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2013 (9) TMI 571 - HC - Income TaxReassessment u/s 147 - Notice u/s 148 after the expiry of four years - failure to respond to a notice u/s 142(1) - According to the petitioner, this alleged reason to believe is based upon the order of Assessment for the Assessment Year 2008-09 where the TPO had made adjustment of about Rs.9.9 Crores on account of the arms length price with regard to the International Transactions with Associated Enterprises. - Held that:- the policy of law is that there must be a finality to all legal proceedings including assessments and therefore, completed assessment can only be reopened if all the conditions prescribed by the Act for reopening of assessment are satisfied. The Supreme Court in the matter of CIT v/s. Kelvinator of India [2010 (1) TMI 11 - SUPREME COURT OF INDIA] has held that there is a conceptual difference between the power to review and the power to reassess. The Act gives no power to the Assessing Officer to review an assessment but only a power to reassess. However, this power can only be exercised subject to certain pre conditions as provided in the Act being satisfied. The argument that failure to respond to a notice under Section 142(1) of the Act calling upon the assessee to produce a document will lead to satisfaction of the proviso to Section 147 of the Act, to enable the Assessing Officer to take action to reassess after the expiry of four years from the end of the relevant assessment year is not acceptable. No Form 3 CEB as required under Section 92E of the Act had been filed by the petitioner with the Assessing Officer in respect of the Assessment Year 2006-07 prior to issue of penalty notice under Section 271AB of the Act - Moreover, it was clear that Section 92E of the Act mandates making disclosure by filing of Form 3 CEB - Therefore, there was a failure to disclose all material facts on the part of the petitioner for the Assessment Year 2006-07. Relying upon Siemens Information Systems Ltd. v/s. CIT [2012 (2) TMI 281 - Bombay High Court] - Assessment Order passed in a subsequent Assessment Year could well form the basis for obtaining tangible material to reach the belief that income chargeable to tax had escaped assessment - keeping in mind the fact that the petitioner had failed to disclose material facts necessary to be disclosed in terms of Section 92E of the Act, it must follow that there was reasonable belief that income chargeable to tax had escaped assessment in view of the fact that in a subsequent Assessment Year, the TPO had made adjustment to arm’s length price - Therefore, we find that there was reason to believe that income liable to tax had escaped assessment for the Assessment Year 2006-07. Observations of the Assessing Officer speaks volume about the conduct of the petitioner and its desire to avoid furnishing Form 3 CEB as required under Section 92E of the Act before the Assessing Officer for the Assessment Year 2006-07 - there was no reason to entertain the present petition challenging the notice dated 3 May 2012 under Section 148 of the Act and the order dated 25 July 2012 dismissing the petitioner's objections while seeking to reassess the petitioner for the AY 2006-07 – Decided against Assessee.
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