Prayas Goel Vs ACIT (Bombay High Court)
Silent Assessment Order Does Not Mean Sleeping AO: Once a Query Is Raised & Answered, Reopening on the Same Material Is Mere Change of Opinion
Summary:
AO Need Not Write an Essay on Every Accepted Claim: Once Examined, Same Issue Cannot Return Through the Reassessment Door
An assessment order is not expected to resemble an encyclopaedia recording the AO’s discussion and conclusion on every document and every claim examined during scrutiny. Where the assessment records show that the AO had raised specific queries, called for supporting material, examined the assessee’s explanation and thereafter accepted the return, the AO must be regarded as having formed an opinion. The assessment cannot subsequently be reopened on the same facts merely because the order u/s 143(3) does not contain a detailed discussion of the issue.
The assessee, Prayas Goel, had sold 345 shares of Concord Enviro Systems Pvt. Ltd. to AF Holdings, Mauritius. The transaction resulted in capital gains of approximately ₹2.96 crore. The assessee invested the capital gains in a residential property and claimed exemption u/s 54F of the Income-tax Act.
The return was selected for limited scrutiny. During the scrutiny assessment, the AO examined the share transaction in considerable detail. Queries were raised concerning the valuation of the shares, sale consideration, identity and creditworthiness of the Mauritius purchaser and genuineness of the transaction. The AO also examined the assessee’s claim of exemption u/s 54F.
