TaxTMI 
TaxTMI 
TaxTMI 
2010 (10) TMI 630
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....he learned Tribunal committed a jurisdictional error in reversing the order of the CIT (Appeals) and restoring the order of the Assessing Officer who reassessed the entire income, even though the recorded reasons under section 148(2) were limited to alleged escapement of income of Rs. 3,50,000 on account of commission and brokerage?" 2. The fact of the case as it appears from the records and also submitted in the written notes of argument is as follows. 3. The assessee/appellant is a Company carrying on real estate business including construction of the building, letting out the same as well as providing maintenance and other services. The appellant duly filed Return of income for the assessment year 2003-04 with audited accounts, Tax Audit Report under section 44AB, computation sheet, and other documents were filed on 29-11-2004 declaring gross total income at Rs. 26,889 after setting off business loss of Rs. 10,13,614 against income under the head House property of Rs. 10,40,503. The Return was duly processed under section 143(1). Thereafter Assessing Officer initiated proceeding under section 147 of the Act and issued notice under section 148 dated 2-7-2005. On receipt of the ....
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....eme Court decision as above he contends that the proceeding under section 147 read with section 148 is patently illegal, invalid and without jurisdiction. It is settled law unless the income escaped assessment reassessment by notice under section 148 of the Act is clearly invalid illegal and without jurisdiction. He submits before the learned Tribunal question of jurisdiction could not be raised since no appeal could be preferred because appellant succeeded before the CIT (Appeals) on merit. However before this Court in view of the provision of section 100 read with Order 41 Rule 33 of the Code of Civil Procedure question of law can be raised even at the appellate stage also. The scope and power of the Appeal Court under section 260A of the Act has been explained by the Supreme Court in the case in Santosh Hazari v. Purushottam Tiwari [2001] 251 ITR 84. Moreover the provision of CPC relatable to appeal to High Court has been incorporated in sub-section (7) of section 260A of the Act. Besides the point of law can be raised at any stage in view of law settled by a catena of judicial pronouncements which are as follows: (i) Tarini Kamal Pandit v. Prafulla Kumar Cha....
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....ncome chargeable to tax has escaped assessment. In a case where only an intimation has been sent, notice can be issued under section 148 of the Act. He referring to Supreme Court decision in case of Rajesh Jharveri Stock Brokers (P.) Ltd. (supra) contends that intimation under section 143(1)(a) cannot be treated as an order of assessment; when there being no assessment under section 143(1)(a), question of change of opinion did not arise. The scope and effect of section 147 as substituted with effect from 1-4-1989, as also sections 148 to 152 are substantially different from the provisions as they stood prior to such substitution. If Assessing Officer whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. The Assessing Officer is not powerless to initiate reassessment proceedings even when intimation under section 143(1) had been issued. He contends further that the income in respect of any issue, which has escaped assessment notwithstanding that the reasons for such issue have not been included in the reasons recorded under section 148(2) of the Act. 9. On merit with regard to 3rd question he submits if reasons fo....
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....the matter. Unless it was allowed to be raised there would have been wrong application of law which could result in injustice. The aforesaid principle in our view cannot be allowed to be made applicable wherever and whenever any illegality is to be noted. On considering the case if it is found that the question is waivable in nature and it does not touch the root of the matter so as to render entire proceeding invalid, the aforesaid pronouncement of the high authorities are not appropriate. 12. Turning to the present case we notice that section 143(1) notice was issued first followed by notice under section 148. On receipt of the Notice the assessee/appellant asked for reasons from the Assessing Officer for reopening assessment and the same were supplied. On receipt of those reasons the reply dated 8-9-2005 was given and it was stated that the assessee was protesting against the issue of notice under section 148 calling upon to file fresh returns and it was also was called upon, under protest to treat earlier returns filed under section 136 as returns in response to the notice. Hence with mild reservation the assessee invited the Assessing Officer to decide and to pass assessment ....
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....s chargeable to Income-tax have escaped assessment, and secondly he must also have reason to believe that such escapement has occurred by reason of either omission or failure on the part of the assessee to disclose fully or truly all material facts necessary for his assessment of that year. Both these conditions were conditions precedent to be satisfied before the Assessing Officer could have jurisdiction to issue notice under section 148 read with section 147(a). But under substituted section 147 existence of only the first condition suffices. In other words if the Assessing Officer for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. It is, however, to be noted that both the conditions must be fulfilled if the case falls within the ambit of the proviso to section 147. The case at hand is covered by the main provision and not the proviso. So long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings even when int....