AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 118
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....ssed u/s. 143(1) of the Act thereby accepting the returned income of Rs. 2,94,233/-. No Scrutiny assessment in this case has been made for the AY 2009-10. In this case an information received from ADIT (Inv.)-I, Rajkot vide letter No. RJT/ADIT(Inv.)-I/Bhoomidev Beneficiaries/2015-16/4799 dated 22/03/2016 whereby it was intimated that during the assessment proceedings of M/s. Kutch Ginning and Spinning P Ltd., Gandhidham it was found that it had received Share Application Money/premium of Rs. 75.00 Lacs from a non-descript company namely- M/s. Bhoomidev Credit Corporation Ltd. which was after conduct of enquiry through DDIT (Inv.), Ahmedabad found to be non-genuine. During enquiry statement of Director of M/s. Bhoomidev Credit Corporation Ltd. was also recorded, who have accepted the fact that the company was indulged in issuance of cheque on receiving equivalent cash. It was also intimated that this company has made investment of Rs. 10,00,000/- in the assessee company as 'Share application money' vide two cheques dated 13/02/2009 and 14/0/2009 of Rs. 5.00 lacs each. This lead to conclusion that the assessee company is one of the beneficiaries of receiving such acc....
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....s necessary. These aspects were discussed at length by the Supreme Court in case of Assistant Commissioner of Income Tax vs. Rajesh Jhaveri Stock Brokers P. Ltd. reported in 291 ITR 500 in which following observations were made: "13. One thing further to be noticed is that intimation under section 143(1)(a) is given without prejudice to the provisions of section 143(2). Though technically the intimation issued was deemed to be a demand notice issued under section 156, that did not per se preclude the right of the Assessing Officer to proceed under section 143(2). That right is preserved and is not taken away. Between the period from April 1, 1989 to March 31, 1998, the second proviso to section 143(1)(a), required that where adjustments were made under the first proviso to section 143(1)(a), an intimation had to be sent to the assessee notwithstanding that no tax or refund was due from him after making such adjustments. With effect from April 1, 1998, the second proviso to section 143(1)(a) was substituted by the Finance Act, 1997, which was operative till June 1, 1999. The requirement was that an intimation was to be sent to the assessee whether or not any adjustment had ....
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....icer had to pass an assessment order if he decided to accept the return, but under the amended provision, the requirement of passing of an assessment order has been dispensed with and instead an intimation is required to be sent. Various circulars sent by the Central Board of Direct Taxes spell out the intent of the Legislature, i.e., to minimize the departmental work to scrutinize each and every return and to concentrate on selective scrutiny of returns. These aspects were highlighted by one of us (D. K. Jain J) in Apogee International Limited v. Union of India [(1996) 220 ITR 248]. It may be noted above that under the first proviso to the newly substituted section 143(1), with effect from June 1, 1999, except as provided in the provision itself, the acknowledgment of the return shall be deemed to be an intimation under section 143(1) where (a) either no sum is payable by the assessee, or (b) no refund is due to him. It is significant that the acknowledgment is not done by any Assessing Officer, but mostly by ministerial staff. Can it be said that any "assessment" is done by them? The reply is an emphatic "no". The intimation under section 143(1)(a) was deemed to be a notice of de....
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.... of section 147, separate clauses (a) and (b) laid down the circumstances under which income escaping assessment for the past assessment years could be assessed or reassessed. To confer jurisdiction under section 147(a) two conditions were required to be satisfied firstly the Assessing Officer must have reason to believe that income profits or gains chargeable to income tax have escaped assessment, and secondly he must also have reason to believe that such escapement has occurred by reason of either (i) omission or failure on the part of the assessee to disclose fully or truly all material facts necessary for his assessment of that year. Both these conditions were conditions precedent to be satisfied before the Assessing Officer could have jurisdiction to issue notice under section 148 read with section 147(a) But under the substituted section 147 existence of only the first condition suffices. In other words if the Assessing Officer for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. It is however to be noted that both the conditions must be fulfilled if the case falls within the ambit of the proviso to sec....