Notice for reopening U/s. 148 cannot be issued in absence of fresh material

Elecon Engineering Company Ltd. Vs. Asst. CIT (Gujarat High Court)

In this case in the queries itself raised during Original Assessment, the assessing officer pointed out that the assessee had purchased immovable property of Rs. 50.72 lacs and sold such property for Rs. 66.34 lacs. It was in response to such a query that the assessee replied pointing out that two different agreements of mutual exchange of land were executed on 17-11-2008. Subsequently, both these agreements were cancelled by a deed dated 12-3-2009 which was also registered. Thus there was no legal or valid transfer of the land during the year under consideration and therefore, the assessee had not made any transaction of sale of land. It was after such scrutiny that the assessing officer framed assessment wherein no demand of capital gain tax was raised. If the view of the assessing officer was that once the land was sold through a exchange deed, the assessee was liable to pay capital gain, irrespective of the subsequent cancellation of the deed, he ought to have taxed such income in the order of assessment. The fact that the assessee had executed such documents and not offered any income of capital gain to tax was thus within the knowledge of the assessing officer. Without there being anything additional, such issue cannot be reexamined in exercise of powers of reassessment. As noted, the letter dated 24-10-2003 of the assessing officer of Shri Ashwin B. Patel may prima facie, give an impression that such facts were being brought to the notice of the present assessing officer for the first time, but as noted, the queries raised by the assessing officer during the original assessment and the replies of the petitioner would show that all these details were very much part of the record.

JUDGMENT

Akil Kureshi, J.

The petitioner has challenged a notice dated 29-3-2014 by which the respondent no. 1 assessing officer sought to reopen the assessment of the petitioner for the assessment year 2009-10.

Please become a Premium member. If you are already a Premium member, login here to access the full content.