TaxTMI 
TaxTMI 
2006 (9) TMI 86
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.... Rs.92,40,000/-. The total cost of transaction along with the cost of registration was Rs.1,00,41,925/-. Thereafter, the petitioner had purchased a flat in Chennai in the month of March 2000 for a sum of Rs.30 lakhs. Based on the above transaction, the firm had filed its return of income on November 13, 2000 declaring a business loss of Rs.3,60,412/- and short-term capital gains of Rs.1,16,51,612/-. Thus, the total income that was declared was Rs.1,12,91,200/- and accordingly, the petitioner paid Income Tax of Rs.46,68,528/-. (c) The Income Tax assessment as per Section 143(1) of the Income Tax Act ("the Act") was completed on January 04, 2002 and an intimation dated January 04, 2002, ordering a refund of Rs.1,45,563/- was received by the petitioner on February 18, 2004. In the said intimation sent by the respondent, there were certain mistakes and hence, the petitioner firm filed a petition under Section 154 of the Act for rectification of the same. (d) This being the position, on March 19, 2005, the petitioner firm received a notice dated March 18, 2005 under Section 148 of the Act, i.e. nearly after three years of the final assessment. Acco....
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....details. In this situation, the petitioner had repeatedly requested the respondent to furnish the reasons for re-opening the assessment. The respondent, as an after-thought, furnished irrelevant reasons in his letter which were not disclosed in the notice issued under Section 148 and hence, the impugned assessment order dated March 31, 2006 is in total violation of the principles laid down in this regard and the same is challenged in this writ petition. 4. The main grounds of challenge in this writ petition are that (i) under the Act, the opinion given in an assessment cannot be reopened by any other authority except on fresh materials, (ii) it is settled law that along with notice issued under Section 148, reasons should be given or annexed along with notice itself and therefore, the entire proceedings is vitiated, (iii) the impugned assessment order issued without giving any opportunity to the petitioner and without verifying any fresh materials is liable to be quashed, (iv) in the absence of any new material, the assessing officer is not empowered to re-open an assessment irrespective of the fact whether it is made under Section 143(1) or 143(3) of the Act, (v) the impugn....
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....s, the learned counsel for the petitioner has relied on various decisions of the Supreme Court, namely, the decisions reported in the case of (a) Andhra Bank Ltd. v. CIT [1997] 225 ITR 447, (b) in the case of GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19 (c) in the case of Ram Bai v. CIT [1999] 236 ITR 696 ; [1999] 3 SCC 30 (Paragraph 6 AND 7). 7. While admitting the writ petition on 27.04.2006, this Court had ordered notice to the respondent and granted an order of interim stay. 8. Mr. M. Muralikumaran, learned counsel for the respondent, on instruction from the respondent, has contended that the impugned order issued by the respondent is legally valid as the petitioner has not furnished the particulars such as (i) the nature of business conducted during the year at Mumbai ; (ii) details for liabilities for "Other Finance", names and addresses of parties and confirmation from the parties ; (iii) confirmation from retired partner for amount due to him ; (iv) debit entries in the partners' current accounts regarding Bharat Diamond Bourse, distribution of stocks and goodwill written off ; (v) nature of service rendered by parties at Mumbai for whom salar....
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....ection 148(2) The Assessing Officer shall, before issuing any notice under this Section, record his reasons for doing so." Time limit for completion of assessments and re-assessments : Section 153(2) "No order of assessment, re-assessment or re-computation shall be made under Section 147 after the expiry of one year from the end of the financial year in which the notice under Section 148 was served. 10. Having dealt with the relevant provisions of the Income Tax Act, let met now proceed to analyse the various case laws necessary for deciding this appeal and they are as under : (i) In the judgment of the Supreme Court reported in the case of Andhra Bank Ltd. v. CIT, [1997] 225 ITR 447 in it was held as under: "Once it is found that the change in the method of accounting was knowingly allowed by the Income Tax Officer taking into account all the relevant facts, it is not permissible for the Income Tax Officer, or his successor, to reopen the assessment at a later point of time under Section 147(b) of the Income Tax Act unless any information comes from an extraneous source. Further, we fail to see what is the 'information' available to the Income Tax Officer in this case....
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....he assessee has filed a return disclosing an income of Rs.3,599/- being interest on belated compensation on February 17, 1972. As this has been filed beyond the period prescribed under Section 139(4), the return has been treated as invalid and filed. I have, therefore, reason to believe that the income chargeable to tax has escaped for Assessment Year 1965-66 and that such escapement was by reason of omission or failure on the part of the assessee to make a valid return under Section 139 for Assessment Year 1965-66. I request the Commissioner to accord sanction for reopening the assessment under Section 147(a)." 7.Apart from the said communication, there is nothing on record to disclose the material on which the Income-tax Officer decided to reopen the assessment. He has made an assertion in the said communication that the land in question was not subjected to agricultural operation and that he had reason to believe, the income chargeable to tax had escaped from Assessment Year 1965-66 by reason of omission or failure on the part of the assessee to make a valid return. But for such assertion, no reference has been made to any material on the basis of which he proceeded to invoke t....