TMI Blog2011 (12) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... nly option available to Assessing Officer is to issue notice under Section 148 of the Act. - Decided against the assessee. - W.P.(C) 8567/2011, W.P.(C) 8568/2011, W.P.(C) 8570/2011, W.P.(C) 8571/2011 - - - Dated:- 8-12-2011 - MR. JUSTICE SANJIV KHANNA, MR. JUSTICE R.V.EASWAR, JJ. For Appellant: Mr. T. N. Chopra, Mr.Shivendra and Mr. Manish Kumar, Advs. For Respondent: Mr. Sanjeev Rajpal, Adv. O R D E R The present five writ petitions raise identical issues and the facts are similar. These petitions are being disposed of by this common order. 2. The petitioners herein were/are employees of M/s Tokio Marine and Nichido Fire Inc. Limited. As per the terms of employment between the petitioners and the employer, they were paid tax free salary in India. The petitioners had filed returns of income for the Assessment Year 2008-09 enclosing therewith Form 16 issued by the employer. In the said original returns of income, the petitioners had, as per Form 16, grossed up and included the tax component as the petitioners were drawing tax free salary in India, though the tax was being paid by the employer. Subsequently, the petitioners filed revised returns enclosing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However no basis has been provided as to why these perquisites have been considered monetary in original form-16 and considered non-monetary in revised form-16. No basis has also been provided for changing the nature of perquisites from monetary to non-monetary. In view of the above, I have reasons to believe that the income of the assessee chargeable to tax for A.Y. 2008-09 has escaped assessment within the meaning of section 147 of the Income Tax Act 1961. Similar reasons were recorded in other cases. 5. After notice under Section 148 of the Act was served upon the petitioners, a letter was written by the petitioners stating that the revised returns should be treated as returns filed pursuant to notice issued under Section 148 of the Act. Copy of the reasons for issue of notice under Section 148 was supplied to the petitioners on 5th July, 2011. The petitioners, thereafter, objected to the legality of the notice under Section 148 by filing objections vide letter dated 8th July, 2011. By order dated 21st September, 2011, the Assessing Officer has rejected the objections filed by the petitioners to the issue of notice under Section 148. 6. Before this Court the petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stments. With effect from April 1, 1998, the second proviso to section 143(1)(a) was substituted by the Finance Act, 1997, which was operative till June 1, 1999. The requirement was that an intimation was to be sent to the assessee whether or not any adjustment had been made under the first proviso to section 143(1) and notwithstanding that no tax or interest was found due from the assessee concerned. Between April 1, 1998, and May 31, 1999, sending of an intimation under section 143(1)(a) was mandatory. Thus, the legislative intent is very clear from the use of the word intimation as substituted for assessment that two different concepts emerged. While making an assessment, the Assessing Officer is free to make any addition after grant of opportunity to the assessee. By making adjustments under the first proviso to section 143(1)(a), no addition which is impermissible by the information given in the return could be made by the Assessing Officer. The reason is that under section 143(1)(a) no opportunity is granted to the assessee and the Assessing Officer proceeds on his opinion on the basis of the return filed by the assessee. The very fact that no opportunity of being heard i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to him. It is significant that the acknowledgment is not done by any Assessing Officer, but mostly by ministerial staff. Can it be said that any assessment is done by them ? The reply is an emphatic no . The intimation under section 143(1)(a) was deemed to be a notice of demand under section 156, for the apparent purpose of making machinery provisions relating to recovery of tax applicable. By such application only recovery indicated to be payable in the intimation became permissible. And nothing more can be inferred from the deeming provision. Therefore, there being no assessment under section 143(1)(a), the question of change of opinion, as contended, does not arise. (emphasis supplied) 9. Thereafter, the Supreme Court examined the amendments made to the Sections 147 and 148 of the Act and it was observed:- 16. Section 147 authorises and permits the assessing officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word reason in the phrase reason to believe would mean cause or justification. If the assessing officer has cause or justification to know or suppose that incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith Section 147(a) but under the substituted Section 147 existence of only the first condition suffices. In other words if the assessing officer for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. It is however to be noted that both the conditions must be fulfilled if the case falls within the ambit of the proviso to Section 147. The case at hand is covered by the main provision and not the proviso. 18. So long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings even when intimation under section 143(1) had been issued. 10. In view of the authoritative pronouncement of the Supreme Court in the case of Rajesh Jhaveri (supra), we are of the opinion that in the present case the Assessing Officer has jurisdiction to invoke Section 147/148 of the Act. It is not disputed and doubted by the petitioners that the period of service of notice under Section 143(2) of the Act after filing of the original/revised returns ..... X X X X Extracts X X X X X X X X Extracts X X X X
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