TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 948
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.... of additional evidence application. 2. Reassessment proceedings without jurisdiction. 3. Addition on basis of wrong balance sheet. 4. Denial of Telescoping. 5. Taxation of Directors remuneration. 6. Capital gain on sale of agricultural land treated as business income. 7. Addition based on loose papers. 8. Addition under section 68. 9. Addition on account of non-compete receipt. 10. Addition on account of capital account. 3. The assessee has challenged the legality of notice u/s 148 of the Act on the ground that it is bad in law. 4. Representatives were heard at length. Case records carefully perused. 5. Briefly stated the facts of the case are that th....
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....of income. 8. On identical facts, the Hon'ble High Court of Madras in the case of Commissioner of Income Tax Vs K.M. Pachayappan (2008) 304 ITR 264, quashed the reassessment proceedings. In the facts before the Hon'ble High Court, the Assessee filed a return of income under section 139(4) of the Act on March 15, 2000 and the time limit for issuance of notice under section 143(2) of the Act was expiring on March 31, 2000. The assessing officer instead of issuing a notice under section 143(2) of the Act directly issued a notice under section 148 of the Act dated March 15, 2000. The Hon'ble Madras High Court held that when a return of income has been filed and the same is pending, the proceedings are still pending. In such a situati....
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.... any tax or interest is found due on the basis of such return, after adjustment of any tax deducted at source, any advance tax paid, any tax paid on self-assessment and any amount paid otherwise by way of tax or interest, then, without prejudice to the provisions of sub-section (2), an intimation shall be sent to the assessee specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issued under section 156 and all the provisions of this Act shall apply accordingly; and (ii) .................. Provided that except as otherwise provided in this sub-section, the acknowledgment of the return shall be deemed to be an intimation under this sub-section where either no sum is payable by the asses....
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....rejudice to the right of the Revenue to proceed under Section 143(2) of the Act. Thus, issue of intimation by itself does not bring to an end an assessment proceeding. It comes to an end only when the time to issue a notice under Section 143(2) of the Act expires/come to an end. 10. On the other hand, Section 147/148 of the Act empowers an Assessing Officer to reopen an assessment wherever he has reason to believe that income chargeable to tax has escaped assessment. This power under Section 147/148 of the Act is subject to various limitation provided therein. The power of reopening of assessment can be exercised where assessment has not been completed under Section 143(3) of the Act or even where intimation under Section 143(1)(i)....
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.... (a) ............. (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return;" The aforesaid explanation deals with case where income chargeable to tax escapes assessment including a case where a return of income has been filed, but no assessment has been made. The aforesaid explanation seeks to clarify that merely because no assessment has been made even after filing a return, it will not be open to suggest that no income chargeable to tax has escaped assessment. This covers issue where there is no possibility of makin....
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....nnot initiate reassessment proceedings, where intimation under Section 143(1) has been issued and the Revenue failed to take steps to issue notice under Section 143(2) and complete assessment under Section 143(3) of the Act. The aforesaid contention was negatived in the above referred para on the ground that in the context of the facts before it, the time to issue notice under Section 143(3) of the Act had expired. It is only thereafter that the Assessing Officer could have reason to believe that the income chargeable to tax has escaped assessment. It is in such cases that the Assessing Officer would not be prohibited under Section 147/148 of the Act from seeking to recover tax on income which has escaped assessment. It is clear that no rea....