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TMI Blog2010 (4) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... income, the return already filed by the petitioner to be treated as having been filed pursuant to the aforesaid notice only. Therefore, the petitioner submitted before the assessing authority that it has complied with the notice and relied on the decision of the Supreme Court in GKN Driveshafts (India) Ltd. Vs. Income Tax Officer (259 ITR 19), which mandates that the petitioner is entitled to be furnished a copy of the reasons recorded by the Assessing Authority before the issue of notice under Section 148. Subsequently, in view of the letter of the petitioner seeking a copy of the reasons recorded, the respondent also issued a letter dated 25.05.2009 informing the reasons for reopening of the assessment, stating that in the course of assessment proceedings of the assessment year 1996-97, it was noticed by the Assessing Officer that the assessee had received an amount of Rs.5,60,00,000/- from Ashok Leyland Finance Ltd. This amount was received based on a Memorandum of Understanding / Agreement for joint development dated 27.11.1994 between the assessee and Ashok Leyland Finance Limited and as per which the assessee had offered to surrender its share of development rights on the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not for the year 1996-97. The proceedings are totally barred by limitation. Further, it was argued that though the Tribunal has got power to direct an income excluded from one year to be assessed for another year, neither explanation 2 to Sub Section (4) of Section 153 nor any other provisions of the Income Tax Act extends the limitation or waives the procedure for making such assessment for the simple reason that the proviso provides that no proceedings for reopening of an assessment in a year for which an assessment is originally completed under Section 143(3) shall be taken beyond four years from the end of the Assessment year. On that basis, it was prayed for quashing of the impugned order. 4. Per contra, learned counsel appearing for the respondent submits that the respondent, by letter dated 25.05.2009, had duly communicated the reasons for reopening the assessment under Section 147 for the assessment year 1995-96, to the petitioner. By doing so, the respondent has duly complied with the procedure laid down by the Supreme Court in GKN Driveshafts' case (supra). When the notice under Section 143(2) was issued on 25.05.2009 posting the case for hearing on 08.06.2009 by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the provisions of section 151. (3) If the person on whom a notice under Section 148 is to be served is a person treated as the agent of a non-resident under Section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of two years from the end of the relevant assessment year. The opening sentence of Section 149 leaves no room for any doubt. No notice under Section 148 shall be issued if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (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. The explanation no.2 further states that the provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of Section 151, which is extracted hereunder:- 151. (1) In a case where an assessment under sub-section (3) of Section 143 or Section 147 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he return for the assessment year 1995-96 on 29.02.1996 admitting nil income and an order of assessment had already been passed under Section 143(3) of the Income Tax Act on 31.03.1998 accepting the petitioner's return, in the above said circumstances, the present impugned notices were issued, for which the petitioner submitted his explanation stating that he had already submitted return of income for the assessment year 1995-96 on 29.02.1996. In so far as there was no escapement of income or a change in the income declared by the petitioner earlier, the return already filed by the petitioner was sought to be treated as having been filed pursuant to the aforesaid notice. Further, the petitioner submitted before the Assessing Authority that in so far as it had complied with the notice pursuant to the decision of the Supreme Court reported in GKN Drivesshafts (India) Ltd.'s case (supra), the petitioner is entitled to be furnished a copy of the reasons recorded by the Assessing Authority before the issue of notice under Section 148, because as per the judgment of the Supreme Court, the Assessing Officer is under a mandate to dispose of such preliminary objection by passing speaking or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 1995-96 has escaped assessment. 10. The above said two notices has not complied with the command of Section 151, which clearly rules that no notice shall be issued under Section 148, by an Assessing Officer, unless, the Joint Commissioner is satisfied on the reasons recorded by such assessing officer that it is a fit case for the issue of such notice. When there is no such communication by the Assessing Officer, certifying that it is a fit case for the issue of such notice, the Joint Commissioner without satisfying the reasons recorded by the Assessing Officer, should not have issued the impugned notice, which is totally contrary to Section 151 of the Income Tax Act. Further, the proviso under Section 151 also makes position very clear that after the expiry of 4 years from the end of relevant assessment year, no such notice shall be issued unless the Chief Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. Again, when there is no such reasons recorded by the Assessing Officer, certifying that it is a fit case for the issue of notice after the expiry of 4 years from the en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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