TaxTMI 
TaxTMI 
2015 (8) TMI 517
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..... 20,16,957 was issued. Subsequently, the Assessing Officer ("AO") passed an order recording "reasons for belief that income has escaped assessment". In this order the AO noted that in the Audit Report under Section 44AB in Form 3CD, the Statutory Auditor had reported that the management service fee to the extent of Rs. 1,36,89,075 payable to Tupperware International Holdings EV Ltd. was paid without deducting tax at source. Since the said deduction was inadmissible under Section 40 (a) (i) of the Act, the AO held that he had reasons to believe that the aforementioned amount had escaped assessment and consequently issued notice to the Assessee under Section 148 of the Act on 21st October 2005. 4. In the resultant assessment order dated 28th December 2006, the AO recorded that "since the Assessee did not raise any objection to the proposed reassessment after having conveyed the reasons recorded under Section 148 of the Act, there is no need to dispose of the same prior to reassessment." 5. Apparently, the Assessee did raise an objection to the order of the AO reopening the assessment. In the order dated 28th January 2011 allowing the Assessee"s appeal, the Commissioner of Income T....
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....ot challenged by the Revenue before the ITAT in ITA No. 2140/Del/2011 for 2003-04. With the Revenue not having challenged the order of the CIT (A) deleting the disallowance made by the AO pursuant to the reopening of the assessment, the challenge by the Revenue only to that portion of the order of the ITAT holding that the reopening was not legally sustainable, renders the issue academic. 9. Consequently, for both the aforementioned reasons, viz., that there was a failure by the AO to comply with the mandatory requirement of disposing of the objections of the Assessee to the reopening in terms of the law explained by the Supreme Court in G.K.N. Driveshafts (India) Ltd. (supra) as well as on account of the failure of the Revenue to challenge before the ITAT the order of the CIT (A) deleting on merits the disallowance made by the AO of the management service fee consequent upon reopening of the assessment, there appears to be no need to examine the issue projected by the Revenue in this appeal viz., the justification for re-opening the assessment under Section 147/148 of the Act. 10. Nevertheless, the Court has examined the above issue as well. The ITAT relied essentially on the de....
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..... The Court observed that the decision in Rajesh Jhaveri Stock Brokers P. Ltd. (supra) "contrary to what the Revenue would have us believe, does not give a carte blanche to the Assessing Officer to disturb the finality of the intimation under Section 143 (1) at his whims and caprice; he must have reason to believe within the meaning of the Section." The Court in Orient Craft Ltd. recorded that the decision in Rajesh Jhaveri Stock Brokers P. Ltd. underscored that the intimation under Section 143 (1) of the Act could be disturbed by initiating reassessment proceedings only: "so long as the ingredients of Section 147 are fulfilled and with reference to Section 143(1) vis-a-vis Section 147, the only ingredient is that there should be reason to believe that income chargeable to tax has escaped assessment and it does not matter that there has been no failure or omission on the part of the assessee to disclose full and true particulars at the time of the original assessment. There is nothing in the language of Section 147 to unshackle the Assessing Officer from the need to show "reason to believe". The fact that the intimation issued under Section 143(1) cannot be equated to an "assessme....
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....s to reopen the assessment. An interpretation which makes a distinction between the meaning and content of the expression "reason to believe" in cases where assessments were framed earlier under Section 143(3) and cases where mere intimations were issued earlier under Section 143(1) may well lead to such an unintended mischief. It would be discriminatory too. An interpretation that leads to absurd results or mischief is to be eschewed." 17. The Court in CIT v. Orient Craft Ltd. (supra) further comprehensively rejected the argument of the Revenue, which it seeks to urge in the present case as well, that an 'intimation' under Section 143 (1) cannot be equated to an assessment. The Court held: "The argument of the revenue that an intimation cannot be equated to an assessment, relying upon certain observations of the Supreme Court in Rajesh Jhaveri (supra) would also appear to be self-defeating, because if an "intimation" is not an "assessment" then it can never be subjected to Section 147 proceedings, for, that section covers only an "assessment" and we wonder if the revenue would be prepared to concede that position. It is nobody"s case that an "intimation" cannot be subjec....