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2021 (8) TMI 237
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....ection, the assessee has challenged reopening of assessment. This ground of appeal of the assessee has been rejected by the learned First Appellate Authority. However, on merits, the additions have been deleted. Therefore, firstly, we take up the jurisdictional issue agitated in the Cross Objection. In Ground No.1 the assessee has pleaded that the learned CIT(A) has erred in upholding the validity of the reassessment proceedings initiated under Section 147/148 of the Income-tax Act. 4. The brief facts of the case are that the learned Assessing Officer has issued a notice under Section 148 of the Income-tax Act on 08.01.2016 after recording the reasons. The learned Counsel for the assessee, while impugning the reopening of the assessment, contended that the assessment can be reopened if the Assessing Officer is satisfied that the income has escaped assessment; however, a notice under Section 148 could be issued only after taking approval from the competent authority as contemplated under Section 151 of the Income-tax Act. He took us through the reasons recorded and the objections filed by the assessee against the reopening. He also took us through the order of the Assessing....
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....endrabhai Thakkar Income from salary / Pension 287095 760248 512889 308398 262320 On perusal of the gross income filed by him it has been found that he is showing income under the head "Salary" and he does not have any substantial source of income so as to deposit such huge cash in his bank account. In view of the discussion held above, the source of deposits in the hands of Shri Jasmine J. Thakkar remains unexplained. Moreover, he does not have any creditworthiness so as to deposit such huge funds in cash in his accounts. Considering the above returned income and keeping in mind the huge cash deposits in the bank account, to explain the same, I have reason to believe that income of Rs. 11.94 crores has escaped assessment for FY 2009-10, i.e. AY 2010-11. Accordingly, it is a fit case for reopening u/s 147 of the I.T. Act. Sd/- (KAVITA P. KAUSHIK) Dy. Commissioner of Income-tax Central Circle-1(3), Ahmedabad." 7. A copy of the notice issued under Section 148 of the Income-tax Act is available on page no.1 of the paper-book and, on perusal of this notice, it would reveal that it was issued on 08.01.2016. It is, therefore, as....
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....per satisfaction of the Pr. Chief Commissioner / Chief Commissioner / Pr. Commissioner / Commissioner that it is a fit case for the issue of such notice. Please note that the notice u/s 148 was issued after obtaining the approval from the concerned Jt. Commissioner. Copy of the same is enclosed herewith for your reference. 3. As the objections raised by you are herewith dispose off, you are requested to attend the office of the undersigned on or before 30.05.2016 with reply to the notice issued u/s 142(1) of the Act dated 12.05.2016. 4. Your explanation should reach the undersigned on or before 30.05.2016. Please note that if you fail to furnish any explanation by the given date, assessment in your case for the assessment year may be finalized u/s 144 of the Income Tax Act, without affording any further opportunity. Non-compliance to the notice will leads to penalty proceedings as per the provisions of Income-tax Act, 1961. Yours faithfully, Sd/- (KAVITA P. KAUSHIK) Dy. Commissioner of Income-tax Central Circle-1(3), Ahmedabad." 8. At this stage, we would like to take note of Section 151 of the Incometax Act which reads as under....
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....otice u/s 148 was issued after obtaining the approval from the concerned Jt. Commissioner. Copy of the same is enclosed herewith for your reference." 12. A perusal of the above would indicate that the Assessing Officer himself has rejected this objection of the assessee by observing that approval was taken from the Joint Commissioner of Income-tax. He has not recorded the finding that the approval was taken from the competent authority i.e. Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. Thus, there was no proper approval for reopening of the assessment and the reopening is, therefore, not valid in the eyes of law. For fortifying ourselves, we put reliance upon the judgement of the Hon'ble jurisdictional High Court in the case of Adani Ports & SEZ Ltd vs. DCIT, reported in [2013] 35 taxmann.com 338 wherein the Hon'ble High Court has allowed the writ petition of the assessee and quashed the reopening under identical circumstances. Similarly, we rely upon the judgment of the Hon'ble Delhi High Court in the case of CIT vs. SPL's Siddartha Ltd, reported in [2012] 17 taxmann.com 138. In view of the above discussion, we allow this ground o....
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.... be construed that the addition on an issue for which the assessment was reopened was not made. If that be the case, then any other income coming to the notice of the Assessing Officer during the reassessment proceedings cannot be added. In other words, the income which came to the notice of the Assessing Officer as escaped income during the reassessment proceedings can only be added if addition on an issue for which assessment was reopened is being made. For buttressing his proposition and explaining the position of law, he relied upon the judgment of the Hon'ble Gujarat High Court in the case of CIT vs. Mohmed Juned Dadani, reported in [2013] 30 taxmann.com 1. He also made reliance upon the judgment of the Hon'ble Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd., reported in [2011] 331 ITR 236 as well as the judgement of Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd Vs. CIT, reported in [2011] 336 ITR 136. He also placed on records the copies of Tribunal orders as well as decision of Hon'ble Delhi High Court in the case of CIT vs. Adhunik Niryat Ispat Ltd in appeal No.2090 of 2010. 15. The learned CIT-DR, on the other hand, took us through th....
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....h in his accounts. Considering the above returned income and keeping in mind the huge cash deposits in the bank account, which remained to be explained in spite of the opportunity given to the assessee to explain the same, I have reason to believe that income has escaped assessment within the meaning of Section 147 of the I.T. Act. Considering the above returned income and keeping in mind the huge cash deposits in the bank account, to explain the same. I have reason to believe that income of Rs. 1.63 crores has escaped assessment for F.Y. 2010-11 i.e. A.Y. 2011-12. Accordingly, it is a fit case for reopening u/s 147 of the Act. Sd/- (KAVITA P. KAUSHIK) Dy. Commissioner of Income-tax Central Circle-1(3), Ahmedabad." 17. A perusal of the above reasons would indicate that the Assessing Officer has reopened the assessment on the ground that the assessee had made deposits in cash aggregating to Rs. 1.63 crores. This cash deposit, in the opinion of the Assessing Officer, was escaped income from the assessment. We have perused the assessment order also, but we do not find any such addition made by the Assessing Officer. He took notice of the fact that a su....
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....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 section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: Provided further that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Explanation 1. Production before the Assessing Officer of account book....
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....ice under the said section record his reasons for doing so. 22. Section 147 of the Act thus, gives power to the Assessing Officer for reopening an assessment. Such powers, however, are hedged with several conditions. First the Assessing Officer must have reason to believe that any income chargeable to tax has escaped assessment. Further if the reopening is resorted beyond the period of four years from the end of the relevant assessment year, additional requirement that income chargeable to tax has escaped assessment by the reason of failure on the part of the assessee to make a return under Section 139 or in response to a notice under Section 142(1) or 148 of the Act or to disclose fully and truly all material facts necessary for the assessment must also be satisfied. If the requirements of giving jurisdiction to the Assessing Officer to reopen assessment are satisfied, he may 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 the said section. 23. Section 147 of the Act, even without the aid of Explanation 3 thus enabled the Asses....
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....ffort should be made to give such interpretation which ensures that a provision in a statute is not rendering otiose. Such question may have led to some interesting discussion. However, the entire issue has been put beyond any pale of controversy by virtue of the explanatory memorandum for introducing such explanation. Such explanatory memorandum reads as under: "Clarificatory amendment in respect of reassessment Proceeding under section 147 The existing provisions of section 147 provides, inter alia, that if the Assessing officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may assess or reassess such income after recording reasons for re-opening the assessment. Further, he may also assess or reassess such other income which has escaped assessment and which comes to his notice subsequently in the course of proceedings under this section. Some courts have held that the Assessing Officer has to restrict the reassessment proceedings only to issues in respect of which the reasons have been recorded for reopening the assessment. He is not emplowered to touch upon any other issue for which no reason....
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....82 the Supreme Court observed that, an explanation added to a statutory provision is not a substantive provision but as the plain meaning of the word itself shows it is merely meant to explain or clarify certain ambiguities which may have crept in the statutory provision. It was observed as under: "52. Thus, from a conspectus of the authorities referred to above, it is manifest that the object of an Explanation to a statutory provision is- (a) to explain the meaning and intendment of the Act itself, (b) where there is any obscruity or vagueness in the main enactment, to clarify the same so as to make it consistent with the dominant object which it seems to subserve. (c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful. (d) an Explanation cannot in any way interfere with or change the enactment or any part thereof but where some gap is left which is relevant for the purpose of the Explanation, in order to suppress the mischief and advance the object of the Act it can help or assist the Court in interpreting the true purport and intendment of the enactment, and (e) It....