ITO Vs Taj Land Developers and Promoters Pvt. Ltd. (ITAT Chandigarh)
ITAT Chandigarh held that reopening of assessment on the basis of factually incorrect facts and reasons without application of mind and without verification of facts cannot be sustained in the eyes of law. Accordingly, reopening quashed and appeal of revenue dismissed.
Facts- The present appeal is preferred by the revenue. It is mainly contested that CIT(A) has erred in quashing the assessment order by holding that re-opening by issuance of a notice u/s 148 of the Income Tax Act is invalid.
Conclusion- Hon’ble Bombay High Court in the case of Tata Sons Ltd. has held that if the reasons for reopening the assessment is based on incorrect facts or conclusions, certainly the notice issued for reopening cannot be sustained. Moreover, if according to Respondent No. 1 only the sale of shares of TCS Ltd. was ‘business income’ and not ‘profits arising of sale of investment’ to say that the amount of Rs. 22,71,25,79,374/- has escaped assessment, also indicates non-application of mind. We would also go a step ahead and observe that if only the approving authority under Section 151 of the Act had considered the reasons properly, either he would have directed Respondent No. 1 to re-work on the reasons or would not have granted the approval.
