment lacks validity or in other words, theAssessing Officer did not have reason to believe that incomechargeable tax had escaped assessment. 7.In the result, Tax Appeal is dismissed. (M.S.SANKLECHA,J.) (AKIL KURESHI,J.) ….