TaxTMI 
TaxTMI 
2010 (1) TMI 1147
X X X X Extracts X X X X
X X X X Extracts X X X X
.... per cent for the period April 1, 1999 to January 16, 2000 and at eight per cent for the period January 17, 2000 to March 31, 2000, which is applicable to the. food product. The assessing authority while passing the assessment order on August 20, 2001 levied the tax at 7.5 per cent on the turnover of Rs. 41,76,447 for the period April 1, 1999 to January 16, 2000 and at eight per cent on the turnover of Rs. 16,41,710 for the period January 17, 2,000 to March 31, 2000. It appears that the limitation of four years had expired and, therefore, under the proviso of section 21(2) of the Act notice under section 21 of. the. Act was; issued by the Deputy Commissioner, (Assessment) III, Trade Tax, Agra on the ground that in accordance with law, the rate of tax on the turnover of liquid glucose should be taxable as an unclassified item. The petitioner filed the reply and stated that in the case of Spyers Enterprises, Agra, the Tribunal vide its order dated May 31,1999 and November 19, 2003 has treated the liquid glucose as food product. The Additional Commissioner vide order dated August 6, 2005, has granted the approval to initiate the proceedings under section 21 of the Act beyond the peri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ase may be. ... Explanation I:- Nothing in, this sub-section shall be deemed to prevent the assessing authority from making an assessment or full assessment, to the best of its judgment. Explanation II:- For the purposes of this section and section 22, 'assessing authority' means the officer or authority who passes the earlier assessment order, if any, and includes the officer or authority having jurisdiction for the time being to assess the dealer. Explanation III:- Notwithstanding the issuance of notice under this sub-section, where an order of assessment or reassessment is in existence from before the issuance of such notice it shall continue to be effective as such, until varied by an order of assessment or reassessment made under this section in pursuance of such notice. (2) Except as otherwise provided in this section, no order of assessment or reassessment under any provision of this Act for any assessment year shall be made after the expiration of three years from the end of such year or March 31, 1996, whichever is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he case may be." In Income-tax Officer v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC); [1976] UPTC 809 (SC), the honourable Supreme Court held that the reasons for the formation of the belief contemplated by reopening of an assessment must have a rational connection or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income-tax Officer and the formation of his belief. The honourable Supreme Court further observed that though it is true that the court cannot go into the sufficiency or adequacy of the material and substitute its own opinion for that of the Income-tax Officer on the point as to whether action should be initiated for reopening the assessment yet at the same time we have to bear in mind that it is not any and every material, however, vague and indefinite or distant, remote and far-fetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. The question whether the assessing officer had reasons to believe is a question of jurisdiction, a vital thing, which can always be investiga....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... similar provision under section 147 of the Income-tax Act, 1961 held that the existence of reason to believe on the part of the ITO was a justifiable issue and it was for the court to be satisfied whether in fact the ITO had reason to believe that income had escaped assessment. In Joti Parshad v. State of Haryana [1992] 6 JT 94 (SC), the honourable Supreme Court while dealing with the meaning of expression 'reason to believe' in section 26 of the Indian Penal Code held that the reason to believe is not the same as suspicion and a person must have reason to believe if the circumstances are such that a reasonable man would, by probable reasoning conclude or infer regarding the nature of the thing concerned. In Income-tax Officer v LaKhmani Mewal Das [1976] 103 ITR 437 (SC); [1976] UPTC 809 (SC), the honourable Supreme Court held that the reasons for the formation of the belief contemplated by section 147(a) of the Income-tax Act, 1961, for the reopening of an assessment must have a rational connection or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of t....