Case: Dempo Brothers Private Limited Vs. Assistant Commissioner of Income Tax Circle 1 (1) &amp; Another

3. The Petitioner is a Company incorporated under the Companies Act. The petition concerns the Assessment YearThe Petitioner had filed its return of income for the Assessment YearThe case was selected for scrutiny. Notices under Sections 143(2) and 142 (1) of the Act were served on the Petitioner. The Petitioner was also served with a questionaire on 19 February 2013, which the Petitioner replied on 22 February 2013, giving certain particulars. The Petitioner gave response to the query raised in the questionaire as regards the sale of shares of Goa Carbon Limited, which according to the Petitioner, was a wholly owned subsidiary of Esmeralda Investments Private Limited. The Assessing Officer called for further particulars by a letter dated 1 March 2013 and after considering the explanation of the Petitioner, passed the scrutiny assessment order on 22 March 2013.4. After lapse of four years, on 29 March 2017, notice was issued to the Petitioner under Section 148 of the Act. The Petitioner sought reasons for reopening of the assessment by letter dated 4 April 2017. Respondent no.1 furnished reasons by letter dated 5 October 2017. In the letter, it was stated that the Petitioner did not produce requisite Form under Rule 29B and the profit from sale of shares of Goa Carbon Limited to Esmeralda Investments Private Limited was not brought to tax. The Petitioner gave his reply to the objections on 13 October 2017, which were rejected by the impugned order dated 9 November 2017. The Petitioner has thereafter filed this present writ petition challenging the reassessment proceedings.has been filed by the Respondents. By order dated 21 February 2018, we had directed that petition will be taken for disposal.

Reasoning: As rightly contended by Mr.Naniwadekar, the Section refers to production of the Form from an accountant along with the original assessment. This requirement, therefore, is at the time of original assessment. But the matter of the Petitioner had travelled much further than that stage. The Petitioners case was taken in scrutiny and the Petitioner was specifically called upon to respond the certain queries, which the Petitioner did.10. Mr. Naniwadekar right in contending that the Petitioner has placed all the primary facts before the Assessing Authority namely that the concerned Company was a wholly owned subsidiary Company and the transfer share does not amount to transfer. After disclosing this position, the Assessing Officer accepted the explanation of the Petitioner. The Apex Court in the case of Gemini Leather Store Vs. Income Tax Officer,and others [(1975) 100 ITR 1 (SC)   has observed that in every assessment proceeding the assessing authority will, for the purpose of computing or determining the proper tax due from an assessee, require to know all the facts which help him in coming to the correct conclusion. From the primary facts in his possession, whether on disclosure by the assessees, or discovered by him on the basis of the facts disclosed, or otherwise, the assessing authority has to draw inference as regards certain other facts; and ultimately from the primary facts and the further facts inferred from them, the authority has to draw the proper legal inferences. It was held that once all the primary facts are before the assessing authority he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else, far less the assessee, to tell the assessing authority what inferences, whether of facts or law, should be drawn. The Apex Court has thus concluded that the Income Tax Officer in that case thus had all the material facts before him when he made the original assessment and he cannot now take recourse to Section 147(a) to remedy the error resulting from his own oversight.11. Thus, if the primary facts are placed before the Assessing Officer, the Assessing Officer is in a position to take decision thereupon, it cannot amount to failure on the part of the assessee to withhold to furnish the material particulars. The Assessing Officer, in the impugned order has referred to various decisions, however, none of the decisions lay down that even though the primary facts were placed before the Assessing Officer at the time of scrutiny, on account ofof the Form at the time of the original assessment, the assessment can be reopened, neither any such decision is brought to our notice.12. Therefore, we are of the opinion that the Petitioner had placed on record the necessary information for the purpose of assessing income as regard the transfer of shares. What is sought to be done by the Assessing Officer now is a reopening of assessment after four years, on a mere change of opinion. Theof the Form is only an excuse given by the Assessing Officer to attempt to exercise an nonexistent power.