TaxTMI 
TaxTMI 
2014 (11) TMI 52
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....see also challenged the notices dated January 3, 2013 under section 143(2) and section 142(1) of the Act. Further, the assessee called in question the order dated August 2, 2013, passed by the Assessing Officer disposing of the objections filed by the petitioner dated February 11, 2013, to the initiation of reassessment proceedings under section 147 of the Act. 3. The appellant-assessee had initially filed a writ petition bearing W. P. No. 13174 of 2013 in this court wherein apart from challenging the very same notice under section 148 and notices under section 143(2) and section 142(1) of the Act, the assessee had also prayed for quashing of the order dated March 6, 2012, whereby their objection to the initiation of reassessment proceedings under section 147 of the Act was rejected. The said writ petition was disposed of by the learned single judge, vide order dated July 23, 2013, issuing directions to the Assessing Officer to consider the objections dated February 11, 2013, and the contentions raised therein and pass appropriate order strictly in accordance with law within the time frame. Accordingly, the Assessing Officer passed a detailed order on August 2, 2013, which is im....
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....Industrial Area, Peenya, Bangalore. The premises of both the concerns were not having any demarcation and were not distinguishable. There was nothing to indicate that the two concerns were separate entities as the management and administration staff of both the companies were the same. In view thereof, after verification of the records, a statement under section 131 were recorded of Sri Sreedhar, general manager (operations) and Sri Nagesh, manager (plant and machineries) of the assessee-company. On the basis of the statements of these two officials of the appellantassessee and the documents/information revealed during the survey of the business premises, it was noticed that M/s. Fibers and Fabrics International P. Ltd. had started its business in 2002 and they claimed and enjoyed the deduction under section 80HHC of the Act. The assessee had also started its business in the same business premises and claimed the deduction under section 10B of the Act from the assessment year 2006-07. It was also noticed that Sri Nagesh, manager (plant and machineries), was working with M/s. Fibers and Fabrics International P. Ltd. and he was later shifted to the assessee-company along with other e....
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....oncluded that there is a reconstruction of business under the name JKPL and claiming of deduction under section 10B." 6. Then the Assessing Officer, after considering the provisions contained in section 10B of the Act, in the reasons for reopening of the assessment dated January 3, 2013, observed thus : "8. Therefore, as per the provision of the Act, the assessee-company is not eligible for claiming deduction under section 10B as it is reconstruction of the business of FFIPL by JKPL. Further, there is also transfer and usage of old plant and machinery by JKPL which has been used by FFIPL. It is also seen that the assessee has failed to maintain individual profit and loss accounts of the units and only a consolidated profit and loss is maintained. 9. The other points which strengthen the fact that it is the reconstruction of the existent business are the following : • Both FFIPL and JKPL are following the same business of manufacture and export of jeans. • The same business premises have been used by both FFIPL and J....
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....ion, we find it appropriate to reproduce the relevant observations made by learned single judge in the order dated August 13, 2013. The relevant observations read thus : 3. The Deputy Commissioner of Income-tax considered the objections filed by the petitioner to the reasons for reassessment proceedings for the assessment year 2006-07 and passed the order dated August 2, 2013, observing that the reopening under section 147/148 of the Income-tax Act for the impugned assessment year 2006-07 is within the legal provisions envisaged under the Act as there are reasons to believe that but for the transfer of the assets of Fibres and Fabrics International P. Ltd., for short 'FFIPL', i.e., its business premises, entire machinery, same business of manufacture and export of jeans and almost all employees including technical and managerial being shifted from FFIPL to the petitioner company, coupled with the testimony of one Nagesh, said to be an employee of FFIPL, later an employee of the petitioner, the new undertaking of the petitioner, could not have come into being and, therefore, the petitione....
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.... petitioner in the exercise of jurisdiction under section 147/148 of the Income-tax Act for the assessment year 2006-07 cannot be said to be either arbitrary or irrational calling for interference in exercise of extraordinary writ jurisdiction under article 226 of the Constitution of India." 8. Learned counsel appearing for the appellant-assessee in support of his contentions before this court placed reliance upon some of the judgments to contend that the proper procedure as laid down by the judicial pronouncements was not followed/adopted for issuing notice under section 148 of the Act. He submitted that having regard to the observations made by the Supreme Court in the judgments, the appellant-assessee has every right to maintain the writ petition to challenge not only the first order passed by the Assessing Officer dated January 3, 2013, but even the subsequent order dated July 23, 2013. The judgments relied upon by the learned counsel in support of his submission are as follows : (1) Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC) ; (2) GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19 (SC) ; (3) CIT v. Dr. N. Thippa Shetty [2010] 322 ITR 525 (Karn) ; (4) Prasha....
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....ssue an order prohibiting an executive authority from acting without jurisdiction. We have already observed that the action initiating proceedings by issuing notice under section 148 is not without jurisdiction. In Kelvinator of India Ltd., the Supreme Court was considering the question whether the concept of "change of opinion" stands obliterated with effect from April 1, 1989, i.e., after substitution of section 147 of the Income-tax Act, 1961, by the Direct Tax Laws (Amendment) Act, 1987 ? It would be relevant to have a glance at the observations made by the Supreme Court in this case, which read thus : "On going through the changes, quoted above, made to section 147 of the Act, we find that, prior to the Direct Tax Laws (Amendment) Act, 1987, reopening could be done under above two conditions and fulfilment of the said conditions along conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act (with effect from April 1, 1989), they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reasons to believe that ....
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....o the other five assessment years, viz., 1992-93, 1993-94, 1994-95, 1997-98 and 1998-99, are now the subject-matter of these appeals. We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under section 148 of the Income-tax Act is issued, the proper course of action for the notice is to file a return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the Assessing Office is bound to dispose of the same by passing a speaking order in the instant case, as the reasons have been disclosed in these proceedings, the Assessing Officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid said five assessment years." The Bombay High Court in Prashanth S. Joshi (supra) was dealing with the notice issued under section 148 of the Act, in the facts and circumstances of that case and, therefore, in our opinion that judgment is of no avail to the appellant-assessee. In Hin....