TaxTMI 
TaxTMI 
2012 (3) TMI 266
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....was issued under Section 143(2) since the case was selected for scrutiny and an order was passed on 26 December 2005 accepting the return of income submitted by the Assessee. The assessment for Assessment Year 2003-04 was reopened and a notice was issued under Section 148 on 25 March 2010. Pursuant thereto, a fresh order of assessment was passed on 27 December 2010 by which the Assessing Officer made an addition in the amount of Rs.4.9 crores and determined the total assessed income at Rs.6.89 crores. The Assessing Officer, in his order of assessment noted that an N.R.I. by the name of C. K. Pithawalla had advanced an amount of U.S. Dollars 7.3 million in 1995 to M/s. Asian Broadcasting Network. A Criminal Proceeding appears to have been instituted under the Indian Penal Code. The dispute was settled and the criminal case was withdrawn on 19 April 2003. The Assessee in his original return had disclosed an amount of Rs.2.00 crores as having been received by him for professional services rendered in connection with the criminal complaint filed by the creditor above named. The Assessing Officer noted that the creditor had in a statement made before the Enforcement Directorate stated t....
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....one Mr. Ghanshyam Khushaldas Khabrani residing at C/o Dyal K. Khabrani, 5th floor, Ghanshyam Nagar, Thane (E) having PAN AAKPK 4580 D has received roughly Rs.10 crores during F. Y. 2002-03 i. e. A.Y. 2003-04. On verification of record, it is observed that the Assessee has not offered this amount for taxation in R/I for A.Y. 2003-04. 2. Order u/s. 143(3) read with Section 147 has been passed on 27 December 2010, it is clearly mentioned by the AO that in F.Y. 2003-4 an amount of 6,50,000/- GBP was received by Mr. Khabrani in his foreign bank account i.e. Lloyd-TSB at Zurich. The assessee has filed his return of income for A.Y. 2004-05 by claiming the status of NRI. The assessee claimed that his stay outside India during F.Y. 2003-04 was 202 days and he was an NRI. As such his income earned abroad was not liable for taxation in India. The A.O. observed that the Assessee stayed outside India not wholly on account of employment purpose as his substantial stay during this period was by availing the visitor's visa. 3. The A.O. has passed assessment order u/s. 143 (3) read with Section 147 for A.Y. 2003-04 by making an addition of Rs. 4.9 crores. Since, the income of ....
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....ening was issued, the Assessing Officer was not in receipt of the approval which is required under Section 151; (iv) Under Section 151(2) the approval was required to be issued by the Additional Commissioner of Income Tax. In the present case, the Additional Commissioner has not granted approval. The Additional Commissioner of Income Tax forwarded the proposal submitted by the Assessing Officer to the CIT. Since the reopening of the assessment has not been effected with the approval of the authority having jurisdiction in the matter, the reopening of assessment is contrary to law. 3. On the other hand, it has been urged on behalf of the Revenue that: (i) The reopening of the assessment is based on the circumstance that information was received in a tax evasion report to indicate that the Assessee was in receipt of an amount of Rs.10 crores of which only amount of Rs.4.9 crores was brought to tax in the assessment for Assessment Year 2003-04. Consequently, the balance of Rs.5.1 crores is sought to be taxed for Assessment Year 2004-05; (ii) The authority required to grant its approval to the reopening of the assessment was the Additional CIT and the appr....
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....n over the case rests with Range-1 Thane. 2. As per Para 2 of Page No. 2 of the TEP, it is seen that the concerned assessee received roughly Rs.10 crores on which he had not paid taxes. The transaction pertains to A.Y. 2003-04 for which corrective action requires to be taken urgently as the case is getting time barred on 31 March 2010. 3. You are requested to kindly have it examined and take suitable action at your end. Ex-facie, it is clear from the letter and from the reasons recorded that the case of the Revenue is that an amount of Rs.10 crores was received by the Assessee in the previous year relevant to Assessment Year 2003-04. Moreover, the reasons note that the Assessing Officer passed an order, having reopened the assessment for Assessment Year 2003-04, by making an addition of Rs.4.9 crores. The balance of Rs. 5.1 crores which remained to be taxed for Assessment Year 2003-04 is brought to tax for Assessment Year 2004-05. It is evident on these admitted facts that no reasonable person duly informed in law could have formed a reason to believe that there was an escapement of income in Assessment Year 2004-05. The case of the Revenue is that an amount of....
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....nication of the Assessing Officer stated that : As requested by the A.O. Necessary approval for issue of notice u/s. 148 may kindly be granted in the case, if approved. On this a communication was issued on 29 March 2011 from the office of the CIT (1) conveying approval to the proposal submitted by the Assessing officer. There is merit in the contention raised on behalf of the Assessee that the requirement of Section 151(2) could have only been fulfilled by the satisfaction of the Joint Commissioner that this is a fit case for the issuance of a notice under Section 148. Section 151 (2) mandates that the satisfaction has to be of the Joint Commissioner. That expression has a distinct meaning by virtue of the definition in Section 2(28C). The Commissioner of Income Tax is not a Joint Commissioner within the meaning of Section 2(28C). In the present case, the Additional Commissioner of Income Tax forwarded the proposal submitted by the Assessing Officer to the Commissioner of Income Tax. The approval which has been granted is not by the Additional Commissioner of Income Tax but by the Commissioner of Income Tax. There is no statutory provision here under which a power to b....