TaxTMI 
TaxTMI 
2023 (1) TMI 46
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....itioner to show cause as to why case should not be reopened under Section 147 read with Section 148 of the Act. 2. A perusal of the show cause notice would go to reveal that the case was sought to be reopened on the following grounds:- "a). That as per the learned Assessing Officer the firm ha sold mutual funds amounting to (which E Rs.8,13,63,000/- had not been declared in the income tax return a 13 income for the impugned assessment year. b) That the learned Assessing officer was of the view the assessee firm had interest in assets amounting Rs.18,07,73,000/- which had also not been offered for taxation. c) Last but not the least, the learned Assessing Officer being the respondent No.2 was of the view that assessee's firm had made foreign remittance which had not been declared in the return of income. The value of the foreign remittance amounting to Rs.78,29,747/- and in totality according to the learned Assessing Officer a sum of Rs.26,99,62,000/- had escaped assessment." 3. The petitioner filed reply to the show cause notice dated 26.03.2022, wherein it had categorically been mentioned that neither the petitioner had sold any mutual funds, held interest in assets....
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....pon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions o....
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....s under:- Whereas have information which suggests that income chargeable to tax for the Assessment Year 2018-19 has escaped assessment within the meaning of section 147 of the Income-tax Act, 1961. The details of the information and enquiry, if conducted, are enclosed with this notice in Annexure-A. 2. You are required to show cause as to why, in view of the details contained in Annexure A, a notice section 148 of the Income Tax Act, 1961 should not be issued. 3. You may, to the extent technologically feasible, submit your response with supporting documents (if any) on the above mentioned issues electronically in 'e-proceeding facility through your account in e-filing portal at your convenience on or before 26/03/2022. 4. This notice is being issued after obtaining the prior approval of the PCIT, Chandigarh-1 accorded on date 19/03/2022 vide Reference No. 100000028876635. Annexure As per information received under RMS (Risk Management System for the F.Y. 2017-18 relevant to A.Y. 2018-19, under 'High Risk CRIU/VRU information, the assessee M/s Swastik Wire Products, PAN- ABGFS3429J is engaged in the business of manufacturing. The Assessee has shown total tax....
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....3 lac In respect to the same we submit that the assessee firm does not have any interest in assets of a firm or association as a partner or member amouting to Rs. 1807.73 Lacs. However, your goodself stated in the notice that the assessee has interest held in assets of a firm or association of persons as a partner or member by the assessee has been shown at Rs. 1807/73 lacs. So. keeping in view of providing an opportunity of being heard and principal of natural justice, it is requested to your goodsell to kindly provide detalls of such interest held by the assessee firm as claimed by your goodself of Rs.1807.73 lacs Uke any document to provide the name of the firm or association in which the assessee is partner or member, date of acquisition of such interest, bank account which shows the transaction for purchase of such interest etc. so that assessee's response can be filed with your goodself with respect to Information provided. 3. Also it is mentioned in the notice that the assessee has made a foreign remittances of Rs. 78.28 in respect to the same, we want to submit that the assessee firm has not undertaken any foreign remittance of Rs. 78:29 as mentioned in the notice du....
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....tioner would have been in a better position to file its reply to the show cause. But that apart, it needs to be noticed that only reason given by the respondents for issuing the show cause notice by passing an order under Clause (d) of Section 148A is contained in para 3 thereof, which reads as under:- "3. The submission filed by the assessee are neither relevant as per the show cause notice nor tenable due to the lack of any supporting evidence. Since the assessee has not fully or truly disclosed the sources of income amounting to Rs. 26,99,62,000/- during the previous year 2017-18 relevant to AY. 2018-19 therefore, I have reasons to believe that the income to the extent of Rs. 26,99,62,000/- has escaped assessment for the Asstt.year 2018-19. Therefore, in this case I have reasons to believe that the income to the extent of Rs 26,99,62,000/- has escaped assessment for the A.Y 2018-19." 15. The Assessing Officer has virtually not considered the reply of the petitioner received in response to the show cause notice under Section 148A(b). That apart, the Assessing Officer has not passed a speaking order under Section 148A(d) and has not dealt with each and every objection in the r....
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.... BY THE FINANCE ACT, 2021 WITH THE INTENT OF REDUCING LITIGATION AND TO PROMOTE EASE OF DOING BUSINESS 7. This Court is of the view that the new re-assessment scheme (vide amended sections 147 to 151 of the Act) was introduced by the Finance Act, 2021 with the intent of reducing litigation and to promote ease of doing business. In fact, the legislature brought in safeguards in the amended re-assessment scheme in accordance with the judgment of the Supreme Court in GKN Driveshafts (India) Ltd. v. ITO (2002) 125 Taxman 963120031 259 ITR 19 before any exercise of jurisdiction to initiate re-assessment proceedings under section 148 of the Act. 8. This Court is further of the view that under the amended provisions, the term "information" in Explanation 1 to section 148 cannot be lightly resorted to so as to re-open assessment. This information cannot be a ground to give unbridled powers to the Revenue. Whether it is "information to suggest under amended law or "reason to believe under erstwhile law the benchmark of "escapement of income chargeable to tax" still remains the primary condition to be satisfied before invoking powers under section 147 of the Act. Merely because the Rev....
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....nformation which requires action in consequence of the order of a Tribunal or a Court ii. Further, explanation 2 to section 148 provides the incidence where assessing officer shall be deemed to have information. Explanation 2- where AO shall be deemed to have information suggesting escapement of income- (i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A, other than under subsection (2A) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisit....
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....48A (d) Time limit (Calculated from the end of the relevant AY) PCIT or PDIT or CIT or DIT (ref. Seetion 151(i)) Upto 3 years PCCIT or PDGIT or where there is no PCCIT or PDGIT then approval from CCIT or DGIT (ref Section 151(ii)) More than 3 years but upto 10 years v. Explanation 2 to section 148 of the Act provides that if a survey u/s 133A of the Act (other than under section 133A (2A)) was conducted in the case of the assessee on or after 1st April, 2021, the Assessing officer shall be deemed to have information which suggests that income chargeable to tax has escaped assessment. However, it is to clarify that the due procedure as prescribed u/s 148A needs to be followed in such cases also before issuing a notice u/s 148 of the (refer proviso to section 148A). vi. The AO shall, if required, undertake enquiries on any "information" received/available with him which suggests that the income chargeable to tax has escaped assessment in a previous year only with the prior approval of "specified authority". vii. If the result of enquiry/information available suggests that the income chargeable to tax has escaped assessment, the AO shall provide an opportunity of be....
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....nt instructions/ guidelines/ SOPs have been duly adhered with. xv. The confidential information such as from FIU, foreign jurisdictions, LEAs etc would be governed by respective guidelines governing sharing of such xvi. Information relevant to the case of the assessees' income escaping assessment must be provided and Information not relevant to the case of the assessee must be redacted. 2.2 Notices along with annexures shall be sent to assessee as follows- Category of case Order/sanction document to be sent along with notice u/s 148 Cases covered under para 2.1 (iii) above ● Notice u/s. 148 (Annexure B) and ● prior approval of specified authority u/s. 151 of the Income Tax Act (Annexure A2). Other cases ● Notice u/s. 148 - (Annexure B), ● the Order u/s. 148A (d) - (Annexure A3) and ● approval of the specified authority for such order u/s 148A (d)- (Annexure A2) (Proforma of above notices/orders are illustrative and suggestive in nature and may be modified suitably based on the facts and circumstances of the case, if required.) 3. For the purposes of assessment or reassessment or recomputation under section 147 read with secti....