M/S N.R.Company Thru.Shri Deepak Kalra vs. Assistant Commissioner Of Income Tax 3 (1) Indore

W. P. No.4144/2016 W. P. No.4147/2016 W. P. No.4150/2016 & W. P. No.4152/2016 23.06.2016 Shri P. M. Choudhari, learned counsel for the petitioner. Heard on the question of admission. As common questions of law and fact are involved in these writ petitions filed under Article 226 of the Constitution of India, the writ petitions are being decided by this common order. For the sake of convenience, the facts are borrowed from W. P. No.4144/2016. 2. By these writ petitions under Article 226 of the Constitution of India, the petitioner is challenging the re- assessment proceeding initiated by the respondent under Section 147 of the Income Tax Act (in short "the Act"), 1961 on the ground of non-satisfaction of the conditions laid down under section 147 of the Act read with the proviso thereof. 3. Brief facts of the case are that the petitioner/assessee has filed the return of income for the Assessment Year 2009-10 on 30.09.2009, for Assessment Year 2010-11 on 13.10.2010, for Assessment Year 2011-12 on 29.09.2011 and for Assessment Year 2012-13 on 29.09.2012. The assessment under Section 143 (3) of the Act was completed on 24.12.2011and 23.03.2015 and the total income of the petitioner was assessed at Rs.21,86,500/-, Rs.76,130/-. Rs.12,66,600/- and Rs.89,06,690/- respectively. 4. During the course of search proceedings in Apollo Group of Indore, certain documents pertaining to N.R. Company were seized from the office of NRK Group. While perusing the seized documents, it was revealed that N.R. Company had sold the plot of its project "N.R. Estates" between the rate of Rs.250/- to Rs.500/- per square feet. The documents seized from the residential premises of Shri Kamal Goyal had shown that the rates of the said plots were between Rs.1,150/- to Rs.1,311/-. 5. Taking the above rates, the DCIT (Central), Indore has taken an average rate of N R Estates in view of the facts that rates in properties appreciate every year. Accordingly, assessment year-wise average rate of N R Estates is estimated by the wing as under :- Assessment Year Average Estimated Rate 2009-10 500/- per square feet 2010-11 700/- per square feet 2011-12 900/- per square feet 2012-13 1100/- per square feet 6. After calculating the unaccounted income, the Assessment Officer after recording the reason to believe income to the extent of Rs.1,44,68,072/-, Rs.1,16,24,804/- Rs.3,16,01,637/- and Rs.16,02,86,272/- respectively has been escaped from the assessment within the meaning and scope of Section 147 of the Act read with Sections 148 to 153 of the Act. 7. After recording his satisfaction that this is a fit case for re-opening of assessment as the assessee has concealed the income as above and has furnished inaccurate particulars having regard to his income in return filed for the Assessment Year 2009-10, 2010-10, 2011-12 and 2012-13 and issued notice under Section 148 of the Act. 8. Vide letter dated 28.04.2016, the petitioner has raised objection to the reasons recorded by the authority to the validity of the re-assessment proceedings on the ground that the same is barred by time and re-opening of petitioner's assessment is outside the purview of Section 147 of the Act for want of satisfaction of the conditions laid down therein. The authorities after considering the objections of the petitioner passed the impugned order dated 03.06.2016 and held that re-opening proceedings are in order. Para-1 to 6 of the order dated 03.06.2016 reads as under :- 1. Notice issued u/s.148 is very well within the time limit permitted u/s. 149(1)(c) of the Income Tax Act, 1961 and after formation of belief & recording of reasons for escapement of income on the basis of certain documents pertaining to N.R. Company seized from the residential premises of Shri Kamal Goyal during the course of search proceedings in Apollo Group of Indore. Hence, AO was justified in forming the belief of escapement & reopening on the basis of facts brought to the knowledge of revenue during the assessment proceedings for A.Y. 2013-2014. therefore, the reopening proceedings are in order and objection raised by assessee is hereby disposed off. 2. In the seized documents which have been found during the course of search proceedings carried on at the premises of Shri Kamal Goyal containing details of transaction in plot of "N.R. Estate" for the period of 01.01.12 to 20.09.12 at the rate of Rs.1150/- to Rs.1311/-, which provides clear details about the rates at which the transactions have been undertaken by the assessee in the plots of the colony developed and it would be sufficient to hold that the assessee has concealed the income by submitting inaccurate particulars and adopting lower rates of sale of plots. Hence, AO was justified in forming the belief of escapement & reopening. Therefore, the reopening proceedings are in order and objection raised by assessee is hereby disposed of. 3. Formation of belief on the basis of certain documents pertaining to N.R. Company seized from the residential premises of Shri Kamal Goyal during the course of search proceedings in Apollo Group of Indore the reasons for escapement of income was recorded on 11.03.2016 by AO and the same was sent to the appropriate authority i.e. Pr. Commissioner of Income Tax-1, Indore in this case for getting approval. The Pr. Commissioner of Income Tax-1, Indore approved the proposal and communicate this office vide his office letter F.No.Pr.CIT-1/Indore/Tech/Approval148/15-16 dated 18/03/2016 for reopening of case u/s 148 r.w.s. 147 of the IT Act, 1961. The copy of reasons recored which was supplied to assessee was only reproducing the same reasons recorded by AO on 11.03.2016 mentioning the approval accorded by Pr. CIT-1, Indore and notice u/s 148 was issued after getting the approval of prescribed authority. (The copy of reasons recorded by AO alongwith copy of letter for approval accorded by prescribed authority is enclosed.) Therefore, the reopening proceedings are in order and objection raised by assessee is hereby disposed of. 4. The assessment u/s 143(3) of IT Act for the A.Y. under consideration was completed on 14.12.2011 at assessed income of Rs.21,86,500/-. It is pertinent to mention here that the above discussed information was not below the then AO while passing the assessment order u/s 143(3) of IT Act on 14.12.2011. Therefore, the same remained unverified and taking cognizance of the information as per certain documents pertaining to N.R. Company seized from the residential premises of Shri Kamal Goyal during the Course of reasons for escapement of income and taking necessary approval of prescribed authority in accordance with IT Act/Rules, the case was reopened u/s 147 of IT Act. Hence, the initiation of proceedings u/s 147 satisfies the condition laid down u/s 147. Therefore, the reopening proceedings are in order. 5. Further, the assessee stated that the said person i.e. Shri Kamal Goyal is absolutely stranger for assessee and has never acted as broker in any of the sales effected by the assessee in the year under consideration. The merit of submission on this particular point cannot be the subject matter of objection and the issue is required to be dealt during the assessment. The assessment for A.Y. 2013-14 was also completed on similar lines and the assessee has filed appeal before CIT(A)-1, Indore against the findings given by the AO in the assessment order regarding the additions made for the detailed reason mentioned in the assessment order in question and on the basis of which the assessments were reopened in the assessee's case for earlier years. The decision of AO based on information received in this office from other AO is not acceptable to assessee and matter is sub judice before appellate authority. Thus this point is irrelevant as far as disposal of objection is concerned and shall be dealt at the time of assessment proceedings in accordance with act as per information placed on record. 6. In view of forgoing paras the objection raised by the assessee are brushed aside and disposed of as above.