The Congress Party advanced Rs 90 Crores to company Associated Journals Ltd (AJL) being publisher of the newspaper \u201c National Herald\u201d with the condition that the amounts to be urtilised by the letter to write \u2013off its accumulated debts and recommence its news paper .A charitable non-profit company Yong Indian (YI) was incorporated and by a deed of assignment of Rs. 90 crores in favour of YI\u00a0 was executed by the congress party\u00a0 on 28-12-2010. There was transfer of \u00a0\u00a0\u00a0YI shares from its existing shareholders to\u00a0 Sonia Gandhi and Oscar Fernades. In a fresh allotment assessees. Viz. Rahul Gandhi , Sonia Gandhi , Motilal Vohra , Oscar Fernades were allotted 1900, 1350 600mand 60 shares of YI on payment of Rs1.90 Lakhs Rs.1.35 lakhs Rs\u00a0 Rs 60\u00a0 and Rs 500 respectively .YI issued a cheque for Rs 50 lakhs subsequently on 26-2-2011 to the congress party as part consideration for the assignment of Rs 90 Crore debt to it and AJL allotted Rs.9.02 crores equity shares to YI\u00a0 in 2011.\u00a0 YI applied for section 12AA exemption on 29-03 -2011 . The exemption was granted by\u00a0 on 9-5-2011 by a certificate , with effect from financial year 2010-11 .The assessment of Rahul Gandhi was completed u\/s 143(3) of the Act. As late as on 31-03 2018 , Rahul Gandhi\u00a0 received\u00a0an e.mail\u00a0 from the Assessing Officer , intimating that\u00a0 notice\u00a0 under section 148 . The assessee received it\u00a0 on 2-4-2018\u00a0 through\u00a0speed\u00a0 post. The Assessing Officer\u00a0 furnished the reasons recorded. \u2018 Reason to believe \u2018 alleging that difference between the \u2018Fair Market Value \u2018 of the shares\u00a0 of the Young Indian (YI)\u00a0 and the cost of acquisition of those shares by Rahul Gandhi\u00a0 was his income. In support of this position , the revenue relied upon\u00a0 a letter written by its Department of Investigation dated 11-05-2015 and a letter dated 8-06-2015 and a Tax Evasion Petition (TEP)\u00a0 addressed to the Finance Minister by\u00a0 Subramanian Swamy .<\/p>\n
The assessee challenged the reassessment proceedings on various grounds such as;(1)there was no tangible material\u00a0 (ii)The assesses were share holders of a non profit and charitable company hence no obligation to disclose value of shares , (iii) Section 56(2)(vii) is in applicable\u00a0 in the issue of fresh shares (iv) second proviso to\u00a0 section 56 (2) (vii)( c ) (ii) enacts certain exceptions as the institution s registered under section 12AA , section 56 (2)(vii)\u00a0 could not apply ,(v) order subsequently cancelling the registration granted to YI on 26-10-2017\u00a0 with retrospective effect was of no avail, (vi) the reliance placed upon the TEP was vitiated because the revenue had acted on stale grounds , before issuing the reassessment\u00a0notice the Assessing Officer should have made independent investigations as to whether there was\u00a0 any obligation with respect to value of underlying assets of YI in the light of the fact that it was a charitable institution .<\/p>\n
Dismissing the petition the Court held that the reassessment notice was issued by following due process of law and the revenue had tangible material to form the opinion that the income has escaped the assessment.\u00a0<\/strong>Court held that entire premise of the reassessment notice is that the non disclosure of the taxing event. i.e. allotment of shares ( and the absence of any declaration as to value). Deprived the Assessing Officer of the opportunity to look in to records. In the case of Rahul Gandhi, no\u00a0 doubt the assessment\u00a0 originally\u00a0 completed\u00a0, was under section 143(3) Had he disclosed in his returns or any related documents\u00a0 about the event ( Share acquisition)\u00a0 the primary fact would have been on the record ; the Assessing Officer\u2019s subsequent action in pursing that aspect or letting go of it, after inquiry might well have justified the change of second and impermissible opinion on the same subject. However , that is not the case . The TEP and investigation reports of subsequent vintage ( after completion of Gandhi\u2019s assessment ) therefore, constituted tangible material which in terms of ruling in CIT\u00a0 v. Kelvinator of India Ltd\u00a0 (2010) 320 ITR 561 (SC)\u00a0 justified\u00a0reassessment.\u00a0 In the case of other two assesses ( Mrs Soni Gandhi and Oscar Ferandes) the returns filed by them were processed\u00a0 under section 143(1) . Such instances are not treated as \u2018assessment\u2019 Dy.CIT v. Zuari\u00a0 Estate Development & Investment\u00a0 CO Ltd ( 2016) 236 Taxman 1 (SC) is an authority on the subject.(W.P \u00a08293\/2018; W.P.(C) 8482\/2018 and W.P.(C) 8483\/2018 are accordingly dismissed.( W.P.(C) 8482\/2018, C.M. APPL.32580-32582\/2018, dt. 10.09.2018) ( AY.2011-12)<\/p>\n