TaxTMI 
TaxTMI 
2018 (1) TMI 810
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....eturn was processed under Section 143(1) of the Act. On 23.3.17, AO issued a notice under Section 148 of the Act proposing to assess/re-assess the income of the appellant for the said A.Y. The appellant vide communication dated 6.4.17 requested the AO to treat the return filed on his behalf for the A.Y. 2010-11 as filed in compliance of notice issued under Section 148 of the Act. The appellant vide letter dated 27.3.17 requested the AO to supply the reasons recorded for issuing notice under Section 148 of the Act. The AO vide letter dated 10.4.17 supplied the reasons recorded for issuing notice under Section 148 of the Act to the appellant. On 5.7.17, the appellant submitted its objections questioning the legality of the notice and re-assessment proceeding initiated pursuant thereto. The appellant also demanded certified copies of the relevant documents on the basis of which the reasons for initiating re-assessment proceedings were recorded. The objections raised by the assessee questioning the validity of reassessment proceedings stood rejected by the AO vide order dated 7.7.17. Aggrieved thereby, the writ petition preferred by the appellant has been dismissed by the learned Singl....
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....the return and therefore, the reassessment proceedings initiated on mere change of opinion is ex facie without jurisdiction. 4. On the other hand, learned counsel appearing for the respondent submitted that during the survey of M/s Akash Amar Agrotech Pvt. Ltd. conducted on 5.12.13 certain documents were impounded, from the perusal whereof and post survey investigation, it was noticed that the assessee company has sold land in financial year 2009-10 to various entities. The assessee company while filing the return for the relevant year shown agriculture income of Rs. 15,24,600/- in lieu of sale of agriculture land claiming the same to be exempt income. It is submitted that from the material impounded during the survey, it was revealed that the main business activity of the appellant assessee as per its own record is purchase of land for the purpose of its development and subsequent sale, which also forms the source of its revenue. Learned counsel would submit that there exists rational nexus between reasons and the belief formed by the AO that income had escaped assessment and thus, the reassessment proceeding initiated cannot be faulted with. Learned counsel submitted that the ....
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....to income-tax have been under-assessed. The second is that he must have also reason to believe that such "under-assessment", has occurred by reason of either (i) omission or failure on the part of an assessee to make a return of his income under section 22, or (ii) omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for that year. Both these conditions are conditions precedent to be satisfied before the Incometax Officer could have jurisdiction to issue a notice for the assessment or reassessment beyond the period of four years, but within the period of eight years, from the end of the year in question." The Hon'ble Supreme court further observed that it is duty of every assessee to disclose fully and truly all material facts necessary for his assessment. But, his duty does not extend beyond this. The Hon'ble Supreme Court opined that once all primary facts are before the Assessing Authority, he requires no further assistance by way of disclosure . It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. 8. In Lakhmani Mewal Das....
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....f law." The Hon'ble Supreme Court further observed :- "As stated earlier, the reasons for the formation of the belief must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income -tax Officer and the formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts." (emphasis supplied) 9. In the matter of 'M/s. S.Ganga Saran & Sons (Pvt.) Ltd., Calcutta vs. Income Tax Officer & Ors.', (1981) 3 SCC, 143, the Hon'ble Supreme Court held as under:- "6. It is well settled as a result of several decisions of this Court that two distinct conditions must be satisfied before the Income Tax Officer can assume jurisdiction to issue notice under Section 147(a). First, he must have reason to believe that the income of the assessee has escaped assessment and secondly, he must have reason to believe that such escapement is by reason of the omission or failure on the....
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.... permissible was correction of errors apparent on the basis of the documents accompanying the return. The Assessing Officer had no authority to make adjustments or adjudicate upon any debatable issues. In other words, the Assessing Officer had no power to go behind the return, accounts or documents, either in allowing or in disallowing deductions, allowance or relief. 12. 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 1-4-1989 to 31-3-1998, the second proviso to section 143(1)(a), required that where adjustments were made under 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 1-4-1998, the second proviso to section 143(1)(a) was substituted by the Finance Act, 1997, which was operative t....
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.... also well brought out by the statutory provisions as they stood at different points of time. Under section 143(1)(a) as it stood prior to 1-4-1989, the Assessing Officer had to pass an assessment order if he decided to accept the return, but under the amended provision, the requirement of passing or 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 vs. Union of India. 16. It may be noted above that under the first proviso to the newly substituted section 143(1) with effect from 1-6- 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....
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....ubstituted with effect from 1-4-1989, as also sections 148 to 152 are substantially different from the provisions as they stood prior to such substitution. Under the old provisions 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 omission or failure on the part of the assessee to disclose fully or truly all materials 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 asses....