TaxTMI 
TaxTMI 
2022 (8) TMI 1340
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....ndia while dismissing the writ petition which was filed challenging the rejection of the objection of the appellants questioning the initiation of reassessment proceedings on the premise that the very assumption of jurisdiction is baseless and illegal. The learned Judge has dismissed both the Writ Petitions. The contentions raised by the appellant questioning the initiation of reassessment is dealt with independently for the two assessment years, viz., 2011-12 and 2013-14. Assessment Year 2011-12 - W.A.No.1081 of 2021: 2. The appellant is a Private Limited Company engaged in the business of providing Paint Finishing Systems and related services to automobile manufacturers. For the Assessment Year 2011-12, the appellant filed Income Tax return on 30.11.2011 returning a total income of Rs.68.44 Crores. The 1st Respondent proceeded with the assessment of the appellant under Section 143 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). During the course of the assessment proceedings, the appellant submitted the Audited Profit and Loss Account and the Balance Sheet, together with the Notes thereon as required by the 1st Respondent. The assessment under Section 143(....
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.... in the reasons for reopening furnished to the appellant vide communication dated 12.11.2018 there is no finding or allegation of ''failure on the part of the assessee/appellant to disclose fully and truly all material facts''. It was submitted that in the absence of a finding on the above aspect, the exercise of power of reassessment beyond four years would be barred by limitation, since it is the existence of the above jurisdictional fact that would enable invoking the extended period of six years for reassessment in terms of the proviso to Section 147 of the Act. b) It was submitted that the order under Section 143 of the Act was passed after scrutiny of the documents submitted and adjustments made thereafter. There is no new material in support of the proposal to make a reassessment. In other words, the reassessment is merely a change of opinion on the basis of the material already furnished and examined by the assessing authority which is impermissible and beyond the jurisdiction relating to reassessment under Section 147 read with Section 148 of the Act. 5. The objections of the appellant was disposed of by the Respondent vide communication/order dated 26.1....
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....to the initation of reassessment proceedings on the ground of the same being barred by limitation, both in terms of issuance of notice and furnishing of reasons and also in any view the reasons for reassessment being mere change of opinion which does not warrant exercise of powers of reassessment, the appellant filed a writ petition challenging the same reiterating the above aspects. 7. The learned Single Judge however proceeded to dispose of the writ petitions holding that there were no justifiable reasons to interfere at this stage of the reassessment proceedings and directed the respondents to complete the reassessment after examining the documents produced by the appellant and pass orders on merits. 8. Though it appears that submissions were made before the learned Judge even on the merits apart from the question of jurisdiction, we would steer clear of examining the merits of the claim and confine ourselves to the question whether the assumption of jurisdiction is legal/ valid or otherwise. 9. The appellant is before this Court challenging the order of the learned Single Judge on the following premise: a. That the learned Judge failed to appreciate that the notice is cont....
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....refer to Sections 147 and 148 of the Income Tax Act, 1961, as it stood during the relevant period. "147. Income escaping assessment.- If the Assessing Officer, has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Sections 148 to 153, 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 this 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 ....
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.... to believe that any income chargeable to tax has escaped assessment, subject to the provisions of Sections 148 to 153 of the Act. The proviso to Section 147 of the Act, enables the Assessing Officer to make reassessment even after the expiry of four years from the end of the relevant assessment year, but, within six years from the relevant assessment year, if the income chargeable to tax has escaped assessment under the following circumstances, viz., a. Failure of the assessee to make a return under Section 139 of the Act. b. Does not make a return in response to a notice issued under Sub- Section (1) to Section 142 or Section 148 of the Act. c. Failure of the assessee to disclose fully and truly all material facts necessary for assessment. 11.3. In the present case, admittedly the extended period of six years is being invoked not under (a) or (b) set out above but only in view of (c) i.e., failure to disclose fully and truly all material facts necessary for assessment. It is submitted by the learned counsel for the appellant that while furnishing the reasons for reassessment vide its communication dated 05.11.2018, there is no finding that there was failure on the part....
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....r: ''74. A "jurisdictional fact" is a fact which must exist before a court, tribunal or an authority assumes jurisdiction over a particular matter. A jurisdictional fact is one on existence or non-existence of which depends jurisdiction of a court, a tribunal or an authority. It is the fact upon which an administrative agency's power to act depends. If the jurisdictional fact does not exist, the court, authority or officer cannot act. If a court or authority wrongly assumes the existence of such fact, the order can be questioned by a writ of certiorari. The underlying principle is that by erroneously assuming existence of such jurisdictional fact, no authority can confer upon itself jurisdiction which it otherwise does not possess.'' 75. In Halsbury's Laws of England, it has been stated: "Where the jurisdiction of a tribunal is dependent on the existence of a particular state of affairs, that state of affairs may be described as preliminary to, or collateral to the merits of, the issue. If, at the inception of an inquiry by an inferior tribunal, a challenge is made to its jurisdiction, the tribunal has to make up its mind whether to act or not and c....
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....the case of ITW Signode India Ltd v. CCE reported in (2004) 3 SCC 48, wherein, after extracting the judgment of the Supreme Court in the case of Easland Combines, the Court proceeded to conclude as under: "68. Even in Easland Combines [(2003) 3 SCC 410 : (2003) 152 ELT 39] this Court held: (SCC pp. 424-25, para 31) "31. It is settled law that for invoking the extended period of limitation duty should not have been paid, short-levied or short-paid or erroneously refunded because of either fraud, collusion, wilful misstatement, suppression of facts or contravention of any provision or rules. This Court has held that these ingredients postulate a positive act and, therefore, mere failure to pay duty and/or take out a licence which is not due to any fraud, collusion or wilful misstatement or suppression of fact or contravention of any provision is not sufficient to attract the extended period of limitation." 69. The question of limitation involves a question of jurisdiction. The finding of fact on the question of jurisdiction would be a jurisdictional fact. Such a jurisdictional question is to be determined having regard to both fact and law involved therein. The Tribunal, in ....
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....ssioner of Income Tax vs. Eigi Ultra industries Ltd. (296 ITR 573): "...the reopening of the assessment under s. 148 beyond the period of four years at the end of the relevant assessment year can be sustained only if it is established that there is a failure on the part of the assessee to disclose fully and truly all material facts. in this case there is no finding that there is failure on the part of the assessee to disclose fully and truly all material facts". (Emphasis supplied) c) Commissioner of Income-Tax v. Premier Mills Ltd., 2007 SCC OnLine Mad 1058 : (2008) 296 ITR 157 at page 160: "6. In case where the assessment is completed under section 143(3) of the Income-tax Act, the reopening of the assessment under section 148 beyond the period of four years at the end of the relevant assessment year can be sustained only if it is established that there is a failure on the part of the assessee to disclose fully and truly all material facts. In this case there is no finding that there is failure on the part of the assessee to disclose fully and truly all material facts. Further, all the material facts are available at the time of making original assessment. The Tribunal....
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....ed that on two out of three points mentioned in the reasons, the Assessing Officer merely states "that the issue needs to be looked into". That, on those two issues regarding subsidy and provident fund being disallowed, the Assessing Officer does not even say that there is escapement of income from assessment. He therefore submits that the proviso to section 147 is not attracted. That, on the said two points, there is nothing to indicate escapement of income. That, on the said two points, there is nothing to indicate failure on the part of the assessee to disclose fully and truly all material facts. That, on these two points, there is nothing to show as to on what basis the Assessing Officer has formed his belief regarding escapement of income from assessment. It is submitted that on the face of the given reasons, there is a total nonapplication of mind on the part of the Assessing Officer. (emphasis supplied) 13. We have not examined the question of the reassessment proceeding being bad for having been made on mere change of opinion in view of the fact that we have even otherwise found that the initiation of reassessment proceedings is in excess of jurisdiction. Assessment y....
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....s already submitted during assessment proceedings. That there are no new materials on record to initiate reassessment proceedings and thus, the reassessment proceedings is nothing but is one made on the basis of mere change of opinion which is impermissible. It was further submitted that the appellant had maintained and produced its books of accounts as per Schedule VI of the Companies Act and had explained the method of recognition of revenue for the billing done in excess in terms of Financial Statements. That the accounting was in compliance and in consonance with the Accounting Standard AS-7 which governs construction contract. It was further submitted that the reasons for reopening would reveal that the reasons have been sourced from the Financial Statements submitted during the course of assessment proceedings and the financial statement along with the notice and Schedule had been submitted to the Assessing Officer vide communication dated 06.01.2016, it was thus submitted that the reopening being on the basis of change of opinion, the same is bad for want of jurisdiction and contrary to the law laid down by the Hon'ble Supreme Court and this Court. 18. The objections w....