TaxTMI 
TaxTMI 
2015 (9) TMI 1124
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....er Section 143(1) of the Income Tax Act. 1961 (in short, the Act) and it was selected for scrutiny and a notice under Section 143(2) was issued, calling for the details. Pursuant to the same, the petitioner filed all the details called for by the respondents from time to time. During the scrutiny of the assessment, having considered the materials placed before them, the respondents had completed the assessment under Section 143(3) of the Act on 31.12.2010, determining the total income at Rs. 415,20,26,520/-. Thereafter, it appears that the petitioner filed a rectification application under Section 154 of the Act pointing out certain additions, viz., FBT, nonallowing of brought forward losses, depreciation of earlier years, etc., which according to the petitioner, were the mistakes apparent from the records and accordingly, pleaded to the respondents to rectify the same. The second respondent vide order, under Section 154 of the Act, dated 6.9.2011 was pleased to rectify his order and revised the total income of the petitioner company at Rs. 365,77,16,292/-, thereby allowing the unabsorbed loss and depreciation. It is stated that the petitioner had also filed an appeal against the a....
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.... detailed reply on 19.1.2015 objecting to the jurisdiction to reopen and also on merits of the case. A representative of the petitioner company appeared in person on 19.1.2015 before the respondent and requested for grant of time till 28.1.2015 to file additional submissions. Thereafter, according to the petitioner, since no re-assessment order was served on the petitioner, a writ petition was moved before this Court, however, later it came to know that the re-assessment order was passed on 21.1.2015 and dispatched to the petitioner by speed post. 4. According to the petitioner, the respondent, without giving any opportunity of being heard, passed the impugned order on 20.1.2015 itself, whereas the notice of demand was issued on 21.1.2015, wherein, it was stated that the re-assessment was passed on 20.1.2015. The respondent dispatched the impugned order dated 10.1.2015 by speed post on 22.1.2015 at about 3.14 p.m. much after the petitioner company moved this Court. Therefore, the act of the respondent in completing the re-assessment is not in accordance with the principles of natural justice. Hence, the petitioner has come forward with the present writ petitions. 5. Two separ....
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....he Act. This has been clarified by insertion of a specific section namely Section 115BBE. The above said aspect was not adjudicated in the assessment order and therefore, the question of change of opinion as contended by the petitioner is not valid and is only self service statement. It is also pertinent to note that the CIT (A) has upheld the addition under Section 69A made in the assessment under Section 143(3). With these averments, the respondent sought for dismissal of the writ petitions. 7. Mrs.Nalini Chidambaram, learned senior counsel appering for the petitioner would contend that after four years of the assessment year 2008-09, the respondent issued notice dated 10.12.2013 under Section 148, seeking to reopen the assessment, without any tangible materials and without a finding that income chargeable to tax has escaped assessment by reason of failure on the part of the petitioner to disclose fully and truly all material facts necessary for the assessment which is a precondition for reopening the assessment, which is untenable and that the notice merely stated that the Assessing Officer has 'reason to believe' that the income chargeable to tax for the assessment year 2008....
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....appeals preferred by the Revenue do not raise any substantial question of law." ii) "Allanasons Ltd. Versus DCIT and others" reported in (2014) 369 ITR 648 (Bom) "In terms of the proviso to section 147 of the Income tax Act, 1961, where any assessment is sought to be opened beyond a period of four years from the end of relevant assessment year, two jurisdictional conditions have to be cumulatively satisfied: a) there must be reason to believe that income chargeable to tax has escaped the assessment and (b) such escapement of income should have arisen on account of failure on the part of the assessee to fully and truly disclose all material facts necessary for the assessment. The exercise of jurisdiction has to be examined on the basis of the reasons recorded at the time of issuing the notice. It is not open to the Revenue to substitute or make addition to the reasons recorded at the time of issuing the notice." iii) "Vinod Dhudlal Shah versus ACIT" (2014) 362 ITR 345 (Guj) "Beyond the period of four years, if any notice of reopening of assessment is issued in the absence of any failure on the part of the assessee to disclose fully and truly all the material ....
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....2.2013 has been issued to the petitioner proposing to re-assess the income for the assessment year 2008-09 by the respondent, since the respondent has reason to believe that the income in respect of the said assessment year has escaped assessment within the meaning of Section 147 of the Act. It is relevant to extract Sections 147 to 149 of the Act, which read as under: "147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or re-compute the loss of or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in Sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under Sub-section (3) of Section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expir....
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.... so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139. (2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so. "149. Time limit for notice.--(1) No notice under Section 148 shall be issued for the relevant assessment year,- (a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under Clause (b); (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year. Explanation.--In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 to Section 147 shall apply as they apply for the purposes of that section. (2) The provisions of Sub-section (1) as to the issue of notice shall be subject to the provisions of Section 151. (3) If the person on whom a notice under Section 148 is to be served is a person treated as the agent of a nonresident under Section 163 and....
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....formation of the belief has a rational connection with or a relevant bearing on the formation of the belief and are not extraneous or irrelevant for the purpose of the section. To this extent, action of an Assessing Officer in starting the proceedings under Section 147 in respect of income escaping assessment is open to challenge in a court of law. (ii) The Assessing Officer must have a reason to believe that such income had escaped assessment by reason of failure on the part of the assessee (a) to make a return under Section 139 ; or (b) to respond to the notice issued under Section 142(1) or 148 of the Act, or (c) to disclose fully and truly all the material facts necessary for his assessment of income for that year. 11. Therefore, it is clear that both the aforementioned conditions imposed must co-exist to confer jurisdiction on the Assessing Officer to reopen the assessment under Section 147. Sub-section (2) of Section 148 of the Act makes it imperative for the Assessing Officer to record his reasons before initiating proceedings. Where a notice under Section 147 of the Act is to be issued after the expiry of four years from the end of the relevant assessment year, the Co....
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....our years prescribed in the proviso to Section 147 of the Act for issuance of a notice under the proviso to Section 147. The restriction of four years would be applicable unless the income chargeable to tax has escaped assessment by reason of failure of the assessee to make a return under Section 139 or in response to a notice under Section 142 or 148 of the Act or the failure of the assessee to disclose fully and truly all material facts. If the reassessment is required to be made on account of the failure of the assessee to disclose fully and truly all material facts necessary for his assessment, obviously, the restriction of four years put under the proviso to Section 147 would not be applicable and notice can be issued after the expiry of a period of four years, but within the time limit of 7 or 10 years, as the case may be, prescribed under Section 149 of the Act. The object of Section 149 in imposing the restriction of seven years or ten years where the income likely to have escaped assessment is less than Rs. 50,000 or Rs. 1,00,000, as the case may be, is not to permit reopening of the assessment where the tax liability would not be significant as compared with the efforts t....
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....der Section 68 & 69 A. The assessment was revised which interalia included to allow the assessee's claim for set off of unabsorbed depreciation aggregating to Rs. 45.18 crores relating to assessment year 2004-05 and unabsorbed business loss of Rs. 4.15 crores relating to assessment year 2005-06. The above addition under Section 68 & 69 A is deemed income of the assessee and does not come under any heads of income specified in Chapter IV of the Income-tax Act, 1961 and hence brought forward business loss and depreciation cannot be set off against this as per Section 72." 15. Therefore, a perusal of the above, it indicates that the Assessing Officer has a reason to believe that the income, viz., unabsorbed depreciation and business loss and depreciation, which was allowed to be set off by the respondent in revision proceedings, dated 6.9.2011, has escaped assessment within the meaning of Section 147 of the Act and accordingly, the respondent has rightly initiated the proceedings. It is to be noted that pursuant to the above notice and communication of reasons, the petitioner has raised objections which were duly considered by the respondent and rejected by proceedings dated 12.1.2....
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....be from the date on which, the petitioner has filed a rectification petition under Section 154 of the Act, i.e. on 25.1.2011 wherein, as already stated, for the first time, brought the subject material, viz., unabsorbed depreciation and business loss of earlier years. Then, the reopening of the assessment is well within the period of four years and it cannot be construed that the respondent has proceeded to reassess the income for the assessment year 2008-09 beyond four years since the notice under Section 148 of the Act has been issued on 10.12.2013. Therefore, once it is clear that the reassessment was proposed within the period of four years, the present case does not fall under proviso of the Section 147 of the Act, which makes an embargo on the assessing officer to make reassessment beyond four years on the account of failure on the part of the assessee to fully and truly disclose all material facts necessary for assessment. Hence, the issuance of the impugned proceedings, viz., show cause notice under Section 148 of the Act, dated 10.12.2013 and the reassessment order, dated 20.1.2015 by the respondent on the ground that he has reason to believe that the income, which is char....
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....s having an efficacious remedy. In this regard, it is worthwhile to refer to the decision of the Hon'ble Supreme Court, reported in CIT v. Chhabil Dass Agarwal, (2014) 1 SCC 603, at page 611, wherein, it has been held as under: "15. Thus, while it can be said that this Court has recognised some exceptions to the rule of alternative remedy i.e. where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathmal case22, Titaghur Paper Mills case3and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be....