Case Law Details
CA Prarthana Jalan
Hon’ble Delhi ITAT has in the case of ACIT V/s M/s Responsible Builders Pvt. Ltd in ITA No. 2726/Del /2011 has held that it is trite law that in order to determine whether there are reasons to believe that the income got escaped the assessment, one has to look at the reasons recorded by the Assessing Officer before the issuance of notice under Section 148 of the Act. For before invoking the re-assessment proceedings the A,O has to record the reason as to how income has escaped assessment and not conclusions.
In the case the assessee was engaged in the business of investments and finance, Regular assessment u/s 143 (3) was done than the A.O initiated re-assessment proceedings to reassess the short term capital gains as business income. The re-assessment proceedings were quashed by the Hon’ble Tribunal and while looking in the facts of the case the Hon’ble Tribunal observed that the reasons recorded for initiating re-assessment were not reasons but the conclusions as under
In the present case, we are required to adjudicate upon whether the reassessments proceedings are properly launched by the Assessing Officer or vitiated by mere change of the opinion. We find from the material available on record that the very same issue was considered by the Assessing Officer at the time of original assessment. The Assessing Officer had raised a specific query, as to why the short term capital gains should not be treated as business income.
After consideration of reply filed by the assessee, the Assessing Officer accepted the claim. Further, it is trite law that in order to determine whether there are reasons to believe that the income got escaped the assessment, one has to look at the reasons recorded by the Assessing Officer before the issuance of notice under Section 148 of the Act. In this case, the reasons recorded by the Assessing Officer are as follows:
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