AI Insights
The case involves the Revenue's appeal against the CIT(A)'s decision, which had allowed the assessee's appeal regarding the reopening of the assessment for the AY 2012-13. The Revenue contended that the CIT(A) erred in finding that no new information justified the reopening of the assessment under section 147 of the IT Act. The original assessment was reopened based on findings from a search conducted in 2009, which allegedly revealed the assessee's beneficial ownership of 33 companies and undisclosed investments. However, the CIT(A) found that this information was already considered in previous assessments, and thus, the reopening was merely a change of opinion.
Appeal Details
Counselvise Citation
[2025] 140 COUNSELVISE.COM (IT) 26253 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
19-03-2025
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
F
Assessment Year
misc
Judgement Text
" IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “F”, MUMBAI BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No. 4565/Mum/2024 Assessment Year: 2012-13 DCIT, Central Circle- 8(4), Aayakar Bhavan, Mumbai – 400020. Vs. Viren Vini Ahuja 1, Neelkanth Teerth Road No. 6, Chembur, Mumbai – 400077. PAN: AACPA 4809 M (Appellant) (Respondent) Present for: Assessee by : Shri J.P. Bairagra / Ms. Rupa Nanda Revenue by : Shri Himanshu Joshi, Sr. DR Date of Hearing : 07.03.2025 Date of Pronouncement : 19.03.2025 O R D E R PER AMARJIT SINGH, ACCOUNTANT MEMBER: The appeal of the Revenue for the assessment year 2012-13 is directed against the order dated 12.07.2024 passed by the Commissioner of Income Tax, Appeal [CIT(A)] – 50, Mumbai. The Revenue has raised the following grounds of appeal: “i. On the facts and circumstances of the case and in law, whether the ld. CIT(A) is justified that no new information has been received by the AO for reopening the assessment u/s 147 of the IT Act. ii. On the facts and circumstances of the case and in law, whether the ld. CIT(A) is justified that the assessment was reopened on the basis of information unearthed / revealed during the search conducted on 31.10.2009 and on this information the addition of Rs. 33,00,000/- has also been made for the AY 2009-10. The reopening has been done on the facts already available with the AO at the time of completion of scrutiny ITA No.4565/Mum/2024 Viren Vini Ahuja A.Y. 2012-13 2 assessment u/s 143(3) of the IT Act. From these facts, it is evident that it is nothing but a change of opinion. iii. On the facts and circumstances of the case and in law, whether the ld. CIT(A) is justified in deciding the case where the issue of deemed dividend income and deemed income from house property was not discussed during the appellate proceedings. iv. On the facts and in the circumstances of the case and in law, whether the ld. CIT(A) erred in not considering that the assessee has not fully and truly disclosed the necessary facts during the assessment for the year under consideration.” 2. Fact in brief is that return of income declaring total income of Rs. 1,25,55,580/-was filed on 08.10.2012. The assessment u/s 143(3) of the Act was completed on 18.03.2025 assessing the total income at Rs. 1,84,99,060/-. Subsequently, the assessing officer noticed that search u/s 132 was conducted at the residence and business premises of the assessee on 31.10.2009. During the course of search, it was found that the assessee was beneficial owner of 33 companies which were floated by the employees of the Bermaco Group. It was alleged that real sole owners of the 33 companies was the assessee and the employees were not the real owners. Therefore, the source of investment of Rs. 33 lakhs was treated as invested by the assessee and the same was added in the hands of the assessee in the order passed u/s 153(A) r.w.s. 143(3) dated 08.06.2012 for the A.Y. 2009-10. Thereafter, the assessing officer reopened the assessment u/s 147 of the Act by issuing of notice u/s 148 of the Act on 16.11.2018 on the ground that those 33 companies have provided unsecured loans to the assessee for which provision of deemed dividend u/s 2(22)(e) to be attracted. ITA No.4565/Mum/2024 Viren Vini Ahuja A.Y. 2012-13 3 Before the assessing officer, the assessee submitted that assessee was neither the registered shareholder nor the beneficial shareholder hence the provision of deemed dividend is not applicable in his case. However, the AO has not agreed with the submission of the assessee and stated that assessee was the original beneficial shareholder of these 33 companies which were floated in the name of the employees and computed deemed dividend of Rs. 4,22,79,179/- u/s 2(22)(e) of the Act and added to the total income of the assessee. 3. The assessee filed appeal before the ld. CIT(A). The ld. CIT(A) has allowed the appeal of the assessee. The relevant extract of the ld. CIT(A) is as under: “6. I have considered the assessment order, reasons for reopening the assessment u/s 147, submission filed by the appellant and facts available on record. The A.O reopened the assessment u/s 147 of the IT Act on the basis that, during the search conducted u/s 132 at the residence and business premises of the appellant and group companies on 31.10.2009, it was found that the appellant has floated 33 companies through the dummy directors and these directors in their statements recorded during the search have admitted that the appellant has given cash of Rs 1,00,000/- per company to subscribe the capital. Thus, the entire capital of Rs 33,00,000/- for these companies has been subscribed by the appellant and hence appellant is the real beneficial owner of this company. The 6 companies out of the 33 companies have given loan to the appellant of Rs 14.9 crores. The appellant is the beneficial shareholder having more than 10 per cent shareholding in these companies and hence provisions of Section 2(22)(e) are attracted on the loan given by these companies to the appellant. Hence, income to the extent of Rs 14.9 crores has escaped. 6.2 The appellant has submitted that, the assessment in the case of appellant for A.Y 2009-10 was completed u/s 143(3) r.w.s 153(A) on ITA No.4565/Mum/2024 Viren Vini Ahuja A.Y. 2012-13 4 08.06.2012 wherein addition of Rs. 33,00,000/- was made on account of the cash payments made to the dummy directors for subscribing the share capital. Thereafter, the assessment for A.Y 2012- 13 was completed u/s 143(3) of the IT Act on 18.03.2015. Thus, this information regarding the cash payments to the dummy director for subscription was already available with the A.O while completing assessment order u/s 143(3). Thus, no new information has emerged which warranted reopening of the assessment. This reopening is merely made on the basis of mere change of opinion. It is also contended that there is a factual mistake in the grounds of reopening as the amount alleged to be escaped is different from the amount of addition made by the A.O. In support to its contention, the appellant has relied on various case laws. 6.3 It is seen from the records that, a search u/s 132 of the IT Act was conducted on the appellant and the group companies on 31.10.2009. During the search, it was found that the appellant has floated 33 companies through dummy directors namely, Sandeep Doke and Ravindra Nair. These directors in their statements recorded during the search have admitted that the appellant has provided cash of Rs 1,00,000/- for subscribing the share capital for each company. Thus, the appellant has provided 33,00,000/- to these directors for subscribing share capital of these 33 companies. Thereafter, the assessment u/s 143(3) r.w.s 153(A) of the IT Act for AY 2009-10 was completed on 08.06.2012 wherein addition of Rs 33,00,000/- has been made on account of alleged cash investments in these 33 companies. Subsequently, assessment u/s 143(3) for the AY 2012-13 i.e the A.Y under consideration was completed on 143(3) on 18.03.2015. Thereafter, this assessment was reopened u/s 147 on 16.11.2018. The chronology is as under: 1. The search was conducted on 31.10.2009. 2 Assessment u/s 143(3) r.w.s 153(A) for AY 2009-10 was also completed on 08.06.2012. 3. Assessment us 143(3) AY 2012-13 was also completed on 18.03.2015. The above facts shows that, the information regarding cash payments by the appellant on behalf of the dummy directors for subscribing share capital of 33 companies was already available with the A.O while ITA No.4565/Mum/2024 Viren Vini Ahuja A.Y. 2012-13 5 completing the original assessment order u/s 143(3) dated 08.03.2015 for the A.Y under consideration. In fact, the A.O has made the addition of Rs.33,00,000/- on the basis of findings of the search. The balance sheet and financial details were available before the A.O while completing this assessment. Thus, it is evident from the fact itself that, no new information has been received by the A.O for reopening the assessment u/s 147 of the IT Act. The assessment was reopened on the basis of information unearthed / revealed during the search conducted on 31.10.2009 and on this information the addition of Rs.33,00,000/- has also been made for the AY 2009-10. The reopening has been done on the facts already available with the A.O at the time of completion of scrutiny assessment u/s 143(3) of the I.T Act. From these facts, it is evident that it is nothing but a change of opinion. Further, it is also a fact that, the appellant is not a registered share holder. Hence issue of taxability of deemed dividend in the hands of the appellant is also a debatable issue. 7. The issue of change of opinion has been decided by the various High courts and Hon’ble Supreme Court. Some of the decisions are discussed hereunder 7.1 The Honble Supreme Court in case of Gemini Leather Stores vs ITO ([1975] 100 ITR 1 has held as under- “In the case before us the assessee did not disclose the transactions evidenced by the drafts which the Income-tax Officer discovered. After this discovery the Income-tax Officer had in his possession all the primary facts, and it was for him to make necessary enquiries and draw proper inference as to whether the amounts invested in the purchase of the drafts could be treated as part of the total income of the assessee during the relevant year. This the Income-tax Officer did not do. It was plainly a case of oversight, and it cannot be said that the income chargeable to tax for the relevant assessment year had escaped assessment by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts. The Income-tax Officer had all the material facts before him when he made the original assessment. He cannot now take recourse to section 147(a) to remedy the error resulting from his own oversight.” 7.2 The Honb’le High court Punjab and Haryana in case of Kaveri Infrastructure (P.) Ltd. 153 taxmann.com 425 has held as under- “Further, it was also not the case of the revenue that re-opening was ITA No.4565/Mum/2024 Viren Vini Ahuja A.Y. 2012-13 6 initiated by it on the basis of any subsequent information which was found to be definite, specific and reliable. Rather, there is nothing new which is shown to have come to the notice of the revenue for this purpose. As such, the facts which were taken into consideration by the Assessing Officer cannot be stated to have come to his knowledge after the assessment proceedings for the relevant years had completed. No doubt, the acceptance of returns or completion of assessment did not take away the jurisdiction of the Assessing Officer to issue notice to re-assess but that jurisdiction could be exercised only if it was revealed that the assessee had not discharged its duties, the information supplied in the return was not correct or all material had not been truly disclosed and further on the ground that the Assessing Officer had reason to believe that there was escapement of income. As all the primary facts necessary for the assessment had undisputedly been disclosed by the assessee. It is opined that by issuing notice beyond a period of four years from completion of that assessment, the revenue could not take benefit of extended period of limitation. Reliance in this context can be made to Pr. CIT v. L & T Ltd. [2020] 113 taxmann.com 48/268 Taxman 390 (SC), wherein it was held by Apex Court that re-assessment proceedings initiated after four years from the end of the relevant year only on the basis of change of opinion, are liable to be set aside. Therefore, qua the assessment year 2008-09 the reassessment proceedings initiated beyond four years have become liable to be set aside on the ground of change of opinion and being time barred as well. [Para 16]” 7.3 The Hon’ble Bombay High Court in case of L& T Ltd (113 taxmann.com 47) has held as under- “3. Perusal of the reasons recorded by the Assessing Officer would show that the Tribunal was perfectly correct in coming to the conclusion that the notice of reopening of assessment was invalid. From the reasons we gather that there was no element of lack of true and full disclosure on the part of the assessee, which resulted into any income chargeable to tax escaping assessment. The reasons clearly reveal that the Assessing Officer was proceeding on the material which was already on record. In the absence of the statutory requirement of income chargeable to tax have been escaped assessment due to the failure on the part of the assessee to disclose truly and fully all material facts been satisfied, the Tribunal correctly held that the notice of reopening of assessment was invalid. No question of law arises” The SLP filed before the Hon’ble Supreme Court against the above order has been dismissed. ITA No.4565/Mum/2024 Viren Vini Ahuja A.Y. 2012-13 7 8. In view of the above discussion on facts, I am of the view that, the reopening u/s 147 of the I.T Act was done on the basis of facts already available before the A.O at the time of completion of scrutiny assessment u/s 143(3) of the I.T. Act. No new tangible material has come to the notice of the A.O. Hence, it is a case of mere change of opinion. Hence, in view of the decisions of Hon’ble Jurisdictional High Court and Hon’ble Supreme Court as discussed above, the reopening proceedings under section 147 are held as invalid. Accordingly, the appeal on these grounds is ALLOWED.” 4. During the course of appellate proceedings before us, the ld. Departmental Representative has supported the order of assessing officer. On the other hand, ld. Counsel submitted that in this case, no new information has been received by the assessing officer for reopening of the assessment u/s 147 of the Act. He submitted that information and the material revealed during search action pertaining to the 33 companies and addition of Rs. 33,00,000/- was already available with the assessing officer as the same was considered while making the assessment in the case of the assessee u/s 153A r.w.s. 143(3) of the Act for the A.Y. 2009-10 on 08.06.2012 before reopening the case of the assessee on same material on 16.11.2018. He also submitted that even before reopening the case the assessing officer had already passed order for regular assessment u/s 143(3) of the Act on 18.03.2015 without making any further addition on the basis of the information and search material which was already available with the assessing officer. The ld. Counsel has also placed reliance on the decision of judicial High Court, Bombay in the case of ICICI Bank Ltd. vs DCIT and the decision of Oxford University Press vs DCIT. ITA No.4565/Mum/2024 Viren Vini Ahuja A.Y. 2012-13 8 5. Heard both the sides and perused the material on record. The assessing officer has reopened the assessment based on the material and information gathered from the search action conducted u/s 132 of the Act on 31.10.2009 that assessee had floated 33 companies in the name of his employees. The assessing officer was of the view that assessee was the beneficial shareholder having more than 10% shareholding in this company, therefore, provision of section 2(22)(e) to be attracted to the case of the assessee for obtaining loan from those companies. However, on perusal of the material placed on record and submission filed before us, it is noticed that after the search action assessment order u/s 153A r.w.s. 143(3) of the Act was made on 08.06.2012 for the A.Y. 2009-10 wherein an addition of Rs. 33,00,000/- made on account of alleged cash investment in shares of 33 companies in the name of the employees of the assessee. Subsequently, the assessment u/s 143(3) r.w.s. 2012-13 was finalized on 08.03.2015 when the said material found and seized from the search action taken place on 30.10.2009 were available with the assessee. The AO has not made any addition while passing the assessment order u/s 143(3) for A.Y. 2012-13 on 18.03.2015. Therefore, we find merit in the submission of the assessee that the impugned assessment was reopened on the basis of information revealed during the search action conducted on 31.10.2009 and no new material has come into possession of the AO after completion of the scrutiny assessment or before issuing of notice u/s 148 of the Act. We have also considered the decision of Hon’ble Jurisdictional ITA No.4565/Mum/2024 Viren Vini Ahuja A.Y. 2012-13 9 High Court in the case of ICICI Bank Ltd. 2025-T10L-318-HC- MUM-IT dated 11.02.2025 as referred above in this order wherein it is held that reassessment proceedings are not tenable where they are commenced on the basis of documents already provided by the petitioner during the original assessment, thus the same is amounting to change of opinion. In view of the above facts and findings, we do not find any reason to interfere in the decision of ld. CIT(A), therefore, ground of appeal filed by the Revenue are dismissed. 6. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 19.03.2025. Sd/- Sd/- (SANDEEP SINGH KARHAIL) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 19.03.2025 Biswajit, Sr. P.S. Copy to: 1. The Appellant: 2. The Respondent: 3. The CIT, 4. The DR //True Copy// [ By Order Assistant Registrar ITAT, Mumbai Benches, Mumbai "
