TaxTMI 
TaxTMI 
2011 (9) TMI 574
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....escapement of income, he issued notice under Section 148 proposing to make income escaping assessment under Section 147 of the Act. Even though the assessee objected the proposal mainly by stating that in the absence of a regular assessment under Section 143(3) of the Act re-assessment under Section 147 cannot be made, overruling the objections assessments were completed under Section 147 of the Act, against which respondent-assessee filed appeals. In the appeals filed before the C.I.T.(Appeals), assessee raised the very same technical contention that without making regular assessment under Section 143(3), re-assessment cannot be made under Section 147 of the Act. The CIT(Appeals) who heard the appeals for the first two years, following the judgment of the Honourable Supreme Court in Asstt. CIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd. [2007] 291 1TR 500/161 Taxman 316 upheld the re-assessments and dismissed the assessee's appeals. However, another C.I.T. (Appeals) who heard the appeals for the next two years declared the reassessments invalid and allowed assessee's appeals. On second appeals filed by the assessee and the Department, the Income Tax Appellate Tribunal following two ....
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....ons recorded pursuant to which reassessments were made under Section 147 justify the same. Assessee is free to argue appeals on merit before the Tribunal on re-posting of the appeals by the Tribunal pursuant to this judgment. 4. This leaves us with the question whether the Tribunal was justified in cancelling the re-assessment completed under Section 147 for the assessment year 2003-2004 which was admittedly within the period provided for issuing notice under Section 143(2) and for completing the regular assessment under Section 143(3) of the Act. Senior counsel appearing for the Revenue contended that once escapement of income is noticed by the department after issuing intimation under Section 143(1), the Assessing Officer is free to initiate proceedings under Section 147 by issuing notice under Section 148 or in other words, according to him, even within the time provided for regular assessment under Section 143(3) which is to be made after issuing notice under Section 143(2), the Assessing Officer can make income escaping assessment under Section 147. Senior counsel for the Revenue relied on the following passage from the decision of the Supreme Court above referred: "So long ....
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....ed to make assessment under Section 147 which was held by the Delhi High Court to be impermissible under the Act. 5. On going through the decisions of the Supreme Court referred above, what we notice is that Supreme Court was not considering a case where re-assessment was initiated within the time available for issuance of notice under Section 143(2) and for making a regular assessment under Section 143(3) of the Act. So much so, the only legal position laid down by the Supreme Court in the above decision is that for making a re-assessment under Section 147, a regular assessment under Section 143(3) is not required. Therefore, the contention of Senior counsel for the Revenue that re-assessment is permissible under Section 147 even within the time provided for issuance of notice under Section 143(2) and for making regular assessment under Section 143(3) of the Act is not settled by decision of the Supreme Court. However, when this issue is before us for the assessment year 2003-2004, we have no escape from deciding it. At the same time our view is that consistent decisions of different High Courts not contested by the department in appeal before the Supreme Court should not be dist....
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.... clause (c) shall be granted to the assessee: ............ (2) Where a return has been furnished under Section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall,- (i) where he has reason to believe that any claim of loss, exemption, deduction, allowance or relief made in the return is inadmissible, serve on the assessee a notice specifying particulars of such claim of loss, exemption, deduction, allowance or relief and require him, on a date to be specified therein to produce, or cause to be produced, any evidence or particulars specified therein or on which the assessee may rely, in support of such claim: Provided that no notice under this clause shall be served on the assessee on or after the 1st day of June, 2003; (ii) notwithstanding anything contained in clause (i), if he considers it necessary or expedient to ensure that the assessee has not under-stated the income or has not computed excessive loss or has not under-paid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced, any evidence on....
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....t obliged even to send an intimation to the assessee. The first proviso, however, requires that an intimation has to be sent to the assessee even in a case where loss declared in the return by the assessee is adjusted or got reduced in the processing of return by the Assessing Officer without leading to any demand of tax. 6. So far as Section 143(2)(ii) is concerned, all what section authorises the Assessing Officer is to take the assistance of the assessee to establish correctness and completeness of his return and to prove the claims made thereunder. There is nothing to indicate that the Assessing Officer should have any material on concealment of income or excess relief claimed by the assessee in the return filed. All what is required is subjective satisfaction of the officer that the return as such is not acceptable without assessee establishing it's correctness and completeness for which he can issue notice for regular assessment. There is nothing to indicate that after issuance of the notice under Section 143(2), Assessing Officer should make an assessment under Section 143(3) in deviation from the return filed. In other words, even after issuance of a notice under Section 1....