COMMISSIONER OF INCOME TAXEXEMPTIONS vs. RAJASTHAN HOUSING BOARD JAIPUR

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ITA/345/2017HC RajasthanRJHC02065502201729 November 20173 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arises from the order of the ITAT. The Court referred to its own decision in Tax Appeal No. 193/2017 and the Supreme Court's decision in Commissioner of Income Tax-VI, New Delhi vs. Usha International Ltd. [2012] 25 taxmann.com 200 (Delhi)(FB). The Court noted that the Supreme Court in Usha International Ltd. dealt with the concept of 'change of opinion' in the context of Section 147 of the Act. 'Change of opinion' implies that the Assessing Officer had formed an opinion in the initial assessment proceedings under Section 143(3) and subsequently proposed to take a different view in the reassessment proceedings. It involves the formation of a belief by an Assessing Officer resulting from his understanding, experience, and reflection on a particular issue. The High Court found that the ITAT's decision was in line with these precedents, implying that the ITAT had correctly addressed the issue of 'change of opinion' and the validity of the reassessment. Consequently, the appeal filed by the department was dismissed.

What were the facts?

The appellant, Commissioner of Income Tax (Exemptions), Jaipur, has filed an appeal against the order of the Income Tax Appellate Tribunal (ITAT). The ITAT had dismissed the department's appeal, thereby upholding the assessee's position. The assessee is the Rajasthan Housing Board. The appeal concerns assessment proceedings initiated under Section 147/143(3) of the Income Tax Act, 1961. The dispute involves additions made by the Assessing Officer on account of Contingency and Equalization Reserve, and profit on sale of auctioned property. The ITAT's decision to quash the assessment and delete these additions is under challenge.

What were the issues?

1. Whether on the facts and circumstances of the case and in law, the learned ITAT was correct in quashing the assessment completed under Section 147/143(3) of the IT Act, 1961, raising a question of law as to the interpretation of Explanation (1) to Section 147 of the IT Act, 1961. 2. Whether on the facts and in the circumstances of the case and in law, the learned ITAT was correct in deleting the addition of Rs. 11,97,65,913/- made on account of Contingency and Equalization Reserve? 3. Whether on the facts and in the circumstances of the case the Hon’ble ITAT was correct in deleting the addition of Rs. 5,01,09,174/- made on account of profit on sale of auctioned property? Assessee's arguments: Not recorded in the judgment. Revenue's arguments: The revenue contended that the ITAT erred in quashing the assessment and deleting the additions. The revenue framed the above questions of law. The revenue relied on the decision of the High Court in Tax Appeal No. 193/2017 (Commissioner of Income Tax vs. Rajasthan Housing Board) and the Supreme Court decision in Commissioner of Income Tax-VI, New Delhi vs. Usha International Ltd. [2012] 25 taxmann.com 200 (Delhi)(FB).

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 345 / 2017 Commissioner of Income Tax (Exemptions), Kailash Heights, 3rd Floor, Lal Kothi, Tonk Road, Jaipur-302015 ----Appellant Versus Rajasthan Housing Board, Janpath, Jyoti Nagar, Jaipur ----Respondent _____________________________________________________ For Appellant(s) : Mr. Daksh Pareek for Mr. Sameer Jain For Respondent(s) : Mr. Sanjay Jhanwar _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS

Judgment 29/11/2017

1.

By way of this appeal, the appellant has assailed the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal of the department.

2.

Counsel for the appellant has framed following substantial questions of law:- “i) Whether on the facts and circumstances of the case and in law, the ld. ITAT was correct in quashing the assessment completed u/s 147/143(3) of the IT Act, 1961, as it raised question of law as to the interpretation of explanation (1) to section 147 of the IT Act, 1961. ii) Whether on the facts and in the circumstances of the case and in law, the ld. ITAT was correct in deleting the addition of Rs. 11,97,65,913/- made on account of Contingency and Equalization Reserve? iii) Whether on the facts and in the circumstances

(2 of 3) [ITA-345/2017] of the case the Hon’ble ITAT was correct in deleting the addition of Rs. 5,01,09,174/- made on account of profit on sale of auctioned property?”

3.

However, in view of the decision of this Court in Tax Appeal No. 193/2017 (Commissioner of Income Tax vs. Rajasthan Housing Board) decided on 27th November, 2017 and another decision of the Supreme Court in case of Commissioner of Income Tax-VI, New Delhi vs. Usha International Ltd. [2012] 25 taxmann.com 200 (Delhi)(FB) wherein it has been held as under:- “6.The questions of law at serial Nos. 1 to 3 referred to the Full Bench are inter-connected. They deal with the term and facets of the term "change of opinion". The expression "change of opinion" postulates formation of opinion and then a change thereof. In the context of Section 147 of the Act it implies that the Assessing Officer should have formed an opinion at the first instance, i.e., in the proceedings under Section 143(3) and now by initiation of the reassessment proceeding, the Assessing Officer proposes or wants to take a different view.

8.

In the context of assessment proceedings, it means formation of belief by an Assessing Officer resulting from what he thinks on a particular question. It is a result of understanding, experience and reflection to use the words in Law Lexicon by P. Ramanatha Aiyar. Question of change of opinion arise when an Assessing Officer forms an opinion and decides not to make an addition or holds that the assessee is correct and accepts his position or stand.”

4.

In view of the above, no substantial question of law arises.

5.

Hence, the appeal stands dismissed. (VIJAY KUMAR VYAS)J. (K.S. JHAVERI)J.

(3 of 3) [ITA-345/2017] A.Sharma/100

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