TMI Blog2011 (1) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... n one lakh rupees, whereas, in a case where the amount of tax escaping assessment is not more than or not likely to be more than one lakh rupees, even if the requirements of the proviso to section 147 of the Act are satisfied, no notice can be issued beyond a period of four years - The time-limit of six years provided by the said section is the maximum time-limit for issuance of notice under section 148 of the Act, beyond which even if the requirements of the proviso to section 147 of the Act are fulfilled, no notice under section 148 can be issued. Held that: the notice for reassessment has been issued after the expiry for a period of four years from the end of the relevant assessment year and as noted earlier, there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the assessment year under consideration - In the circumstances, the assumption of jurisdiction under section 147 of the Act by issuance of notice under section 148 of the Act is invalid and as such, cannot be sustained – Hence, the petition succeeds and is accordingly allowed - 15148 OF 2010 - - - Dated:- 11-1-2011 - MS. HARSHA DEVANI, H.B. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer framed assessment under section 143(3) of the Act by an order dated 29-3-2006. Subsequently, by the impugned notice dated 24-3-2010, the assessment for the year 2003-04 was sought to be reopened. In response to the notice the petitioner by a letter dated 16-4-2010 requested the respondent to treat its previous return as the return filed in response to the reassessment notice and asked for a copy of the reasons recorded. Upon receipt of a copy of reasons, the petitioner filed its objections thereto by a letter dated 18-10-2010. By an order dated 12-11-2010, the objection raised by the petitioner against reopening of the assessment came to be rejected. It is in the background of the aforesaid facts, that the petitioner has filed the present petition challenging the notice dated 24-3-2010 issued under section 48 of the Act. 4. In response to the notice, the respondent has filed an affidavit-in-reply dated 24-12-2010 denying the averments made in the petition. 5. Mr. M.J. Shah, learned advocate appearing on behalf of the petitioner has submitted that the assessment year under consideration is 2003-04, whereas the notice under section 148 of the Act has been issued on 24-3-2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15JB of the Act. According to the learned counsel, wrong calculation amounts to failure to disclose fully and truly all material facts. It is accordingly submitted that the Assessing Officer was justified in reopening the assessment beyond a period of four years from the end of the relevant assessment year. Inviting attention to the provisions of section 149(1)(b) of the Act, it is submitted that in case where the income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees one lakh or more, it is permissible for the Assessing Officer to reopen the assessment after a period of four years but not more than six years. In the facts of the present case, the reopening is within a period of six years and as such, the same is legal and valid. 7. In rejoinder, Mr. M.J. Shah, learned advocate for the petitioner has invited attention to the decision of this High Court in case of Gujarat Carbon Industrial Ltd. v. Jt. CIT [2008] 307 ITR 2711. In the said case the successor Assessing Officer issued notice after recording reasons under section 148 of the Act for reopening the assessment on the ground that the value of excess stock of carbon black found du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the failure on the part of the assessee, (i) to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148; or (ii) to disclose fully and truly all material facts necessary for his assessment, for that assessment year. Insofar as escapement of income from assessment is concerned all that has been recorded in the reasons is that the assessee is found to have wrongly calculated the book profit under section 115JB of the Act. The Assessing Officer has also reproduced a table on the basis of which he has computed the book profit at a different figure than that computed by the Assessing Officer in the original assessment order. The said table is more or less bodily lifted from the table submitted by the petitioner along with its communication dated 24-3-2006 (Exhibit-H collectively). Thus, the reasons for reopening are based upon material furnished by the assessee, viz., the statement as given by the assessee during the course of assessment proceedings. A perusal of original assessment order under section 143(3) of the Act clearly shows that the Assessing Officer, at the relevant time has applied his mind to the issue in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of sub-section (1) of section 149 which read thus : "149. Time-limit for notice. (1) No notice under section 148 shall be issued for the relevant assessment year, (a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year. Explanation. In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section." 11. The heading of the section clearly indicates that the same prescribes the limitation for issuance of notice. On a plain reading of the aforesaid provision, it is apparent that the same provides for the time-limit within which a notice under section 148 of the Act can be issued and lays down that in case falling under clause (b) viz., where the income chargeable to tax which has escaped assessment amounts to or is likely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be issued. In the circumstances the contention that the amount escaping assessment being more than one lakh rupees, reopening of assessment beyond a period of four years but within six years is valid even without satisfying the requirements of the proviso to section 147 of the Act being contrary to the provisions of the Act, is required to be stated to be rejected. 12. In the facts of the present case, the notice for reassessment has been issued after the expiry for a period of four years from the end of the relevant assessment year and as noted earlier, there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the assessment year under consideration. In the circumstances, the assumption of jurisdiction under section 147 of the Act by issuance of notice under section 148 of the Act is invalid and as such, cannot be sustained. 13. For the foregoing reasons the petition succeeds and is accordingly allowed. The impugned notice dated 24-3-2010 issued under section 148 of the Act (Exhibit-L) to the petition is hereby quashed and set aside. Rule is made absolute accordingly with no order as to costs. - - TaxTMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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