2020 (10) TMI 253 - HC - Income Tax

High Court Upholds Tribunal Decision to Reopen Assessments for 2006-07 & 2007-08

Pradeep Dayanand Kothari, Versus Commissioner of Income Tax 2, Chennai

The High Court upheld the Income Tax Appellate Tribunal's decision to reopen assessments for the years 2006-07 and 2007-08 under Section 147 of the Income ... Reopening of assessment u/s 147 - absence of a notice u/s 143(2) - Department failed to get any confirmation from any authority in support of his decision to re-open the assessment - whether at all an argument is required to be made by referring to Section 292BB? - HELD THAT:- Procedure has been followed, notices under Section 143(2) were issued and the case on hand is not a case where notice was not issued and from the facts recorded, we find that there is no procedural irregularity and the question of applying Section 292BB of the Act would not arise in the facts and circumstances of the case on hand. Furthermore, we noted that the assessee appears to have been well aware of this position and precisely for that reason, the grounds canvassed before us were never canvassed at an earlier stage. We hold that the order passed by the Tribunal does not call for any interference and the substantial question of law (c) has to be decided against the assesseee. So far as substantial questions of law (a) and (b) are concerned, on facts, we have found that there are proper issuance and service of notices under Section 143(2) of the Act and consequently, the substantial questions of law though cannot be canvassed for the first time before this Court, as the assessee was never prejudiced earlier, yet on facts, we found that there is statutory compliance of the procedure under Section 143 of the Act. Contention regarding the applicability of Section 153 of the Act, we find that at the relevant time, the limitation was one year and the order could have been passed on or before 31.03.2013. Therefore, on this aspect also, the assessee's contention has to be rejected. - Decided against assessee. Issues:- Validity of reopening assessments under Section 147- Absence of notice under Section 143(2) of the Act- Correctness of assessment of credits into the bank accountAnalysis:1. The appellant challenged the common order of the Income Tax Appellate Tribunal, questioning the reopening of assessments for the years 2006-07 and 2007-08 under Section 147 of the Income Tax Act. The substantial questions of law raised included the validity of the re-opening without confirmation, absence of notice under Section 143(2), and the correctness of assessing credits into the bank account as income.2. The appellant contended that the re-assessment proceedings were flawed due to the failure to issue a notice under Section 143(2) of the Act and exceeding the time limit prescribed under Section 153. The appellant cited relevant case laws to support their argument, emphasizing the necessity of procedural compliance.3. The Revenue argued against permitting the appellant to raise procedural defects for the first time before the High Court, asserting that proper procedures were followed, and the appellant did not question the procedural aspect earlier. Reference was made to Section 292BB of the Act to support the validity of the notices issued.4. The High Court analyzed the factual position and found that notices under Section 143(2) were properly issued and served, dismissing the appellant's argument of non-service of notice. The Court noted that the appellant was aware of the procedural compliance, as evidenced by the lack of earlier objections, and held that there was no procedural irregularity.5. The Court held that the Tribunal's order did not warrant interference, and substantial questions of law (c) were decided against the appellant. Substantial questions of law (a) and (b) were also held against the appellant, as proper issuance and service of notices under Section 143(2) were established, and the limitation under Section 153 was not breached.6. Consequently, the appeals filed by the appellant were dismissed, and the substantial questions of law were answered against the appellant. No costs were awarded in the judgment.