Case Law Details
Rakesh Ambalal Patel Vs ITO (ITAT Ahmedabad)
We have perused the assessment order and the order of the CIT(A) as well as the materials placed on record and referred to in terms of Rule 18(6) of the Income Tax (Appellate Tribunal) Rules, 1963. On perusal, we observe that at the time of original assessment proceedings, what was at the command of the AO was a sale deed executed by the seller assessee showing an agreed sale consideration of Rs.8Lakhs accruing to assessee on sale of property in question. It is claimed on behalf of the assessee that receipt issued by the registering authority showing registrable value at Rs.13,19,000/- was part of the record and hence, by necessary implication, it means that the AO had applied its mind to the aforesaid fact in the earlier assessment proceedings while admitting the capital gains as declared by the assessee with reference to the actual sale consideration. The aforesaid plea of the assessee does not detain us to think differently. Merely because some figures are written somewhere in a bundle of voluminous papers/document placed before the AO, it cannot, in our considered view, automatically mean that the AO has understood the purport of whole gamut of facts and figures. The assessee is under solemn duty to correctly apply the provisions of the Act and in case of a different stand taken on a particular issue, it is further duty of the assessee to properly disclose the relevant facts. The assessee has failed to show that the adoptable value of the property in sale under s.50C of the Act was put to the notice of the AO and reasons were cited for departure therefrom. The difference between the deemed full value of consideration accruing to the assessee as a result of transfer of property and the apparent sale consideration as recorded in the sale agreement is not found to be considered by AO. No explanation for vast difference in the sale consideration qua adoptable value is discernible from the record. Hence, the AO was in no position to accept or reject the sale consideration declared by the assessee in its return of income for the purpose of capital gains. Pertinently, no enquiry was shown to be made by the AO from the perspective of applicability of Section 50C of the Act or otherwise on the issue of computation of capital gains in the original proceedings. In the circumstances, it is difficult to record a finding of fact that a legitimate opinion on applicability or otherwise of Section 50C of the Act has been tested on facts by the AO in the original proceedings. Agreeably, Section 147 does not postulate conferment of the power upon the AO to initiate re-assessment proceedings upon a mere ‘change of opinion’ on a given issue. However, where it is found on fact that the AO has not examined the issue enjoined by the applicable law i.e. 50C of the Act, it would be axiomatic to say that the AO has not formed any opinion previously on the issue. The assessee has neither disclosed relevant details in the return of income in this regard nor has the AO opined as to how a vast difference between the deemed full value of consideration and apparent sale consideration cannot be brought within the ambit of Section 50C of the Act in the original assessment proceedings.
The doctrine of ‘change of opinion’ can plausibly come to the rescue of the assessee only when the AO has taken one of the permissible views at the time of original proceedings. The assessment order passed without taking note of the relevant facts and without appreciating law thereon cannot be equated with a valid formation of opinion. In the instant case, it is a case of omission to consider the deemed sale consideration and to form a bonafide opinion on substitution thereof by apparent sale consideration for the purposes of assessments of capital gains in original assessment proceedings. Hence, the assessee cannot claim a vested right arising from a palpably erroneous conclusion owing to non-consideration of significant fact having direct bearing on escapement of income. If a relevant fact not examined in original proceedings on the basis of which the re-assessment proceedings are sought to be initiated and came to the light of the AO subsequent to the original assessment, the doctrine of ‘change of opinion’ propounded by judicial fiat cannot act as embargo for exercise of powers under s.147 of the Act. The judgment relied upon in the case of Inarco Lted. (supra) is clearly distinguishable. In that case, it was recorded on facts by Tribunal that the issue of computation was subject matter of enquiry. However, in the instant case, it is found that while determining the capital gains the deemed sale consideration relevant to provision of Section 50C of the Act has not been seen at all. Mere production before AO of sale deed alongwith receipt of Registering Authority which encompasses some figures representing value on which stamp duty is payable will not, in the absence of anything more, necessarily amount to disclosure for the purpose presuming formation of opinion.
We thus concur with the view taken by the CIT(A) and hold that where the relevant facts have been overlooked and has not taken cognizance of, resulting in escapement of chargeable income, such omission would not constitute ‘change of opinion’. In the absence of any other contention, we do not see any merit in the plea of assessee towards wrongful usurpation of jurisdiction under s.147 of the Act.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
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