AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (1) TMI 51
X X X X Extracts X X X X
X X X X Extracts X X X X
....income from profit from the aforesaid AOP, profit from sale of immovable property and bank interest. On 31.08.2015 the respondent issued a query letter with regard to cash deposit, income from property and liquor purchase/sale relating to Assessment Year (AY) 2009-10. The petitioner/assessee vide reply dated 16.10.2015 answered the queries in light of the fact that the queries made from the petitioner relate to the activities of the aforementioned AOP and the fact that the department is already seized of the duly Audited Report and Audited Final Accounts submitted, in compliance of section 44AB of the Act, by the petitioner/assessee. Thereafter, the petitioner/assessee received a letter dated 27.05.2016 and annexed thereto was notice u/s 148 of the Income Tax Act, 1961 (for short, the Act) dated 31.03.2016. The petitioner alleges that vide letter dated 27.05.2016, the petitioner/assessee was made aware of the notice dated 31.03.2016 issued u/s 148 of the Act for the first time. The petitioner/assessee vide reply dated 06.06.2016 acknowledged receipt of letter dated 27.05.2016 and enquired as to the reasons for reopening the Assessment with respect to AY 2009-10 008-09). The respond....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ctions dated 20.6.2016, the respondent issued a fresh notice dated 25.07.2016 u/s 142(1) without serving upon the petitioner/assessee the notice u/s 148 within the stipulated time frame and as such the notice issued u/s 142(1) dated 07.06.2016 and 25.07.2016 is against the letter and spirit of the Income Tax Act, 1961. According to the petitioner, the reasoning of the respondent Department is purely hypothetical inasmuch as the allegation of escapement of Rs. 75,00,000/- worth of property sold on 11.07.2008 is not only wrong but made out of misleading objective of initiating proceedings u/s 147/148 of the Act. This fact was very well disclosed by the petitioner before the Assessing Officer in the Income Tax Return for A.Y. 2009-10, submitted online within stipulated time on 17.03.2011. The sales of the property (jointly held with father in law) were effected by two separate sale deeds, vide sale deed dated 08.08.2008 amount to Rs. 75,00,000/- and sale deed dated 11.07.2008 amounting to Rs. 2,25,00,000/-. Out of the aforesaid properties, the petitioner/assessee had one half share i.e. Rs. 1,50,00,000/- which was offered for tax and tax thereon was paid. Thus, it is clear that allege....
X X X X Extracts X X X X
X X X X Extracts X X X X
....16) on the basis of incorrect appreciation of facts, irrelevant to the petitioner/assessee and has proceeded in furtherance of the aforesaid time barred notice u/s 148 by issuing the notice u/s 142(1) of the Act dated 07.06.2016 while concealing the fact that notice u/s 142(1) of the Act, for the relevant year, had been issued earlier to the petitioner on 26.8.2011 and thereby has prevented himself from recording the same in the reasons for reopening the assessment for the relevant year u/s 147 as also has successfully prevented the Principal Chief Commissioner from appreciating the true and complete position in order to grant his approval on the aforesaid reasons. 3. Counter affidavit has been filed by the respondent. Few paragraphs, which are relevant, are as follows: "3. That the assessee Shri Maruti Nandan Sah filed his ITR for A.Y. on 12.03.2011 declaring total taxable income at Rs. 18,68,110/- the said return was processed u/s 143(1) of the I.T. Act, 1961 accepting the return income. 4. That this office received online PAN based AIR information regarding following transactions in respect of Shri Maruti Nandan Sah for A.Y. 2008- 09. i) Deposited cash of Rs. 10 lakh or m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 19.05.2016. In response the A.R. representative of assessee Shri Pawan Kumar Nath, FCA attended and furnished that return filed on 17.03.2011 may be treated a return filed in response to above notice. Assessee also requested to provide with him the reasons for re- opening the case which have been duly served to the assessee. 17. That in reply to the facts mentioned in Para No.6 of the affidavit it is submitted that the assessee reply was not found suitable since the assessee submitted in his reply that the queried transactions are related to the AOP M/s Maruti Sah & Bros, PAN AABAM0677P whereas the AIR information particularly pertains to the personal saving bank account of the assessee. 18. That in reply to the facts mentioned in para no.7 & 8 of the affidavit it is submitted that the assessee was given notice u/s 148 of the I.T. Act, 1961 dated 31.03.2016 which was duly received by the assessee representative Shri Nirmal Kumar on 31.03.2016 itself. The approval from the competent authority has been duly taken before issuing the above notice. The ITR for A.Y. 2009-10 in the respect of the assessee was processed u/s 143(1) of the I.T. Act, 1961 accepting the return of income.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to the assessee representative Shri Nirmal Kumar on 31.03.2016 itself. The receiving of the said notice has been duly acknowledged by the recipient. 4. Learned counsel for the petitioner submits that the petitioner/assessee had filed his return for the relevant Assessment Year 2009-10, online within stipulated time on 17.03.2011. The Department initiated scrutiny assessment proceedings by way of issuance of notice u/s 142(1) dated 26.08.2011. The respondent Department on the basis of AIR information available with the Department issued a query letter dated 31.08.2015 to Maruti Nandan Sah in his capacity as an individual assessee, inasmuch as the Assessee is identified by his PAN BBXPS5336N in the said query letter and sought explanation to the amount of Rs. 1,74,76000/- and Rs. 2,05,23,993/- for the Financial Year 2008-09. He further submits that the Respondent issued notice u/s 148 dated 31.03.2016 which was served upon the Assessee for the first time vide letter dated 27.05.2016. Further, the Respondent Department claims to have served the notice u/s 148 dated 31.3.2016 on 31.03.2016 itself upon one Nirmal Kumar, who is neither the Assessee nor his Authorized Representative, whe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on the judgment of Hon'ble Apex Court passed in the case of Auto & Metal Engineers v. Union of India (UoI), 1997 (7) SCC 734. Para-7 of the judgment is relevant, which is reproduced below: "7. In the Act the provisions regarding procedure for assessment are contained in Chapter XIV (Sections 139 to 158). Under the said provisions the process of assessment involves (i) filing of the return of income under Section 139 or under Section 142 in response to a notice issued under Section 142(1); (ii) inquiry by the Assessing Officer in accordance with the provisions of Sections 142 and 143; (iii) making of the order of assessment by the Assessing Officer under Section 143(3) or Section 144; and (iv) issuing of the notice of demand under Section 156 on the basis of the order of assessment. The process of assessment thus commences with the filing of the return or when the return is not filed by the issuance by the Assessing Officer of the notice to file the return under Section 142(1) and it culminates with the issuance of the notice of demand under Section 156. The making of the order of assessment is, therefore, an integral part of the process of assessment. Having regard to the fact th....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../s 147/148 after 31.03.2014 i.e. after expiry of four years from the end relevant Assessment Year AY 2009-10 is concerned, learned counsel for the respondent submits that in the present case the Assessing Officer neither passed any order in case of the petitioner u/s 143(3) of the Income Tax Act nor issued any notice u/s 143(2) as per the mandatory requirement, and as such the petitioner cannot claims the benefit of Proviso to Section 147 of the Act, and further that before 31.03.2016, no notice was ever issued to the petitioner u/s 148 of the Act. Besides this, learned counsel also points out that the proviso to Section 147 gives power to the Income Tax Authority for issuance of the notice if the Assessing Officer finds, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure. The said proviso further gives power to the Income Tax Authority for issuance of notice, where the department finds the escaped assessment in case. He further submits that in the present case the notice was issued to the petitioner on the basis of AIR Information received and reason thereof has been recorded by the Income Tax Officer. He further submits th....