TaxTMI 
TaxTMI 
2011 (3) TMI 1340
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....n a revised order was passed on 27.6.2002 giving credit to some more TDS certificates which resulted in an additional refund of Rs.8,86,226/-. 3. Thereafter, it was noticed that on a perusal of records, the assessee-Company had not computed the income under Section 115 JA of the Act properly. Therefore, on facts, there was a reason to believe that the income assessable to tax has escaped assessment. In view of the same, a proceeding under Section 147 of the Act was initiated by issuing notice under Section 148 of the Act on 23.12.2003. In response to the said notice, the assessee's representative M/s.N.C.Rajagopal & Co. Chartered Accountants vide their letter dated 5.1.2004 informed that the original return filed for the Assessment Year 1998-99 may be treated as the one filed in response to the notice issued under Section 148 of the Act. Further, notice for hearing under Section 143(2) of the Act was issued to the assessee on 16.12.2004. In response to this notice, Shri. R. Niranjan Chawala of M/s. N.C. Rajagopal & Co., Chartered Accountants appeared on behalf of the assessee. 4. After hearing the representative of the assessee, the Assessing Officer has given his r....
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....rived at accordingly. 7. As against the said order, the assessee filed an appeal before the Commissioner of Income-tax (Appeals)-III and the said appeal was allowed by an order dated 17.2.2006, holding as follows:- " I have considered the various submissions made by the appellant's representative both on the issue of jurisdiction and on merits. After going through the documents furnished in support of the facts that a valid notice u/s 143(2) has been issued within the time limit permitted under the Act and allowing the proceedings to remain inconclusive, the Assessing Officer does not get jurisdiction to initiate action u/s. 148 of the Act as held by the apex court in the two cases relied on by the appellant. I, therefore, hold that the assessment has not been validly reopened and hence the impugned order passed is ab initio void. In as much as the reassessment proceedings have been struck down as not valid in law, other grounds of appeal are not considered. The appellant succeeds on this ground." 8. As against the said order, the Department filed an appeal before the Income Tax Appellate Tribunal and the Tribunal, by its order dated 15.10.2007, reversed the....
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....s not been initiated by issuing notice. Once a notice under Section 143(2) is issued, proceedings under Section 147 of the Act cannot be initiated, so long as the said notice has not fructified in an order under Section 143(3) of the Act. 12. Learned counsel further submitted that the Income Tax Appellate Tribunal erred in holding that since the time for completing the assessment under Section 143(3) of the Act had expired after issuing notice under Section 143(2) of the Act, proceedings under Section 147 of the Act could be initiated. 13. In support of her submissions, the learned counsel relied on the decision of the Hon'ble Supreme Court reported in the case of TRUSTEES OF H.E.H. NIZAM'S TRUST v. C.I.T. ((2000) VOL. 242 I.T.R. 381), wherein the Hon'ble Supreme Court has held as under:- " It is settled law that unless the return of income already filed is disposed of, notice for reassessment under section 148 of the Income-tax Act, 1961, cannot be issued, i.e. no reassessment proceedings can be initiated so long as assessment proceedings pending on the basis of the return already filed are not terminated. A return of income filed in the form prescribed alo....
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.... 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." 15. Therefore, applying the aforesaid ruling of the Apex Court to the facts and circumstances of the case, the Assessing Officer came to the subjective satisfaction as indicated in his letter dated 7.2.2005 referred to above. Therefore, it cannot be stated that the contention of the learned counsel for the appellant that the Assessing Officer has no jurisdiction to reconsider the matter or to initiate reassessment proceedings once the proceedings are concluded. As laid down by the Supreme Court, the condition precedent is that the Assessing Officer must have reason to believe that income, profits or gains chargeable to income tax have escaped assessment. As could be seen from the assessment order, it is seen that as per Section 115JA of the Act, the assessee did not have any....