TaxTMI 
TaxTMI 
2018 (10) TMI 1906
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....Tax was paid by the petitioner. 3. The petitioner has pleaded that a notice dt. 29th March, 2018, was issued under Section 148 of the Act, 1961for the assessment year 2011-12 and it was proposed to assess/reassess the income for the assessment year 2011-12 as respondent carried a belief that income for said assessment years has escaped assessment. It is pleaded that in compliance of the impugned notice, the petitioner submitted before the authorities, that returns were filed earlier on 30th September, 2011, and the tax was paid. 4. The petitioner has pleaded that without providing the reasons for reassessment proceedings, the respondents issued notices under Section 143 (2) of the Income Tax Act, 1961 and also issued notice under Section 142 (1) of the Income Tax Act, 1961 dt. 10th August, 2018, whereby certain queries were raised. The petitioner has pleaded that a request was made after receipt of notice dt. 29th March, 2018, to provide the reasons recorded for initiation of reassessment proceedings. The petitioner has pleaded that request was again made by letter dt. 21st August, 2018, to provide copy of reasons for reassessment, as mandated by law. 5. The petitioner has....
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....that the information which is gathered by the Assessing Officer in respect of assessment made in the hands of different assessee, cannot itself lead to a situation where the Assessing Officer has to make up his mind for his reasons to believe that income has escaped assessment. 12. Counsel further submitted that the impugned order passed by the respondents has not taken into account the various guidelines laid down by the Apex Court as well as by different High Courts. 13. This Court asked the learned counsel to satisfy about the maintainability of the writ petition under Article 226 of the Constitution of India to set aside the orders passed by the Income Tax Authority, deciding the objections in response to notice under Section 148 of the Income Tax Act, 1961. 14. Counsel for the petitioner has placed reliance on the following judgments of the Apex Court as well as different High Courts on maintainability of the writ petition:- 1. Jeans Knit P. Ltd. Vs. DCIT [2017] 77 Taxmann.com 176(SC) 2. Smt. Kiran Kanwar Vs. UOI [2017] 814 Taxmann.com 281 (Rajasthan)]. 3. Cheer Sagar Vs. CIT [2012] SCC Online Raj. 1707(Rajasthan). 4. Sabh Infrastru....
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....essment 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 nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year:] [Provided [also] 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 books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2.-For the purposes of this section, the following shall also be deemed to b....
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....essment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139:] [Provided that in a case- (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under subsection (2) of section 143 after the expiry of twelve months specified in the proviso to sub-section (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or re-computation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice: Provided further that in a case- (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and....
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.... the Act, the entire procedures can become null and void. The intention of the statute is that the authorities on the receipt of new material facts or any suppression of materials by the assessee, is bound to initiate proceeding in invoking under Section 147 & 148 of the Act of 1961. 22. The phraseology of "reasons to believe" has to be interpreted that the Assessing Officer on receipt of any such new material or materials in relation to suppression of fact by the assessee, has made out a prima-facie opinion that it is a case for reopening of the assessment and then issue notice under Section 148 and thereafter, the procedure of furnishing the reasons, receiving objections and conducting scrutiny and all other procedures contemplated under the provisions of the Income Tax Act, 1961 will follow. 23. This Court finds that when notices are issued based on certain material available with the Department and on receipt of the notice, assessee has got right to seek for the reasons from the Department and the Department is bound to provide reasons, enabling the assessee to submit his explanation/objections in order to defend his case. 24. This Court finds that there is a provision....
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....Court is of an opinion that issuance of the notice under Section 148 of the Act is nothing but initiation of the proceedings for reopening of the assessment already finalised. Undoubtedly, such reopenings are to be done cautiously and the reasons for reopening is also mandatory. In the absence of any substantial reason, the Assessing Officer cannot reopen the assessment which was closed long back. 55. The very object of the provision under the Income Tax Act is to ensure that the suppressed materials or facts and the new availability of materials to the Department are also to be dealt with for the purpose of taxation. In order to cover the loopholes in the Tax Regime, and to control and evasion of tax by the individuals, the provision of reopening of assessments are made and such provisions are to be certainly invoked by following the procedures contemplated under the Act. 57. Mere issuance of notice cannot be construed as a final order. Initiation of the proceedings are to be construed as informations to the Assessee and can never be concluded as a final proceedings. Thus, the issuance of notice is an information provided to the Assessee, enabling him to avail of....
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....writ petition, when there is a remedy available to the aggrieved person under the Statute. The High Court cannot usurp the power of the Appellate Authorities in respect of the adjudication of the merits and the demerits of the matter. The High Court cannot appreciate the mixed question of law and facts, at the initial stage, when a notice under Section 148 of the Income Tax Act, 1961 was issued to the Assessee for reopening the assessment. Such complex facts and circumstances are to be adjudicated by producing documents and by adducing evidences by the parties concerned. Such an exercise can never be done by the High Courts under Article 226 of the Constitution of India. Thus, entertaining a writ petition at the notice stage, must be sparingly and cautiously done. The High Courts must be restrained from entertaining such writ petitions when the very notice itself is under challenge. 73. Undoubtedly, the legal principles settled in this regard that the writ petition can be entertained if the notice has been issued by an incompetent authority having no jurisdiction or if the allegation of mala fides are raised or if the same is in violation of any Statutory Rules in force. E....
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....ed before the initiation of the reopening of the assessment alone need not be a ground for reassessment. Even after reopening of the assessment if any materials or informations are received by the Assessing Officer that also shall be included part and parcel of the proceedings and sufficient explanations shall be called for from the Assessee and accordingly a reassessment order can be passed. Thus, two circumstances arise after the conclusion of the assessment. Firstly, if the assessment is finalised, the reopening in respect of the escaped assessments can be made if any new materials or suppression of materials are identified. On such reopening of the assessment and during the course of the proceedings, if the Assessing Officer noticed any other materials or informations in respect of escaped assessment and the same also can be treated as part and parcel of the reassessment proceedings which is reopened. 82. On going through the said ingredients of the Section 147, this Court has no hesitation to conclude that the Assessing Officer has got wider power in respect of covering the escaped assessments for the purpose of reopening the assessment. The proviso to Section 147 sta....
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....very actions of the Authorities Competent must be on reasonings and the same must be recorded in files. The reasons to be recorded by the Assessing Officer for taking decision to reopen the escaped assessment does not mean that such reasons are to be communicated along with the notice itself. The notice directs the Assessee to submit his returns. If the Assessee is of an opinion that he requires the reasons recorded by the Assessing Officer for reopening of the assessment, then he can made a request and accordingly the same shall be furnished by the Assessing Officer to the Assessee. 93. In case of M/S. Phool Chand Bajrang Lal vs. Income-Tax Officer And Another [MANU/SC/0361/1993: 1993 203 ITR 456], it has been held as follows:- "One of the purposes of Section 147, appears to us to be, to ensure that a party cannot get away by wilfully making a false or untrue statement at the time of original assessment and when that falsity comes to notice, to turn around and say "you accepted my lie, now your hands are tied and you can do nothing". It would be travesty of justice to allow the assessee that latitude." 96. This being the principles to be followed, the wr....