TaxTMI 
TaxTMI 
2018 (1) TMI 675
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....e tax department on 12.09.2011 and finally the Assessing Officer after completing the assessment passed an assessment order under Section 143 (3) of the Act on 21.03.2013. However, after 4 years time, the income tax department had issued a notice under Section 148 of the Act for reopening of the assessment proceeding for the year 2010-11. The petitioner filed reply to the said notice and also requested for supply of copy of reasons to believe recorded for issuance of the notice under Section 148 of the Act. On 03.08.2017 the petitioner was served upon a notice under Section 142 (1) of the Act giving reasons to believe for re-opening assessment along with sanction for reopening obtained under Section 151 of the Act. That, on 30.08.2017 the petitioner filed an objection against issuance of notice under Section 148 of the Act and the reasons recorded. This objection was finally rejected vide impugned order dated 25.09.2017 leading to filing of present petition. 4. The contention of the petitioner is that, firstly the issuance of notice under Section 148 was per se illegal as the same was issued beyond the prescribed period of limitation under the Act i.e. of four years. Secondly, the....
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.... there was no tangible material available with the department which they have collected in the course of survey which was conducted on 26.09.2016. 8. Counsel for the Department opposing the petition submits that the petition is premature at this stage and is not maintainable for the reason that the petitioner has an alternative efficacious remedy of preferring an appeal against the impugned order. It is the contention of the counsel for the Department that the petition on merits also is not worth entertaining for the reason that the impugned order under challenge i.e. the rejection of the objection filed by the petitioner and the issuance of notice under Section 148 of the Income Tax Act are proper, legal and justified. That perusal of the order rejecting the objection would clearly show that it is a reasoned order objectively dealing with all the issues which were raised by the petitioner and since it has been done in accordance with the provisions of law, there is no scope for any judicial interference at this stage and the petitioner may prefer an appeal as is envisaged under the provisions of the Income Tax Act. 9. So far as the issue of limitation is concerned, counsel for t....
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.... concerned, it was contended by the counsel for the Department that the said judgments are all distinguishable on their facts itself and that the facts of the instant case cannot be equated and compared with those cases. In the instant case, there were certain substantial materials detected during the course of survey whereby it was found that there was a huge amount income undisclosed by the petitioner. Thus, it had escaped assessment. Such is not the facts of the cases referred to by the counsel for the petitioner and therefore those judgments are distinguishable on their facts. Counsel for the Department, in turn, relied upon the two decisions of the Bombay High Courts. In addition the Department also relied upon the decision of the Supreme Court in the case of "GKN DRIVESHAFTS (INDIA) LTD. VS. INCOME TAX OFFICER AND OTHERS" reported in (2003) 1 SCC 72 and in the case of "COMMISSIONER OF INCOME TAX AND OTHERS VS. CHHABIL DASS AGARWAL" reported in (2014) 1 SCC 603. Thus, prayed for dismissal of the petition at this stage. 12. Having heard the discussions made by either of the parties we proceed to delve with the issue of the limitation first, it is noteworthy to mention at this ....
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.... dated 03.08.2017 intimated the petitioner the reasons to belief and vide the said document it had been specifically intimated by the department that the Income Tax assessment for the assessment year 2010-11 was completed on 21.03.2013. It was submitted that a survey was conducted under Section 133A on 26.09.2016 and where it was found that there was some fresh unsecured loans of Rs. 11,20,07,504/- from different body corporate during the relevant year and so far as the reasons to believe is concerned, the relevant endorsement by the Assessing officer is reproduced herein as under:- "Keeping-in-view the above facts and materials available on record and also in order to lift the corporate veil, I have formed an honest belief that the income of Rs. 2,14,79,440/- on account of bogus credit should have been chargeable to tax under the head "Income from Other Sources" for the relevant A.Y. 2010-11 in the hands of the assessee namely, Maruti Clean Coal & Power Ltd. But has, in fact, escaped assessment. Thus, the assessee has failed to disclose entirely all material facts necessary for assessment. In order to rope into the escaped income and to assess such income, recourse to the provis....
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....ng of assessment under Section 147 is a potent power not to be lightly exercised. It certainly cannot be invoked casually or mechanically. The heart of the provision is the formation of belief by the AO that income has escaped assessment. The reasons so recorded have to be based on some tangible material and that should be evident from reading the reasons." 20. A similar view has again been taken by the Delhi High Court in the case of "Sabh Infrastructure Ltd. vs. Assistant Commissioner Income Tax" WPC No. 1357/2016, decided on 25.09.2017, 398 ITR 198 Delhi H.C. 21. When we refer to Section 151(1) the proviso therein, specifically deals with the Chief Commissioner or the Commissioner to be satisfied on the reasons recorded by the Assessing officer for issuance of a notice after the expiry of 4 years from the end of the relevant assessment year. It is this what is missing in the instant case. There can be no dispute as regards the requirement of Act to be strictly complied with. In the absence of the non-compliance of the statutory requirement as is required for issuance of a notice under Section 148, particularly when it is being issued beyond the period of 4 years, then the not....