TaxTMI 
TaxTMI 
2023 (9) TMI 625
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.... Year 2015-2016 on the ground that the income had escaped assessment. The impugned notice dated 31.03.2021 was purported to be issued under Section 147 of the Income Tax Act, 1961 (IT Act). 4. The Petitioner after receipt of the impugned notice dated 31.03.2021 had applied to the Respondents for furnish of reasons for reopening. Such reasons were furnished to the Petitioner under the cover of a letter dated 11.08.2021. By communication dated 26.08.2021, the Petitioner filed objections to the Deputy Commissioner of Income Tax. 5. Even before the Petitioner's objections could be considered and disposed of, the Petitioner was served with a notice dated 25.02.2022 under Section 142(1) of the IT Act seeking to proceed with the reassessment and calling upon the Petitioner to furnish additional information. 6. The Petitioner therefore instituted Writ Petition No. 110 of 2022 inter alia questioning reassessment proceedings, even before the Petitioner's objections to the reasons furnished were not considered and disposed of. The Petitioner alleged that the procedure adopted by the Respondents conflicted with the procedure prescribed in GKN Driveshafts (India) Ltd. Vs ITO 2003(1) ....
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....sioner of Income Tax, Central Circle -5(1) & Another- 2016 SCC OnLine Bom 9840 and Akshar Builders and Developers Vs Asstt. Commissioner of Income Tax - 28(1) Mumbai-2019 SCC OnLine Bom 2393 in support of his contentions. 12. Mr Rao submitted that the reasons for reopening an assessment have to be tested/examined only based on the reasoning recorded at the time of issuing a notice under Section 147/148 of the IT Act seeking to reopen an assessment. These reasons cannot be improved upon and/or supplemented in the order disposing of the objections or by way of an affidavit filed before the Court. Mr Rao submitted that in the present case, there was no allegation of failure on the Petitioner's part to fully and truly disclose all material facts and that such failure gave the officer reasons to believe that the income had indeed escaped assessment for the Assessment Year 2015-2016. Mr Rao relied on Aroni Commercials Limited vs. Deputy Commissioner of Income Tax-2(1)-2014 SCC OnLine Bom 221 and Lintas India Private Limited vs. Union of India and Another- Writ Petition No. 3501 of 2019 decided on 19.01.2022 in support of his contentions. 13. Mr Rao submitted that full disclosures w....
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.... rejected. Therefore, Ms Linhares submitted that there was no prejudice to the Petitioner for want of such a specific allegation in the impugned notice or in the reasons furnished to the Petitioner. 18. Based on the above contentions, Ms. Linhares urged the discharge of the rule in this petition. 19. The rival contentions now fall for determination. 20. The impugned notice dated 31.03.2021 issued under Section 147/148 of the IT Act reads as follows: "To, TEOFILO FERNANDO ANTONIO PINTO H.No. 341, DAYANAND BANDODKAR MARG, NEXT TO MILITARY HOSPITAL, CAMPAL, PANJIM 403 001, Goa India. PAN AMDPP7270N A.Y. 2015-16 Dated 31/03/2021 DIN & Notice No. ITBA/AST/S/148/2020-21/1032053559(1) Notice Under Section 148 of the Income Tax Act, 1961 Sir/Madam/M/s. Whereas I have reasons to believe that your income chargeable to Tax for the Assessment Year 2015-16 has escaped Assessment within the meaning of section 147 of the Income Tax Act, 1961. I, therefore, propose to assess/re-assess the income/loss for the said Assessment Year and I hereby require you to deliver to me within 30 days from the service of this notice, a return in the prescribed form for the said....
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....rs/mistakes on the part of the Assessing Officer while passing the original order of assessment. There is a sanctity bestowed on an order of assessment, and the same can be disturbed by the exercise of powers under Sections 147/148 of the IT Act only on satisfaction of the jurisdictional requirements. 24. The Division Bench explained the reasons for reopening an assessment have to be tested/examined only based on the reasons recorded at the time of issuing a notice under Section 147/148 of the IT Act seeking to reopen an assessment. These reasons cannot be improved upon and/or supplemented much less substituted by affidavit and /or oral submissions. Moreover, the reasons for reopening an assessment should be that of the Assessing Officer alone who is issuing the notice, and such an Officer cannot merely act on the dictates of any other person or official while issuing the notice. [See Hindustan Lever Vs Wadkar in 268 ITR 332]. 25. As noted above, at least the impugned notice dated 31.03.2021 does not even contain any allegation that the Petitioner failed to disclose fully and truly all material facts necessary for his assessment for the Assessment Year 2015-2016. The Petitioner, ....
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....on was computed and claimed for declaring LTCG In view of the above facts, the Assessing Officer is of the belief that income chargeable to tax amounting to Rs. 83,50,000/- has escaped the assessment, within the meaning of the provision of section 147 of the I. T Act, 1961. Accordingly, a proposal for the sanction/approval to issue notice u/s 148 of the I.T. Act, 1961 from the Hon'ble Pr. Commissioner of Income Tax, Panaji is hereby solicited as per the provisions of Sec. 151 of the l.T. Act, 1961." 27. Again, even in the reasons furnished there is no allegation that the Petitioner failed to disclose fully and truly all material facts necessary for his assessment for the Assessment Year 2015-2016. As noted earlier, such failure is a jurisdictional parameter which must be fulfilled if a notice seeking reopening of assessment made after the expiry of four years from the end of the relevant Assessment Year is to be sustained. 28. In Hubtown Limited (supra), a coordinate Division Bench quashed the notice under Section 148 of the IT Act issued four years after the end of the relevant assessment year on the ground that the proviso to Section 147 of the IT Act i.e. failure to disc....
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....open an assessment beyond the period of four years from the end of the relevant assessment year. The Court further reiterated that the impugned notice can stand or fall based on the reasons recorded at the time of issuing such notice. These reasons cannot be improved upon, substituted or supplemented either by affidavits or while disposing of the objections of the Petitioner as was held in Hindustan Lever Ltd Vs Wadkar (supra). 31. All the above-referred decisions of the coordinate Bench of this Court support the Petitioner's case in the present matter. Neither the impugned notice nor the reasons in support of the impugned notice contain even an allegation about the Petitioner's failure to disclose fully and truly all material relevant facts necessary for his assessment for the Assessment Year 2015-2016. Neither the notice nor the reasons disclose what was suppressed by the Petitioner and how such suppression offers the Assessing Officer reason to believe that the income had escaped assessment. The justification belatedly offered in the impugned order dated 14.04.2023, by which the Petitioner's objections were disposed of cannot be regarded as a valid defence of the im....