Shri Navinbhai T. Bhanushali, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-1(3), RAJKOT-GUJARAT

CO 12/RJT/2014

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5825 (ITAT-RAJKOT)
• Duration Of Justice: 4 year(s) 4 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 07-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 18-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DM RINDANI
• Keywords: Reopening of assessment; Search and seizure; Bonafide belief; Tangible material; Difference of opinion; Reason to believe; Change of opinion
• Section: 143(3); 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI WASEEM AHMED, ACCOUNTANT MEMBER I.T.A. NO.364/RJT/2014 & CO NO.12/RJT/2014 ( IN ITA NO.364/RJT/264 ) (ASSESSMENT YEAR : 2006-07) THE ITO WARD-1(3) RAJKOT VS. SHRI NAVINBHAI T BHANUSHALI C/;O. M/S.BHARAT OIL COMPANY MORBI ROAD, RAJKOT [PAN NO. ABCPB 8702 D] ( APPELLANT ) .. ( RESPONDENT & CROSS OBJECTOR ) APPELLANT BY : SHRI PRAVEEN VERMA, SR.DR RESPONDENT BY : SHRI D.M. RINDANI, AR DATE OF HEARING 26/10/2018 DATE OF PRONOUNCEMENT 07/12 /2018 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANC E OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)J AMNAGAR [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)/JAM/353/11-12 DATED 12.03.2014 A RISING IN THE ASSESSMENT ORDER PASSED UNDER S.144 R.W.S.147 OF THE INCOME TAX ACT, 1961(HEREINAFTER REFERRED TO AS 'THE ACT') DATED 23.12.2011 RELEVANT TO ASSESSMENT YEAR (AY) 2006-07 AND THE ASSESSEE FILED CROSS OBJECTION DATED 18.07.2014 IN THE REVENUES APPEAL. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- - 2 - ITA NO.364/RJT/2014 (BY REVENUE) & CO NO.12/RJT/2014 (BY ASSESSEE) ITO VS. SHRI NAVINBHAI T.BHANUSHALI ASST.YEAR 2006-07 1. THE BRIEF FACT OF THE CASE IS THAT THE ASSESSMENT U/S.144 R.W.S.147 OF THE ACT IN THE STATUS OF AOP WAS FINALIZED ON 23.12.2011 DETERMI NING TOTAL INCOME OF THE ASSESSEE AT RS.68,95,789/-. 2. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE A LONG WITH THREE OTHER CO-OWNERS IN THE NAME & STYLE OF M/S.BHANUSHALI BROTHERS SOLD LA ND FOR RS.1,74,63,312/- TO NATIONAL HIGHWAYS AUTHORITY OF INDIA (NHAI). AS THE ASSESSE E HAD NOT OFFERED ANY INCOME ARISING OUT OF THE ABOVE TRANSFER, THE AO WORKED O UT INCOME OF RS.68,95,789/- AFTER ALLOWING DEDUCTION OF COST OF PURCHASE AND DEVELOPM ENT OF THE ABOVE LAND AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND IN ITS CROSS OBJECTION:- 1. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS), J AMNAGAR ERRED IN DISMISSING THE GROUND RELATING TO ISSUE OF NOTICE U/S.148 AND THUS ERRED IN UPHOLDING VALIDITY OF REOPENING OF ASSESSMENT MADE U/S.147 OF THE ACT. 4. FIRST, WE TAKE UP THE CROSS OBJECTION FILED BY THE ASSESSEE. THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THE ASSESSMENT FRAMED U/ S. 147 OF THE ACT. 5. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THE REASON RECORDED BY THE ASSESSING OFFICER FOR RE-OPENING TH E ASSESSMENT U/S.147 OF THE ACT WHICH READS AS UNDER:- THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF PETROLEUM OIL AND LAND DEVELOPMENT. IT IS NOTICED FROM THE RECORDS THAT THE ASSESSEE A LONG WITH 3 PERSONS PURCHASED LAND ON 29.12.2003 SITUATED AT VILLAGE ANANDPAR KNOWN AS RA MDHAM PARK WHICH WAS SCHEME FOR RESIDENTIAL PURPOSE. CONSEQUENT UPON ACQUISITION O F THE SAID LAND BY THE NHAI, THE ASSESSEE AND 3 OTHER PERSONS CANCELLED THE AGREEMEN TS MADE WITH THE OTHER PARTIES AND PAID COMPENSATION RS.11,60,631/-. THE ASSESSEE ALONGWITH 3 OTHER PERSONS INCURRED EX PENDITURE OF RS.89,92,703/- TOWARD DEVELOPMENT WORKS AND ENTERED INTO AGREEMENT WITH O THER PERSONS FOR SALE OF PLOTS. THE EXPENSES OF RS.89,72,703/- INCLUDED COMPENSATION PA ID TO OTHER PARTIES, SALARY AND MISCELLANEOUS, EXPENSES, CONSULTING FEES, ROAD DEVE LOPMENT AND LAND LEVELING AND ALL THESE EXPENSES WERE MADE IN THE NAME AND STYLE OF M/S.NAV INCHANDRA BROTHERS DURING THE PY RELEVANT TO AY 2006-07. FURTHER IT IS POINTED OUT THAT THE ASSESSEE ALONG WITH 3 PERSONS WAS CARRYING ON BUSINESS OF DEVELOPMENT AND SALE OF PLOTS AND HENCE THE LAND PU RCHASED BY THE ASSESSEE AND OTHER - 3 - ITA NO.364/RJT/2014 (BY REVENUE) & CO NO.12/RJT/2014 (BY ASSESSEE) ITO VS. SHRI NAVINBHAI T.BHANUSHALI ASST.YEAR 2006-07 WERE TO BE TREATED AS STOCK IN TRADE AND NOT AS INV ESTMENT IN ASSETS. ACCORDINGLY THE ASSESSEE SHOULD HAVE FILED THE RETURN OF INCOME IN THE CAPACITY AOP, AND NO RETURN OF INCOME IN THE CAPACITY OF AOP FILED. IN VIEW OF THE ABOVE FACT AND CIRCUMSTANCES, THERE FORE I HAVE REASONS TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 6. IN VIEW OF ABOVE, THE ASSESSING OFFICER ISSUED A SHOW-CAUSE NOTICE U/S 148 OF THE ACT. THE ASSESSEE, IN COMPLIANCE TO THE NOTICE, ISS UED U/S 148 OF THE ACT FILED A RETURN OF INCOME DECLARING TOTAL INCOME AT NIL ALONG WITH THE SUBMISSION VIDE LETTER DATED 08.09.2011 AS REPRODUCED BELOW. 1. NO ASSOCIATION OF PERSONS WAS FORMED BY MR. NAV INBHAI T. BHANUSHALI IN RESPECT OF THE IMPUGNED LAND AND HENCE IN THE BONAFIDE BELIEF OF M R. NAVINBHAI, NO TAXABLE INCOME CAN BE SAID TO ARISE IN THE STATUS OF AOP. THEREFOR E, THE PRESENT RETURN IS FILED WITHOUT PREJUDICE, SHOWING RETURN OF INCOME OF RS.NIL. 2. NO ACQUISITION OF THE LAND HAS TAKEN PLACE BY NHAI. THE IMPUGNED LAND PORTIONS HELD BY THE RESPECTIVE OWNERS HAVE BEEN SOLD TO NHAI. 3. MR. NAVIN T. BHANUSHALI HAS ALREADY BEEN ASSESSED T O TAX BY THE DEPT. FOR THE SAME ASSESSMENT YEAR, VIDE ORDER DATED 19-12-2008 PASSED U/S 143(3) OF THE ACT, WHEREIN THE CAPITAL G GAIN ARISING TO MR. NAVIN T. BHANUSHALI O UT OF SAME LAND HAS BEEN ASSESSED TO TAX AT RS.27,60,105/-. THE ASSESSED TAX HAS ALSO BEEN FULLY PAID. THUS, THERE CANNOT BE DOUBLE TAXATION OF SAME INCOME IN STATUS OF AOP NOW. 4. NO PAN HAS BEEN OBTAINED IN THE NAME OF ANY AOP BY ANY NAME AND HENCE THERE IS NO OPTION BUT TO FILE THIS RETURN WITHOUT PREJUDICE AN D WITHOUT PAN. 5. IT IS AGAINST THE ABOVE BACKGROUND AND BONAFIDE BEL IEF BASED ON PURCHASE AND SALE DOCUMENTS OF THE LAND AND ASSESSMENT ALREADY MADE B Y DEPT. THAT THE PRESENT RETURN OF INCOME SHOWING NIL INCOME IN THE STATUS OF AOP IF F ILED. 6. THE NOTICE U/S 148 WAS SERVED AT THE ADDRESS OF MR. NAVINBHAI T. (BHANUSHALI AND THEREFORE THIS RETURN HAS BEEN SIGNED BY HIM. 7. THE PRESENT RETURN AND ITS VERIFICATION PORTION MAY BE CONSIDERED IN THE LIGHT OF THE AFORESAID NOTES AND EXPLANATION. - 4 - ITA NO.364/RJT/2014 (BY REVENUE) & CO NO.12/RJT/2014 (BY ASSESSEE) ITO VS. SHRI NAVINBHAI T.BHANUSHALI ASST.YEAR 2006-07 7. IN VIEW OF THE ABOVE, THE LD. AR FURTHER CLAIMED THAT THE ASSESSMENT ORDER FRAMED U/S 147 OF THE ACT IS NOT SUSTAINABLE AND PLACED HI S RELIANCE ON THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF P.R. EASWARAN VS. ITO REPORTED IN (1969) 72 ITR 263(MAD.). 8. ON THE OTHER HAND, LD. DR VEHEMENTLY SUPPORTED T HE ORDERS OF THE LOWER AUTHORITIES. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ON PERUSAL OF THE REASONS RECORDED BY THE AO IT REV EALED THAT I. AS PER THE AO THE ASSESSEE SHOULD HAVE FILED THE RETURN OF INCOME IN THE CAPACITY OF AOP. ACCORDINGLY THE NOTICE WAS ISSUED UNDER SECTION 148 OF THE ACT TO SHRI NAVIN T. BHANUSALI (AOP) VIDE DATED 17- 03-2011. II. THE STATUS OF THE ASSESSEE WAS TREATED AS AOP B Y THE AO. III. IN THE REASONS RECORDED FOR INITIATING THE PRO CEEDINGS UNDER SECTION 147 OF THE ACT THE PAN OF THE INDIVIDUAL NAMELY SHRI NAVIN T. BHANUSALI WAS RECORDED. IV. SIMILARLY THE INCOME ASSESSED IN THE HANDS OF S HRI NAVIN T. BHANUSALI AT RS. 29,26,712 AS EVIDENT FROM THE ASSESSMENT ORDER FRAM ED UNDER SECTION 143(3) OF THE ACT WAS TREATED BY THE AO IN THE REASONS REC ORDED AS THE INCOME OF THE AOP. THE COPY OF THE ASSESSMENT ORDER UNDER SECTION 143 (3) OF THE ACT OF SHRI SHRI NAVIN T. BHANUSALI IS PLACED ON PAGES 7 T O 9 OF THE PAPER BOOK. V. AS PER THE AO THE ASSESSMENT ON THE AOP WAS ALSO MADE IN THE EARLIER YEARS AS OBSERVED IN COLUMN NO. 7 OF THE REASONS RECORDED . VI. AS PER THE AO THE ASSESSEE IS ENGAGED IN THE BU SINESS OF TRADING OF PETROLEUM OIL AND LAND DEVELOPMENT. 9.1 HOWEVER WE NOTICE CERTAIN DEFECTS IN THE REASON S RECORDED BY THE AO AS DETAILED BELOW. A) THERE WAS NO DOCUMENTARY EVIDENCE BROUGHT ON RECORD BY THE AO SUGGESTING THAT THE ASSESSEE IS AN AOP. - 5 - ITA NO.364/RJT/2014 (BY REVENUE) & CO NO.12/RJT/2014 (BY ASSESSEE) ITO VS. SHRI NAVINBHAI T.BHANUSHALI ASST.YEAR 2006-07 B) THE NOTICE WAS ISSUED TO ONLY ONE PARTY AS DISCUSSE D WHEREAS THERE ARE TOTAL 4 PARTIES WHICH SOLD THE IMPUGNED LAND. C) THE INCOME OF SHRI NAVIN T. BHANSULI WAS TREATED TH E INCOME OF THE AOP WHICH HAS ALREADY BEEN TAXED IN THE HANDS OF THE SHRI NAV IN T. BHANSULI IN THE ASSESSMENT FRAMED UNDER SECTION 143(3) OF THE ACT. D) THERE WAS NO DETAIL JUSTIFYING THAT THE ASSESSMENT HAS BEEN MADE IN THE HANDS OF AOP IN THE EARLIER YEARS. E) THERE WAS NO PAN ALLOTTED IN THE NAME OF AOP. F) SHRI NAVIN T. BHANSULI IS NOT ENGAGED IN THE BUSINE SS OF TRADING OF PETROLEUM OIL AND LAND DEVELOPMENT. 9.2 IN VIEW OF ABOVE WE DRAW CONCLUSION THAT THE FO RMATION OF BELIEF OF THE AO FOR THE ESCAPEMENT OF INCOME OF THE AOP WAS NOT BASED ON TH E TANGIBLE MATERIALS. IN OUR CONSIDERED VIEW THERE HAS TO BE LIVE-LINK BETWEEN T HE REASONS RECORDED BY THE AO WITH THE INCOME OF THE ASSESSEE WHICH ESCAPED ASSESSMENT. HO WEVER IN THE CASE ON HAND WE NOTE THAT THERE WAS NO MATERIAL ON RECORD SUGGESTING THA T THE ASSESSEE IS THE AOP. IN THE INSTANT CASE ONUS LIES ON THE AO TO PROVE THAT THERE WAS AN AOP AND ITS INCOME HAS ESCAPED ASSESSMENT. IN THIS REGARD WE FIND SUPPORT AND GUID ANCE FROM THE JUDGMENT OF SUPREME COURT OF INDIA IN CASE OF KALVINATOR OF INDIA LTD. REPORTED IN 320 ITR 561 WHEREIN IT WAS HELD AS UNDER: 4. ON GOING THROUGH THE CHANGES, QUOTED ABOVE, MADE T O SECTION 147 OF THE ACT, WE FIND THAT, PRIOR TO DIRECT TAX LAWS (AMENDMENT) ACT, 198 7 , RE- OPENING COULD BE DONE UNDER ABOVE TWO CONDITIONS AND FULFILMENT OF THE SAID CON DITIONS ALONE CONFERRED JURISDICTION ON THE ASSESSING OFFICER TO MAKE A BACK ASSESSMENT, BU T IN SECTION 147 OF THE ACT [WITH EFFECT FROM 1-4-1989], THEY ARE GIVEN A GO-BY AND ONLY ONE CONDITION HAS REMAINED, VIZ., THAT WHERE THE ASSESSING OFFICER HAS REASON TO BELIEVE T HAT INCOME HAS ESCAPED ASSESSMENT, CONFERS JURISDICTION TO RE-OPEN THE ASSESSMENT. THE REFORE, POST 1-4-1989 , POWER TO REOPEN IS MUCH WIDER. HOWEVER, ONE NEEDS TO GIVE A SCHEMAT IC INTERPRETATION TO THE WORDS 'REASON TO BELIEVE' FAILING WHICH, WE ARE AFRAID, SECTION 1 47 WOULD GIVE ARBITRARY POWERS TO THE ASSESSING OFFICER TO RE-OPEN ASSESSMENTS ON THE BAS IS OF 'MERE CHANGE OF OPINION', WHICH CANNOT BE PER SE REASON TO REOPEN. WE MUST ALSO KEE P IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWER TO REVIEW AND POWER TO RE-ASSESS. THE ASSESSING OFFICER HAS NO POWER TO - 6 - ITA NO.364/RJT/2014 (BY REVENUE) & CO NO.12/RJT/2014 (BY ASSESSEE) ITO VS. SHRI NAVINBHAI T.BHANUSHALI ASST.YEAR 2006-07 REVIEW; HE HAS THE POWER TO REASSESS. BUT REASSESSM ENT HAS TO BE BASED ON FULFILMENT OF CERTAIN PRE-CONDITION AND IF THE CONCEPT OF 'CHANGE OF OPINION' IS REMOVED, AS CONTENDED ON BEHALF OF THE DEPARTMENT, THEN, IN THE GARB OF RE-O PENING THE ASSESSMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF 'CHANGE OF OPI NION' AS AN IN-BUILT TEST TO CHECK ABUSE OF POWER BY THE ASSESSING OFFICER. HENCE, AFTER 1-4 -1989 , ASSESSING OFFICER HAS POWER TO REOPEN, PROVIDED THERE IS 'TANGIBLE MATERIAL' TO CO ME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASONS MUST HAVE A LIVE LINK WITH THE FORMATION OF THE BELIEF. OUR VIEW GETS SUPPORT FROM THE CHANGES MADE TO SECTION 147 OF THE ACT, AS QUOTED HEREINABOVE. UNDER THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987 , PARLIAMENT NOT ONLY DELETED THE WORDS 'REASON TO BELIEVE' BUT ALSO INSE RTED THE WORD 'OPINION' IN SECTION 147 OF THE ACT. HOWEVER, ON RECEIPT OF REPRESENTATIONS FRO M THE COMPANIES AGAINST OMISSION OF THE WORDS 'REASON TO BELIEVE', PARLIAMENT RE-INTRODUCED THE SAID EXPRESSION AND DELETED THE WORD 'OPINION' ON THE GROUND THAT IT WOULD VEST ARB ITRARY POWERS IN THE ASSESSING OFFICER. WE QUOTE HEREINBELOW THE RELEVANT PORTION OF CIRCUL AR NO. 549 , DATED 31-10-1989, WHICH READS AS FOLLOWS : '7.2 AMENDMENT MADE BY THE AMENDING ACT, 1989, TO R EINTRODUCE THE EXPRESSION 'REASON TO BELIEVE' IN SECTION 147. A NUMBER OF REPRESENTATIO NS WERE RECEIVED AGAINST THE OMISSION OF THE WORDS 'REASON TO BELIEVE' FROM SECTION 147 AND THEIR SUBSTITUTION BY THE 'OPINION' OF THE ASSESSING OFFICER. IT WAS POINTED OUT THAT THE MEAN ING OF THE EXPRESSION, 'REASON TO BELIEVE' HAD BEEN EXPLAINED IN A NUMBER OF COURT RULINGS IN THE PAST AND WAS WELL SETTLED AND ITS OMISSION FROM SECTION 147 WOULD GIVE ARBITRARY POWE RS TO THE ASSESSING OFFICER TO REOPEN PAST ASSESSMENTS ON MERE CHANGE OF OPINION. TO ALLA Y THESE FEARS, THE AMENDING ACT, 1989 , HAS AGAIN AMENDED SECTION 147 TO REINTRODUCE THE EX PRESSION 'HAS REASON TO BELIEVE' IN PLACE OF THE WORDS 'FOR REASONS TO BE RECORDED BY H IM IN WRITING, IS OF THE OPINION'. OTHER PROVISIONS OF THE NEW SECTION 147, HOWEVER, REMAIN THE SAME.' 9.3 IN THE ABSENCE OF TANGIBLE DOCUMENTARY EVIDENCE WE HOLD THAT THERE WAS NO EXISTENCE OF THE AOP AS ALLEGED BY THE AO. THEREFOR E THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT TO THE ASSESSEE AS AOP IS INVALID. THERE FORE IN THE GIVEN FACTS AND CIRCUMSTANCES WE HOLD THAT THE ASSESSMENT FRAMED UNDER SECTION 14 7 OF THE ACT IS NOT SUSTAINABLE. THUS THE GROUND RAISED IN THE CO BY THE ASSESSEE IS ALLO WED. 9.4 BESIDES THE ABOVE, EVEN ON MERIT WE ALSO NOTE T HAT THE AMOUNT OF CAPITAL GAIN HAS ALREADY BEEN TAXED IN THE HANDS OF THE ASSESSEE IN HIS INDIVIDUAL CAPACITY. THEREFORE, IN OUR CONSIDERED VIEW, THE SAME CANNOT BE TAXED AGAIN IN THE HANDS OF THE AOP AS HELD BY THE - 7 - ITA NO.364/RJT/2014 (BY REVENUE) & CO NO.12/RJT/2014 (BY ASSESSEE) ITO VS. SHRI NAVINBHAI T.BHANUSHALI ASST.YEAR 2006-07 HONBLE MADRAS HIGH COURT IN THE CASE OF P.R. EASWA RAN(SUPRA), WHEREIN IT WAS HELD AS UNDER:- WE RESPECTFULLY ADD THAT THE ABOVE PRINCIPLE IS EQ UALLY APPLICABLE TO AN ASSOCIATION OF PERSONS. MR. BALASUBRAHMANYAN, HOWEVER, REFERRED TO THE DECISION OF THE SUPREME COURT IN INCOME-TAX OFFICER V. BACHU LAL KAPOOR [1966] 60 ITR 107 . THIS WAS A CASE WHERE THE FACT OF THE EXISTENCE OF A JOINT FAMILY WAS KEPT BA CK FROM THE KNOWLEDGE OF THE INCOME-TAX OFFICER AND IN THOSE CIRCUMSTANCES, THE LEARNED JUD GES HELD THAT IT WOULD BE A CLEAR CASE OF THE FAMILY'S INCOME ESCAPING ASSESSMENT. IN FACT, W HILE CONSIDERING THE RELEVANT PROVISIONS, SUBBA RAO J. (AS HE THEN WAS), POINTEDLY MADE A REF ERENCE TO THE OPTION OR ELECTION AVAILABLE TO THE INCOME-TAX OFFICER WHILE DEALING W ITH A MEMBER OF AN ASSOCIATION OF PERSONS TO ASSESS EITHER THE ASSOCIATION OF PERSONS OR THE MEMBERS OF THE ASSOCIATION INDIVIDUALLY. THE VIEW EXPRESSED BY US GAINS SUPPOR T ALSO FROM THE RATIO IN THE CASE OF JOTI PRASAD AGARWAL V. INCOME-TAX OFFICER [1959] 37 ITR 107 , WHERE AGAIN THE PRINCIPLE WAS THAT, ONCE THE INCOME OF THE ASSOCIATION WAS CHARGE D TO INCOME-TAX IN THE HANDS OF THE MEMBERS INDIVIDUALLY AND THE ASSESSMENTS OF THE MEM BERS REMAINED AS VALID ASSESSMENTS, THERE COULD BE NO FRESH ASSESSMENT OF THE INCOME IN THE HANDS OF THE ASSOCIATION. THE IMPACT OF THE ABOVE JUDICIAL PRECEDENTS ON THE FACTS OF THE CASE MAY THEN BE CONSIDERED. THE RULE ASKED FOR BY THE PETITIONER IS IN THE NATURE OF A WRIT OF PROHIBITION. IT POSTULATES A PATENT WANT OF JURISDICTION ON THE PAR T OF THE RESPONDENT. THE JURISDICTIONAL FACT, WHICH IS ESSENTIAL TO VEST JURISDICTION IN TH E RESPONDENT TO RE-OPEN A FINAL ASSESSMENT, APPEARS TO US TO BE THAT, AT THE ORIGINAL STAGE, NO PRIMARY FACTS OR MATERIAL INFORMATION WAS AVAILABLE TO THE RESPONDENT TO CONSIDER THE ADVENTU RE OF THE PETITIONER AS ONE BY AN ASSOCIATION OF PERSONS. WE ARE UNABLE TO BE PERSUAD ED TO ACCEPT THE CONTENTION OF THE REVENUE THAT THERE WAS SUCH A PAUCITY OF MATERIAL A T THE FIRST STAGE RELYING ON WHICH IF HE SO INTENDED HE COULD NOT HAVE ASSESSED THE PERSONS CON CERNED AS AN ASSOCIATION OF INDIVIDUALS. IN OUR OPINION, THERE IS NO FOUNDATION FOR THE VIEW THAT THERE WAS NO ADEQUATE INFORMATION BEFORE THE ASSESSING OFFICER IN THE FIR ST INSTANCE, NOR COULD IT BE SAID THAT HE WAS LABOURING UNDER IGNORANCE OF RELEVANT FACTS. TH US, THEREFORE, THE JURISDICTIONAL FACT WHICH CAN PROMPT THE RESPONDENT TO ACT UNDER SECTIO N 148 IS ABSENT. AGAIN, BY AN OVERT VOLUNTARY ACT OF COMMISSION ON HIS PART, THE INCOME -TAX OFFICER CANNOT, BY CHANGING HIS MIND OR MOOD, VEST HIMSELF WITH JURISDICTION TO RE- OPEN ASSESSMENTS WHICH HAVE BECOME FINAL IN THE EYE OF LAW. EVEN SO, IT IS DIFFICULT T O COMPREHEND THE HESITANT ARGUMENT OF THE REVENUE THAT A RESERVATION TO ASSESS THE ASSOCIATIO N OF PERSONS ONCE AGAIN WAS MADE BY THE OFFICER IN THE FIRST INSTANCE. THUS, THEREFORE, THE RESPONDENT HAS NO JURISDICTION TO RE-OPEN THE ASSESSMENT IN THE MANNER PROPOSED. 10. THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS OF THE CASE AS DISCUSSED ABOVE. THEREFORE, THE PRINCIPLES LAID DOWN BY THE HONBLE MADRAS HIGH COURT ARE SQUARELY - 8 - ITA NO.364/RJT/2014 (BY REVENUE) & CO NO.12/RJT/2014 (BY ASSESSEE) ITO VS. SHRI NAVINBHAI T.BHANUSHALI ASST.YEAR 2006-07 APPLICABLE TO THE CASE OF THE ASSESSEE. THEREFORE, RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT THE ASSESSMENT FRAMED U/S 144 R.W.S. 147 OF TH E ACT IS NOT SUSTAINABLE. 11. AS WE HAVE DECIDED THE ISSUE IN FAVOR OF THE AS SESSEE ON THE TECHNICAL GROUND AS DISCUSSED ABOVE, THEREFORE, WE ARE NOT INCLINED TO ADJUDICATE OTHER CONTENTIONS RAISED BY THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF THE HEA RING. HENCE, THE ASSESSEE SUCCEEDS IN THE GROUND RAISED IN THE CROSS OBJECTION. 12. COMING TO THE APPEAL FILED BY THE REVENUE 12.1. AS WE HAVE ALREADY HELD THAT THE ORDER PASSED BY THE AO UNDER SECTION 147 OF THE ACT IS NOT SUSTAINABLE. THEREFORE THE GROUND RAISED BY THE REVENUE BECOME INFRUCTOUS. ACCORDINGLY, THERE IS NO NEED TO ADJUDICATE THE SAM E SEPARATELY. HENCE THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED, WHEREAS ASSESSEES CROSS OBJECTION IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 07 / 12 /2018 SD/- SD/- ( RAJPAL YADAV ) ( WASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 07/ 12 /2018 .., . ../ T.C. NAIR, SR. PS - 9 - ITA NO.364/RJT/2014 (BY REVENUE) & CO NO.12/RJT/2014 (BY ASSESSEE) ITO VS. SHRI NAVINBHAI T.BHANUSHALI ASST.YEAR 2006-07 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-JAMNAGAR 5. '#$ , % , /DR,ITAT, RAJKOT 6. $23 45 / GUARD FILE. / BY ORDER, ' //TRUE COPY// / ( DY./ASSTT.REGISTRAR) !, / ITAT, RAJKOT 1. DATE OF DICTATION .. 5.11.2018(DICTATION-PAD 7- PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 9.11.2018 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 10.12.18. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 10.12.18 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER