TMI Blog2013 (7) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... uisite belief as regards escapement of income is without jurisdiction and as such the notice u/s 148 as well as any proceedings taken pursuant thereto cannot be sustained be sustained – notice set aside – petition allowed infavour of assessee. - SPECIAL CIVIL APPLICATION No. 12910 of 2010 - - - Dated:- 25-1-2011 - MS. HARSHA DEVANI AND MR. H.B.ANTANI For the Petitioner: MR SN SOPARKAR, SR. ADVOCATE with MRS SWATI SOPARKAR For the Respondent: MRS MAUNA M BHATT 1. This petition under Article 226 of the Constitution of India challenges the notice dated 25.9.2009 issued by the respondent under section 148 of the Income Tax Act, 1961 (the Act) seeking to reopen the assessment of the petitioner in relation to assessment year 2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stage, that the petitioner has approached this Court challenging the impugned notice. 3. Mr. S. N. Soparkar, learned Senior Advocate, appearing on behalf of the petitioner invited attention to the notice issued under section 142(1) of the Act (Annexure A to the petition), to point out that the respondent had called upon the petitioner to furnish particulars/details in respect of the expenditure of Rs.4.53 crores incurred on account of Key-man insurance premium. Referring to the letter dated 12.2.2007 of the Chartered Accountants of the petitioner to the respondent, it was pointed out that the details of the amount paid for Key-man insurance premium along with insurance policy had been duly submitted in response to the notice under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order for the year 2006-07 in relation to the issue in question had already been set aside by the Commissioner (Appeals), there was no order in the eyes of law which could form the basis for reopening the assessment. It was accordingly submitted that the very initiation of proceedings under section 147 of the Act being without any basis, lacks jurisdiction and is required to be set aside. 4. On the other hand, Mrs. Mauna Bhatt learned Senior Standing Counsel, appearing on behalf of the respondent supported the action of the respondent. Inviting attention to the assessment order, it was submitted that in the entire assessment order for assessment year 2005-06, there is no reference to the claim of Key-man insurance premium and as such, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer are as follows: Reasons for reopening the assessment: In this case the assessee has filed the return of income for the A.Y. 2005-06 on 28/10/2005. The assessment proceedings were finalized vide order u/s. 143(3) r.w.s. 263 dated 17/11/2008 determining income at Rs.1,85,37,250/-. In the assessment order, the assessee's claim for keyman insurance premium of Rs.4.50 crores was allowed in full. However, during the assessment proceedings for A.Y. 2006-07, it was established that, out of the claim of Rs.4.50 crores, only Rs.34,80,000/- was allowable. This amount was worked out on the basis of calculation of premium amount as per IRDA guidelines. Hence, it is seen that assessee has furnished inaccurate particulars with regard to clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e eyes of law as the same stood merged in the order passed by the Commissioner (Appeals). In the circumstances, once the Commissioner (Appeals) had taken a view that the petitioner was entitled to the claim for Key-man Insurance Premium, it was thereafter no longer permissible to the Assessing Officer to place reliance upon the original assessment order which had no existence in the eyes of law for the purpose of reopening the assessment in relation to the assessment year under consideration. It is settled legal position that since the belief as regards escapement of income is that of the Assessing Officer, the sufficiency of reasons for forming the belief, is not for the Court to judge but it is open to an assessee to establish that there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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