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2022 (9) TMI 1379 - HC - Income TaxReopening of assessment u/s 147 - as no assessment orders are passed under sub clause (4) to section 144C - Assessee case was referred to the TPO u/s 92CA and the TPO inturn, passed an order under section 92CA (3) - whether the Assessing Officer can issue notice under section 148 of the Act when the Assessing Officer has not passed an assessment order under section 144C(4)? - HELD THAT:- The basic requirement for invocation of section 147 is that the assessing officer has the reason to believe that income chargeable to tax, had escaped assessment; and after recording the reasons for reopening the assessment, the assessing officer has to issue notice under section 148 to the assessee. In the present case, the return of income filed by the assessee, was subjected to scrutiny. As there were international transactions involved, the case was referred to TPO, for determining the Arm's Length Price, who in turn filed his report, and based on the report of the TPO, the respondent passed the draft assessment order. Thereafter, the assessing officer, after having found that certain income had escaped assessment, reopened the assessment. Admittedly, the notice under section 148 was issued to the appellant within the period of limitation and the same was also not put to challenge by the appellant / assessee. But, what was challenged in the writ proceedings by the appellant is the rejection of their objections to the said notice by the respondent. While so, it cannot be said that the reassessment proceedings initiated by the assessing officer under section 147 of the Act, without completing the original assessment, is not proper. Further, there is no embargo under section 147 of the Act, to issue notice under section 148, where assessment order has not been passed, after starting scrutiny proceedings; and section 144C(4) only states that the assessing officer has to pass an assessment order in accordance with the provisions of the Act and it nowhere states that section 148 notice can be issued only after passing an assessment order. Therefore, the learned Judge has rightly concluded that the assessing officer is empowered to invoke section 147 of the Act, if he has reason to believe that the income chargeable to tax escaped assessment, in the cases, where no assessment orders are passed under sub clause (4) to section 144C. As rightly contended by the learned senior standing counsel appearing for the respondent, as per Explanation 2 of section 147, the Assessing Officer is free to reexamine correctness of a regular assessment and decide whether the tax assessed, rate applied, relief and allowances granted, etc., are in terms of the provisions of the Act and if not to revise the assessment in terms of section 147 of the Act. In the light of the same, the assessing officer, who has reason to believe that certain income chargeable to tax, has escaped assessment, reopened the assessment by issuing notice under section 148 of the Act to the appellant. As such, it cannot be stated that the Assessing Officer initiated the reassessment proceedings by issuing notice under section 148 to the assessee for rectifying the lapses of not passing the final assessment order under section 144C(4) of the Act. This court is of the opinion that the order in justifying the reassessment proceedings initiated by the assessing officer under section 147 of the Act, after following the mandatory requirements of the Act, is perfectly correct and the same does not call for any interference by this court. - Decided against assessee.
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