TaxTMI 
TaxTMI 
2019 (12) TMI 1426
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....rutiny, the Assessing Officer (in short, AO) assessed the total income of the petitioner at Rs. 10,71,67,261 as against the returned income of Rs. 5,19,81,710. It is for this reason that notice under section 148 of the Act was served upon the petitioner. There-after, the petitioner sought reasons from the respondents in respect of the "reasons to believe that some income of the assessee has escaped assessment". The Department later on provided the petitioner with the reasons. 3. Thereafter, the petitioner raised objection against the decision of reassessment. The objection so raised by the petitioner was rejected by the Assessing Officer vide communication dated November 13, 2019 giving intimation of the further proceeding with the matter. 4. The petitioner primarily challenges the order on the ground that notice under section 148 of the Act initiating reassessment is barred by limitation and therefore, proceedings drawn is per se illegal. The proviso to section 147 of the Act clearly provides that no action of reassessment can be initiated after the expiry of four years from the end of the relevant assessment year. There was nothing which has been suppressed by the petitione....
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....also relied upon CIT v. Banwari Lal Banshidhar [1998] 229 ITR 229 (All) of the Allahabad High Court and CIT v. G. K. Contractor [2009] 19 DTR 305 (Raj) to substantiate their contention that once when the Assessing Officer has estimated on the basis of the higher profit rate subsequent reliance on the books of account again and to hold that there were yet certain income which has escaped assessment is not sustainable. 9. According to the petitioner, the action of reassessment by the respondents is also in contravention to the principles of law laid down by the Supreme Court in the case of CIT v. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC) and for all the aforesaid reasons, the counsel for the petitioner prays for quashment of the notice under section 148 of the Act holding it to be barred by limitation. 10. Per contra, the counsel for the Department opposing the petition sub-mitted that a plain perusal of the reasons to believe provided by the Department to the petitioner it would clearly reveal that there was sufficient tangible material found in the course of scrutiny which has led to the initiation of the proceeding under section 147 of the Act. According to the Depart....
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....nvisage the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to separately give reasons while approving the reasons recorded by the Assessing Officer. He has only to be satisfied with the reasons recorded by the Assessing Officer and which has been forwarded to him for necessary sanction and approval. 15. Given the said facts, now if we come to the findings of the Assessing Officer or the reasons recorded by the Assessing Officer, it would clearly reveal that as per the Assessing Officer, an amount of more than Rs. 2.53 crores has escaped assessment and that this amount of more than Rs. 2.53 crores were payments made in cash towards expenditure exceeding more than Rs. 20,000 in a day, which otherwise is impermissible under the Income-tax Act. The said reasons were thereafter placed before the Principal Commissioner, who in turn has given sanction for the same. 16. From the plain reading of the aforesaid provision of law, what is clearly reflected is that there has to be subjective satisfaction of the officer concerned to the reasons assigned by the Assessing Officer. Section 151(1) does not provide for any specific conditions, which....
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....the Division Bench judgment of the Punjab and Haryana High Court in the case of Jawand Sons v. CIT (Appeals) [2010] 326 ITR 39 (P&H) ; [2010] 195 Taxman 144 (P&H). The Division Bench of the Delhi High Court in the case of Consolidated Photo and Finvest Ltd. v. Asst. CIT [2006] 281 ITR 394 (Delhi), has also held that action under section 147 of the Act was permissible even if the Assessing Officer gathered his reasons to believe from the same record as had been the subject matter of the completed assessment proceedings. Mere production of books of account is not sufficient to infer that there had been full disclosure of material facts necessary for the purpose of assessment. Once, if in the opinion of the Assessing Officer, there are reasons to believe of certain income escaping assessment, it would be sufficient for initiating proceedings under section 147 of the Act. 20. In the case of Phool Chand Bajrang Lal v. ITO [1993] 203 ITR 456 (SC) ; 1993 4 SCC 77, the Supreme Court in paragraph 6, 26 and 27 held as under (pages 464 and 478 of 203 ITR) : "From the plain phraseology of the above sections of the Act, it appears that two conditions precedent which are required to ....
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....8 of the Act. The High Court was, thus, perfectly justified in dismissing the writ petition. There is no merit in this appeal which fails and is dismissed but with no order as to costs." 21. Again in the case of ITO v. Selected Dalurband Coal Co. Pvt. Ltd. [1996] 217 ITR 597 (SC) ; [1997] 10 SCC 68, in paragraph 3 held as under (page 599 of 217 ITR) : "It is well settled by various decisions of this court that the notice under section 148 read with section 147 can be issued only where the Income-tax Officer has reason to believe that the income, profits or gains chargeable to tax had been under assessed or escaped assessment and further that such escapement or underassessment was occasioned by reason of the failure of the assessee to disclose fully and truly all material facts necessary for the assessment of that year. (We are not concerned with clause (b) of section 147 here but only with clause (a)). In other words, there must be relevant material before the Assessing Officer upon which he must reasonably and rationally form the requisite opinion (belief). The question, therefore, is whether the letter of the Chief Mining Officer aforesaid does not constitute relevant....
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....re 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 material 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 assessment it confers jurisdiction to reopen the assessment. It is, howev....