TaxTMI 
TaxTMI 
2014 (8) TMI 764
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....the I. T. Act. " 2. 3. "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating that assessee did not furnish material facts even during the course of reassessment proceedings. " 2. 4. "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that reasons of reopening should have been supplied along with notice u/s. 148 and not appreciating that this is not the requirement of law, as laid down in Hon'ble Supreme Court order in the case of G. K. N. Drive Shaff. The CIT(A) failed to take note of the fact that assessee never asked for the reasons for issuing notice u/s. 148 of the Act. " 3. "The assessee prays that the order of Ld. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. " 4. "The assessee craves leave to amend or alter any ground or add a new ground which may be necessary. " 2. Assessee-company, engaged in the business of distribution of banking and telecom products, filed its return of income on 28. 11. 2003 declaring total income at Rs. 12, 58, 710/-. The regular assessment u/s. 143(3) was completed on 11. 10. 2005 assessing the total income at Rs. 13....
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....43(3) of the Act, prior approval of the Chief Commissioner or Commissioner was also necessary for the reopening of the assessment, that the provisions of section 151(1) had not been followed. 3. 1. As certain factual illegalities were alleged by the assessee in reopening of the assessment and on that ground it had challenged the validity of the reassessment proceedings/reassessment order, the FAA directed the AO to send his comments on the claim of the assessee vide his office letter dated 12. 01. 2012. Copies of the submissions of the assessee, statement of facts (revised) as well as that of the grounds of appeal were also sent to the AO. But, the AO did not send his comments by the due date, so a reminder dated 12. 06. 2012 was issued by the FAA to furnish his comments. The AO was informed that if his comments were not received by the due date, it would be presumed that he had nothing to say on the matter and the appeal would be disposed off on merits. Even then, no comments were received from the AO by 22. 06. 2012. The FAA gave a final chance to the AO and sent another reminder, vide his office letter dated 06. 07. 2012 and the AO was directed to send his report positively b....
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....ssee and hence he had initiated reassessment proceedings. 5. We have heard the rival submissions and perused the material before us. Before proceedings further we would like to reproduce the reasons recorded by the AO for issuing notice u/s. 148 of the Act and same read as under: "the assessee credited an amount of Rs. 1, 06, 92, 939/- inclusive of sales commission and other income while the gross receipts as per the TDS certificate is of Rs. 2, 19, 99, 985/-. Therefore the income to the tune of Rs. 1, 13, 07, 046/-(Rs. 2, 19, 99, 985/- less Rs. 1, 13, 07, 046/-)i. e. the difference as per the P&L account and the TDS certificates have escaped tax. Hence there is under assessment of income. The assessee in the P&L account had claimed the expenditure on account of office rent Rs. 3, 99, 000/-, printing and stationary Rs. 1, 07, 180/-, telephone expenses Rs. 9, 58, 612/-, electricity charges Rs. 1, 99, 177/-, recruitment cost of Rs. 16, 588/-, staff welfare expenditure of Rs. 11, 80, 088/- and salary Rs. 40, 63, 920/-. Whereas, as per the agreement with the lClCl and SB!, all expenditures are reimbursed by the bank Apart from that, as per the assessee's reply dated 20. 09. 20....
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....reopened beyond four years. The Assessing Officer cannot improve upon the reasons for reopening the assessment or bridge the lacunae later. If the reasons disclosed do not indicate the fulfilment of the jurisdictional requirement, the reopening is invalid. " In the case of Tecumseh Products India Pvt. Ltd. (361ITR429), the Hon'ble AP High Court has held as under: "Before any notice is issued after the expiry of four years, the officer concerned must be satisfied that there has been an escapement in assessment of income, which is chargeable to tax and that this is because of the failure on the part of the assessee to make a return under section 139 of the Income-tax Act, 1961, or in response to a notice issued under sub-section (1) of section 142 or section 148 for not disclosing the material facts. These conditions must be reflected in the notice itself. In the absence of the conditions, exercise of jurisdiction in issuance of the notice under the provision is patently illegal. In the case of General Motors India Pvt. Ltd. a reassessment notice was issue after four years and same was challenged before the Hon'ble Gujarat High Court in a writ petition. Allowing the writ fil....
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....epend upon the discretion of the AO. He has to follow it and follow it to the hilt. Any smallest deviation would result in absence of jurisdiction and any order passed without jurisdiction is no order at all. Now, we would like to mention the facts of the case. From the letter issue by the AO to the assessee on 31. 01. 2008(pg. 3of the paper book)because of an audit objection the AO wanted to send a proposal to the CIT for initiating proceedings u/s. 263 of the Act. In that letter the issues were same that are part of the re-assessment notice. Thus, it it clear that the trigger point was an audit objection. We do not want to comment upon the role of Audit parties and their opinions, but it is clear that because of their objection the AO decided to disturb the finality of the assessment that was finalised before four years. From the records it is not clear that why the AO dropped the idea of sending proposal u/s. 263 of the Act and decided to issue notice u/s. 148 of the Act, but it is definite that reassessment notice was not issued because of failure of the assessee. We find that the FAA had noticed certain discrepancies in the reassessment proceedings, so, he had directed t....