TMI Blog2010 (5) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to escaped liability. Brief facts of the case 3.The assessee respondent, filed original return dated 12.3.1996, declaring total income of Rs.3,04,200.00. During the course of assessment proceedings of the year 1996-97, it came to light that the assessee acquired gift for total amount of Rs.12,51,000.00, in the name of his minor son from one Shri Abdul Hasan Hanif of Lucknow through his NRE Account. 4.The case was reopened under Section 148 by issuing notice on 26.12.2000. The assessment completed under Section 147 (3) read with Section 148 of the Act for total income of Rs.16,10,400.00 whereas, in addition, Rs.12,51,000.00 was made with regard to unexplained gift on the ground that the donor was not available on the given address nor was produced before the Assessing Officer in spite of opportunity provided. 5.The addition of income was confirmed by the Commissioner Income Tax (A) with observation that Sri Hanif was not related to assessee though, confirmatory letter was filed and gift was made by cheque, it may not be held that the assessee has discharged his onus. More so, when the donor was not found at the given address nor was produced before the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed along with the photocopy of NRE Account and Passport, the adverse inference could not have been drawn by the Assessing Authority. 8.It was vehemently argued by the Revenue that the letter dated 7.5.2001, sent by the Assessee in response to notice under Section 148 of the Act, should be deemed to be filing of return reiterating earlier one. The submission of the appellant's counsel does not seem to be correct. For convenience, letter dated 7.5.2001 is reproduced as under: "May 7, 2001 The Dy. Commissioner of Income-Tax (O.S.D.) Salary Circle Lucknow. Sub: Notice Under Section 148 of the Income-Tax Act, 1961 for the Assessment Year: 1994-95. * * * * * * * * * * * Madam, I am in receipt of your Notice u/s 148 of the Income-Tax Act, 1961 dated 29.03.2001 for the Assessment Year: 1995-96. In this connection, have to informed you that, I have been filed the true correct return of Income for the aforesaid assessment year in salary ward 2 (2), Lucknow vide receipt No.7138 dated 29.03.96. The photocopy of acknowledgement of return is enclosed for reference. Therefore, I request you to may kindly withdraw the notice u/s 148 issued by you ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of law: "(a) Whether notice u/s 143 (2) of the Act issued after the assessee Proclaimed his original return "as true and correct" is not a valid Notice just because it was not issued with reference to a pending return. (c) Whether on the facts and in the circumstances of the case the learned I.T.A.T. was justified in holding that non-issuance of notice u/s 143/(2) of the Act has vitiated the assessment order and ignoring that issuance of such notice is a machinery provision and does not go to the root of the assessment, more so when the assessee was afforded and he availed full opportunity. (d) Whether notice u/s 143 (2) of the Act is a machinery provision and as per wording of section 148 (1) "so far as may be" provisions of section 143(2) with reference to reassessment proceedings u/s 148 need not be applied into but only to the extent possible. (e). Whether the assessee has discharged his onus by furnishing the name, confirmation letter, copy of NRE bank account and passport of the NRI donor even though the identity of donor could not be established what to talk about proving his creditworthiness and genuineness of the transaction." 14.On behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in response to notice under Section 148, shall be deemed to be furnished under Section 139 of the Act. Meaning thereby, procedure of Section 139 of the Act shall be followed while dealing with the case of escaped assessment under Section 148 of the Act. 20.The plain reading of Section 148 of the Act further reveals that within the statutory period specified therein, it shall be incumbent to send a notice under Section 143 (2) of the Act. 21.Sub-section (2) of Section 143 provides that after receipt of return furnished under Section 139 of the Act in response to a notice under Section 142 (1) of the Act, in case Assessing Officer has reason to believe that any claim of loss, exemption, deduction, allowance or relief made in the return is inadmissible, shall serve on the assessee a notice specifying particulars of such claim. It shall be appropriate to reproduce sub-section (2) of Section 143 of the Act: "143 (2). Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall-- (i)where he has reason to believe that any claim of loss, exemption, deduction, allowance or relief made in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the belief and the reasons for the belief, but not the sufficiency of the reasons, will be justifiable. The relevant portion from the case of Calcutta Discount Company (supra) is reproduced as under: "14. The expression "reason to believe" postulates belief and the existence of reasons for that belief. The belief must be held in good faith: it cannot be merely a pretence. The expression does not mean a purely subjective satisfaction of the Income Tax Officer: the forum of decision as to the existence of reasons and the belief is not in the mind of the Income Tax Officer. If it be asserted that the Income Tax Officer had reason to believe that income had been under-assessed by reason of failure to disclose fully and truly the facts material for assessment, the existence of the belief and the reasons for the belief, but not the sufficiency of the reasons, will be justiciable. The expression therefore predicates that the Income Tax Officer holds the belief induced by the existence of reasons for holding such belief. It contemplates existence of reasons on which the belief is founded, and not merely a belief in the existence of reasons inducing the belief; in other words, the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India Limited, Hon'ble Supreme Court held that change of opinion in view of the circular dated 30.10.1989, shall not be sufficient reason for reassessment. Reopening of assessment may be done provided the Assessing Officer has reason to believe that the income has escaped assessment based on tangible material. 27.In view of the above, in absence of any notice issued under sub-section (2) of Section 143 after receipt of fresh return, submitted by the assessee in response to notice under Section 148, the entire procedure adopted for escaped assessment, shall not be valid. 28.By catena of judgments, Hon'ble Supreme Court and this Court settled that a thing should be done in the manner provided by the Act and statutes and not otherwise. When the Statute provides for a particular procedure, the authority has to follow the same and cannot be permitted to act in contravention of the same. It has been hither to uncontroverted legal position that where a statute requires to do a certain thing in a certain way, the thing must be done in that way or not at all. Other methods or mode of performance are impliedly and necessarily forbidden.(Vide Taylor Vs. Taylor, (1876) 1 Ch.D.426; N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to believe", notice under Section 143 (2) of the Act should have been issued afresh. 31.It has been vehemently argued by the appellant's counsel that the assessee himself has sent a letter dated 7.5.2001 informing with regard to filing of original return in the year 1996 and dropping of proceeding. It should be deemed to be a return filed in response to notice under Section 148. Submission of appellant's counsel seems to be not correct in view of subsequent letter dated 18.12.2001 (supra), sent by the Assessing Officer informing the pendency of proceeding and in consequence thereof, filing of return by the assessee on 7.2.2002. 32.Since return was filed on 7.2.2002, in response to notice under Section 148 of the Act, earlier notice dated 29.03.2001 may not be treated as valid for the purpose of escaped assessment. The Legislature to their wisdom had categorically provided that after receipt of notice under Section 148 of the Act a fresh return may be filed and in consequence thereof, the Assessing Officer has to apply his mind to the contents of fresh return and then issue a notice under Section 143 (2) of the Act. The satisfaction under reason to believe, must be recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued and there is no equity in taxing provision. 41.In 1972 V 1972 Vol. 86 ITR SC, Commissioner of Income Tax Vs. Sakar Lal Balabhai, Hon'ble Supreme Court held that in interpreting the taxing provision, one has merely to look to the words of provision. It is not permissible to construe any provision of a statute, much less a taxing provision, by reading into it more word than it contains. If a section of a statute is considered as ambiguous it would not be in appropriate to find out the reason which persuaded the select committee to recommend the inclusion of that section. 42.In AIR 1997 SC 1165 Mohd. Ali KhanVs. CWT, Hon'ble Supreme Court held that taxing statute should be construed in their natural, popular and ordinary senses. 43.In 2007 (3) SCC 668: Mahim Patram (P) Ltd Vs. Union of India, Hon'ble Supreme Court held that taxing statute should be strictly interpreted. 44.In AIR 2000 SC 109: Mathuram Agarwal. Vs. State of U.P., Hon'ble Supreme Court held that taxing statute should be interpreted in the spirit of the statute. 45.In view of the above, the provision contained in Section 143 (2) of the Act is mandatory in nature and it shall be obligatory for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
