Bakhtawar Construction Co. Pvt. Ltd. Vs DCIT (Bombay High Court)
Bombay High Court held that the reopening notice can be sustained only on the basis of the ground mentioned in the reasons recorded. It is not open to the revenue to add and/or supplement later the reasons recorded at the time of reopening notice. Accordingly, reassessment proceedings set aside.
Facts- The petitioner received notice u/s. 148 of the Income Tax Act based on the reason that petitioner has gifted a flat to Bezan Chenoy as per the Memorandum of family arrangement and thereby, petitioner has resorted to colorable device by way of gift of the said property to avoid tax liability. Therefore, this was a fit case for invoking provisions of Sec. 50C and value as per Stamp Duty-authority at Rs. 4,29,03,292/- was required to be considered as sale consideration and taxed as short term capital gain.
Petitioner’s basic objection was that the issue of applicability of Section 50C of the Act has been considered during the assessment proceedings and hence reopening of the assessment to apply very same Section 50C on the same transaction is not permissible as it will tantamount to change of opinion by respondent no.1 which is not permissible under section 147 of the Act.
Conclusion- Held that the reopening of the assessment by the impugned notice is merely on the basis of change of opinion of the assessing officer from that held earlier during the course of assessment proceedings leading to the assessment order dated 30th September 2010. This change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment.
Held that there can be no tangible material mentioned in the reasons recorded by the revenue which would want a different opinion being taken than which was taken when the original assessment order was passed. As held by this court in Jet Speed Audio (P) Ltd. it is settled law that the reopening notice can be sustained only on the basis of the ground mentioned in the reasons recorded. It is not open to the revenue to add and/or supplement later the reasons recorded at the time of reopening notice.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
