TaxTMI 
TaxTMI 
TaxTMI 
2004 (2) TMI 40
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....ted to transfer all pending cases of the erstwhile Anagram Finance Ltd. to the Deputy Commissioner of Income-tax, Circle 3(1), Mumbai, under whose jurisdiction ICICI Ltd. was assessed. Thereafter, the ICICI Ltd. merged with ICICI Bank Ltd. with effect from March 30, 2002. Thus, the fact that Anagram Finance Ltd. had ceased to exist with effect from April 1, 1998, was made known to the Income-tax authorities at Ahmedabad by ICICI Ltd. vide letter dated November 27, 2001. In spite of the knowledge about the non-existence of Anagram Finance Ltd., the impugned notices, both dated October 17, 2002, have been issued under section 148 of the Income-tax Act, 1961 ("the IT Act" for short), to Anagram Finance Ltd. for the purpose of reopening the assessments for the assessment years 1996-97 and 1997-98. The validity of these notices is challenged in the present petitions by ICICI Bank Ltd. mainly on two grounds. Firstly, it is contended that the notices issued to a non-existing company, namely, Anagram Finance Ltd., are in contravention of the conditions precedent required to be fulfilled before initiating proceedings under section 148 of the Income-tax Act and, secondly, it is contended th....
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....ction 148 of the Income-tax Act and if the notice is invalid or is not served on the proper person in accordance with law, then the assessment will be illegal and without jurisdiction. She submitted that failure to issue notice or issuing notices in the name of a dead person is a fundamental infirmity and such a fundamental infirmity cannot be called a technical infirmity or a mere irregularity and such a vital infirmity cannot be cured or obliterated by relying on section 292B of the Income-tax Act. In this connection, learned counsel for the petitioners relied upon the judgment of the Kerala High Court in the case of P. N. Sasikumar v. CIT [1988] 170 ITR 80, the decisions of the Allahabad High Court in the case of CIT v. Smt. Phoolmati Devi [1983] 144 ITR 954; Modi Sugar Mills Ltd. v. Union of India [1983] 144 ITR 29, the decision of the Calcutta High Court in the case of Gajendra Kumar Banthia v. Union of India [1996] 222 ITR 632 and CIT v. Bibhuti Bhusan Mallick [1987] 165 ITR 107; Shyam Sunder Bajaj v. ITO [1973] 89 ITR 317 the decision of the Madhya Pradesh High Court in the case of Shaikh Abdul Kadar v. ITO [1958] 34 ITR 451 and the decision of the apex court in the case of ....
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....on the part of the assessee to disclose fully and truly all material facts, then the reassessment proceedings beyond the period of four years from the end of the relevant assessment year, cannot be initiated under section 147/148 of the Income-tax Act. In this connection, learned counsel for the petitioners relied upon the decisions of this court in the case of IPCA Laboratories Ltd. v. Gajanand Meena, Deputy CIT (No. 2) [2001] 251 ITR 416 and Bhor Industries Ltd. v. Asst. CIT [2004] 267 ITR 161. Mr. Desai, learned senior advocate appearing on behalf of the respondents, on the other hand, submitted that issuing notices under section 148 of the Income-tax Act to Anagram Finance Ltd. at the highest can be said to be a mere irregularity and not an illegality and such an irregularity is saved by the provision of section 292B of the Income-tax Act. He submitted that though notices were issued to Anagram Finance Ltd., it was shown as "C/o. ICICI Bank Ltd." and in fact the notice has been received by the ICICI Bank Ltd. Therefore, the notices impugned in these petitions may not be held to be invalid as in substance and in effect the same are in conformity and in accordance to the intent ....
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.... depreciation, though not eligible, amounts to failure on the part of the assessee to disclose fully and truly all material facts necessary for the purpose of assessment. On account of the failure on the part of the assessee to disclose fully and truly all material facts, income chargeable to tax has escaped assessment within the meaning of section 147 of the Income-tax Act for which notices have been rightly issued by the Assessing Officer. Accordingly, it was submitted that there is no infirmity in the notices issued under section 148 of the Income-tax Act and there is no merit in the writ petitions filed to challenge the impugned notices. We have heard counsel on both sides. Basically, two issues arise in these two petitions. Firstly, whether the notices both dated October 17, 2002, issued under section 148 of the Income-tax Act to Anagram Finance Ltd. a company which had ceased to exist with effect from April 1, 1998, are valid in law. Secondly, assuming that the notices issued in the name of Anagram Finance Ltd. are valid, in the absence of any material on record to show that there was any failure on the part of the assessee to disclose fully and truly all material facts nece....
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....a period of four years from the end of the relevant assessment years only if there is failure on the part of the assessee to disclose fully and truly all material facts necessary for the purpose of assessment. Having furnished all material facts even if an assessee erroneously claims higher depreciation, it will not be a case of failure to disclose fully and truly all material facts. At what rate the depreciation is to be claimed is a matter of legal inference to be drawn from the material facts. If the legal inference drawn from the material facts is erroneous it cannot be said that there is failure on the part of the assessee to disclose material facts. In the present case, on the material facts disclosed, the assessee had claimed depreciation at 40 per cent, and the same was allowed by the Assessing Officer. It is not the case of the Revenue that the facts disclosed by the assessee were incorrect or that there were any other facts which were material for the assessment which have not been disclosed by the assessee. Under the circumstances, if there is no failure to disclose material facts, then, even if there is excess relief granted, the assessments cannot be reopened beyond th....