2013 (4) TMI 424 - HC - Income Tax

Validity of Income Tax reassessment upheld, not time-barred. Reasons sufficient, within period. Dismissal under section 143(1) upheld.

The High Court upheld the validity of reassessment proceedings initiated for the second time by the Income Tax department, finding them not barred by time ... Validity of reassessment notice - Reopening of assessment - writ petion challenging the notice as barred by limitation - Held that:- In response to the reassessment notice, the petitioner had filed returns and proceedings were pending and during the pendency of the reassessment proceedings the Income Tax Officer issued a fresh notice for the assessment years already involved in the reassessment proceedings. In that connection it was held that issuance of second notice is invalid. The Court proceeded when the assessee had already filed the return, for the same period, no assessment has been made on the basis of the said return, reassessment proceedings could not be initiated. The judgment of Tube Company Ltd. Versus Income Tax Officer, [2004 (6) TMI 18 - CALCUTTA High Court] has no application to the facts of the present case in as much as when the impugned notices under section 148 were issued, no proceedings for reassessment was pending. The earlier reassessment proceedings were dropped by the order dated 22.6.2005 and the earlier notice issued under section 148 on 11.3.2004 was cancelled.Writ dismissed. Issues:1. Validity of reassessment proceedings initiated for the second time.2. Barred by time or any statutory provision.Analysis:1. The High Court considered the validity of reassessment proceedings initiated for the second time by the Income Tax department. The petitioner argued that since similar proceedings were dropped earlier by the department, the current proceedings were initiated on identical grounds, making them invalid. The department contended that the reasons recorded earlier were considered insufficient, and the current proceedings were validly initiated after recording elaborate reasons. The court noted that the petitioner did not challenge the sufficiency of the reasons recorded to believe that income had escaped assessment. It was observed that the initiation of reassessment proceedings was not barred by time, as the notices were issued within the prescribed period of six years from the relevant assessment years. The court found that the conditions for issuing the notices were met, as the escaped income exceeded Rs. One Lakh and the notices were within the six-year period.2. The court also addressed the argument related to the assessment being completed under section 143(1) of the Income Tax Act. The petitioner relied on a judgment which was deemed irrelevant to the present case. The court distinguished the cited case, stating that it did not apply to the current situation where no reassessment proceedings were pending when the impugned notices were issued. It was highlighted that the earlier reassessment proceedings had been dropped, and the previous notice was cancelled. Therefore, the court concluded that there was no merit in the petitioner's arguments, and both writ petitions were dismissed.