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TMI Blog2011 (12) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... oners filed revised returns enclosing therewith revised Form 16 issued by the employer, in which some part of grossing up towards non-monetary perquisites was deleted from the salary statement. Accordingly, the petitioners in the revised returns claimed refund of the tax, which had been deducted at source. 3. The Assessing Officer after receipt of the revised returns issued notice under Section 133(6) of the Act to the authorized signatory of the employer stating, inter alia, that their employees had claimed refund after filing revised returns for the assessment year 2008-09. The Assessing Officer called upon the employer to furnish the following information/details:- "1. Copy of agreement of employment with aforesaid employees. 2. Basis of tax computation including method of grossing up. 3. List of all employees on whose behalf tax was paid by employer with the respective assessment year. 4. Basis of issuing revised form 16 in the aforesaid cases." 4. The employer wrote a letter dated 25th October, 2010 and furnished some of the details, but copy of the agreement of employment, which was specifically asked for in the notice under Section 133(6) of the Act, was not furn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. 6. Before this Court the petitioners have impugned the notice under Section 148 of the Act dated 6th April, 2011 and the order of rejection of the objections dated 21st September, 2011. 7. Learned counsel for the petitioners has raised two objections to the issue of notice under Section 148 of the Act. Firstly, it is stated that the Assessing Officer had failed to intimate and send the order passed under Section 143(1) to the petitioners-assessees, therefore, proceedings under Section 147/148 of the Act are bad. The petitioners rely upon the decision of this Court in Commissioner of Income Tax Vs. Ved and Company (2008) 302 ITR 328 (Del.). Secondly, he submits that the reasons for reopening do not justify and are not "reasons to believe". It is submitted that a similar issue has already been decided by the tribunal against the Revenue vide decision in RBF Rig Corporation Vs. ACIT (2008) 297 ITR (AT) 228 (Delhi) SB. 8. Decision in the case of Ved and Company (supra) is dated 20th February, 2007. The aforesaid aspect was considered by the Supreme Court in the case of CIT Vs Rajesh Jhaveri Stock Brokers (P) Ltd. (2007) 291 ITR 500 (SC) decided on 23rd May, 2007. In the said case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y fact that no opportunity of being heard is given under section 143(1)(a) indicates that the Assessing Officer has to proceed accepting the return and making the permissible adjustments only. As a result of insertion of the Explanation to section 143 by the Finance (No. 2) Act of 1991 with effect from October 1, 1991, and subsequently with effect from June 1, 1994, by the Finance Act, 1994, and ultimately omitted with effect from June 1, 1999, by the Explanation as introduced by the Finance (No. 2) Act of 1991 an intimation sent to the assessee under section 143(1)(a) was deemed to be an order for the purposes of section 246 between June 1, 1994 and May 31, 1999, and under section 264 between October 1, 1991, and May 31, 1999. It is to be noted that the expressions "intimation" and "assessment order" have been used at different places. The contextual difference between the two expressions has to be understood in the context the expressions are used. Assessment is used as meaning sometimes "the computation of income", sometimes "the determination of the amount of tax payable" and sometimes "the whole procedure laid down in the Act for imposing liability upon the tax payer". In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the assessing officer should have finally ascertained the fact by legal evidence or conclusion. The function of the assessing officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. As observed by the Supreme Court in Central Provinces Manganese Ore Co. Ltd. v. ITO [1991] 191 ITR 62, for initiation of action under Section 147(a) (as the provision stood at the relevant time) fulfilment of the two requisite conditions in that regard is essential. At that stage, the final outcome of the proceeding is not relevant. In other words, at the initiation stage, what is required is "reason to believe", but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so because the form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t after filing of the original/revised returns has expired. Regular assessment proceedings under Section 143(3) cannot be initiated and the question considered. The only option available to Assessing Officer is to issue notice under Section 148 of the Act. The Assessing Officer could not have taken recourse to any other provision. 11. As per the case of the petitioners, original returns filed by them were processed under Section 143(1) of the Act, but the Assessing Officer had failed to communicate the said decision to the petitioners-assessees. Failure to communicate the said processing is something separate and cannot be equate with pendency of the assessment proceedings under Section 143(3) of the Act. Once the order under Section 143(1) of the Act was passed, and no notice under Section 143(2) has been issued, the Assessing Officer can issue notice under Section 147/148, if the pre-conditions are satisfied. 11. The contention of the petitioners is self-contradictory. It has stated that intimation under section 143 (1)(d) has not been communicated and no order under section 143 (3) has been passed and therefore proceedings are pending. At the same time, it is submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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