TaxTMI 
TaxTMI 
2017 (1) TMI 321
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.... in respect of A.Y. 2010-2011 AND 2011-12. The petitioner has further stated in the Writ Petition that while the settlement proceedings were going on before the Settlement Commission, an application for intervention was preferred by the petitioner and the Settlement Commission has rejected the application preferred by the petitioner for intervention and has finally passed order dt. 10/5/2016 in respect of respondent No.5. The petitioner's grievance is that based upon the order passed by the Settlement Commission, proceedings have been initiated by issuing notice u/S. 148 of the Income Tax Act, 1961 and as the petitioner was not heard by the Settlement Commission, the notice issued by the Assessing Officer deserves to be quashed. Petitioner has further stated that the order passed by the Settlement Commission is bad in law as the petitioner was not heard at any point of time and certain income of respondent No.5 has been excluded from his total income on the ground that it belongs to the petitioner and, therefore, the order passed by the Settlement Commission is bad in law, being violative of principles of natural justice and fair play. The petitioner also stated that the order ....
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....before the Settlement Commission, as respondent No.5 has stated that certain part of income receipts were in respect of amount received by the petitioner and the Settlement Commission has dismissed the intervention application. The intervention application was filed on 28/2/2016. The intervention application was dismissed by the Settlement Commission and the Settlement Commission has passed a final order in the matter. Sec. 147 and 148 of the Income Tax Act, 1961 reads as under : Section 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 recompute the loss 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 sect....
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....d at too low a rate ; or (iii) such income has been made the subject of excessive relief under this Act ; or (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed; (d) where a person is found to have any asset (including financial interest in any entity) located outside India. Explanation 3.-For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148. Explanation 4.-For the removal of doubts, it is hereby clarified that the provisions of this section, as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012. Section 148. (1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee ....
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....Show Cause Notice were issued on 31/3/2016 and 21/3/2016 u/S. 148 for the assessment year 2010-2011 and 2011-2012. One of the Show Cause Notice for the assessment year 2011-2012 reads as under : OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX (CENTRAL)-I "Aayakar Bhawan (Main)" Room No.101, Opp. White Church, A.B.Road, Indore NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 PAN.AAFFG5813Q dated 31/03/2016 To, M/s. Goyal Developers INDORE Sir/Madam, Whereas I have reasons to believe that your income chargeable to tax for the assessment year 2010-11 has escaped assessment within the meaning of section 147 of the Income Tax Act 1961. I, therefore, propose to assess/re-assess/re-compute the income/loss/depreciation allowance for the said assessment year and I hereby require you to deliver to me within 30 days from the date of service of this notice, a return in the prescribed form of your income for the said assesment year. (Amit Kumar Soni) Assistant Commissioner of Income Tax(Central)-I Indore The other Show Cause Notice is per verbatim iden....
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....s claimed that it has paid Rs.35,81,24,267/- to the land owners M/s Goyal Developers as accounted income and balance Rs. 19,69,65,493/- was the unaccounted receipts belonging to the assessee. The accounted receipt of Firm M/s Goyal Developers is quantified year wise as per below:- A. Y. Number of Plots Total Unaccounted Receipts Collected by M/s Divya Dev Developers Pvt. Ltd. Unaccounted Receipts collected on behalf of and paid to M/s Goyal Developers 2010-11 37 17,16,77,580/- 17,16,77,580/- 2011-12 48 22,78,32,433/- 18,64,46,687/- Therefore, it is clear and evident that M/s Goyal Developers have received accounted on-money of Rs. 17,16,77,580/- for A.Y. 2010-11. In view of the above, I have reason to believe that income earned on account of on-money receipts in respect of the project "Uptown Apollo" which has not been incorporated in the books of account of the assessee M/s Goyal Developers and the same Rs.17,16,77,580/- for A.Y. 2010-11 has been escaped from assessment as normal income within the meaning and scope of section 147 subject to 148 of the I.T. Act to assess of reassess income of the assessee for the concerned A.Y. ....
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....utely shame and fake. An affidavit of Shri Pram chand Goyal, partner of Goyal Developers Indore along with (Annexure P/1 to P/7 have been filed. It has been prayed that intervention application be allowed, an opportunity of being heard be allowed to the intervenor and any false claim of payment of on-money made by M/s. Divya Deve Developers Pvt. Ltd., to M/s. Goyal Developers be disallowed. We note that the jurisdiction of the Commission is confined to matters covered by a settlement application made by an applicant before us. In the settlement application, an applicant is required to make a full and disclosure of his income not disclosed to the AO, by bringing on record all material facts relevant for determination of his undisclosed income along with manner of having earned such income. The application is regarding settlement of applicants case and the proceedings before the Commission are not in the nature of appeals as an applicant can file settlement application only during the pending of assessment proceedings. Hence there does not arise any question of permitting intervention by another tax payer. As per provision of Sec. 245D(4) the commission can pass an ....
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....should be granted liberty to proceed in the matter and thereafter take a decision after evaluating each and every aspect of the matter. This is also the principle laid down by the Supreme Court in the case of Vijaybhai N. Chandrani (supra) relied upon by the learned Counsel for the Revenue. In the said case, the Hon'ble Supreme Court has held that the assessee cannot be permitted to invoke writ jurisdiction of the High Court at the first instance without exhausting the statutory remedy available under the Income Tax Act. It was held by the Hon'ble Supreme Court in the said case that in the stage of assessment of the proceeding the High Court ought not to have entertained the writ petition, instead should have directed the assessee to appear before the AO, permit him to take a decision and after framing of assessment order, the assessee should seek indulgence into the matter. In para 16 and 17 of the said judgment, Hon'ble Supreme Court has dealt with the matter in the following manner :- "16. In the present case, the assessee has invoked the Writ jurisdiction of the High Court at the first instance without first exhausting the alternate remedies provided under ....
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.... not warranted. 18. The petition is therefore, dismissed. The Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd., Vs. Income Tax Officer and others (C.A.No. 7731/2002, decided on 25/11/2002) has held as under : Heard learned counsel for the parties. Leave is granted. By the order under challenge, a Division Bench of the High Court at Delhi dismissed the writ petition filed by the appellant challenging the validity of notices issued under Sections 148 and 143(2) of the Income Tax Act, 1961. The High Court took the view that the appellant could have taken all the objections in its reply to the notices and that, at that stage, the writ petition was premature. Accordingly, the writ petition was dismissed on 31st January, 2001. Aggrieved by that order, the appellant is in appeal before us. Mr. M.L. Verma, learned senior counsel appearing for the appellant, submits that the impunged notices relate to seven assessment years; that during the pendency of these appeals, in respect of two assessment years, viz., 1995-96 and 1996- 97, assessment has been completed against which appeals have been filed. Notices relating to the other five....