TMI Blog2014 (1) TMI 1088X X X X Extracts X X X X X X X X Extracts X X X X ..... ng material to form the belief in good faith that there was failure on the part of the assessee to disclose fully and truly the material facts necessary for his assessment - The assessee has reason to believe that there is escapement of income - The necessary conditions for invoking the provisions of Sections 147 and 148, stand satisfied in the facts and circumstances of the case - The AO had valid reasons for issuing notice and the AO was directed to complete the assessment within six months time - Decided against assessee. - Writ Tax No. - 1366 of 2009, Writ Tax No. - 1367 of 2009, Writ Tax No. - 1368 of 2009 - - - Dated:- 17-1-2014 - Hon'ble Sunil Ambwani And Hon'ble Surya Prakash Kesarwani,JJ. For the Petitioner : Mudit Agarwal, Ashish Agrawal,J. N. Mathur For the Respondent : C. S. C. (Income Tax),Ashok Kumar,B. Agarwal,M. D. Singh ORDER (Delivered by Hon'ble Surya Prakash Kesarwani,J.) 1. These three writ petitions have been preferred challenging the notices under Section 148 of the Income Tax Act 1961 (hereinafter referred to as the Act) for reassessment under Section 147 of the Act on common grounds with the only difference with regard to the quantum in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 for AY 2006-07 was issued to the petitioner under Section 148 of the Act. Likewise notice dated 19.3.2009 for AY 2002-2003, notice dated 19.3.2009 for AY 2004-05 and notice dated 26.3.2009 for AY 2005-06 were issued to the petitioner under Section 148 of the Act. All these notices have been challenged in these writ petitions on the ground that in the absence of the existence of ingredients of Section 147 of the Act, these notices are wholly without jurisdiction. For AY 2003-04, an additional ground has been taken that since the notice has been issued after four years from the end relevant assessment year for which assessment under Section 143 (3) of the Act has been completed in the absence of any material that income chargeable to tax as escaped assessment by reason of failure on the part of the assessee to make a return under Section 139 or in response to a notice issued under Sub Section (1) of Section 142 or Section 148 or to disclose fully and truly all material facts, the impugned notice is wholly without jurisdiction. 4. It is not disputed that for all the assessment years in question similar notices under Section 148 along with reasons recorded, were issued to the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om Commissioner of Income Tax,Bareilly who has given approval vide his letter F.No. CIT BLY/APPR. U/S 148/RKECT. BLY.2008-09 dated 24.03.2009 which is placed on file." 5. We have heard Sri Shubham Agarwal, learned counsel for the petitioner and Sri Ashok Kumar, Senior Standing Counsel appears for the respondents. Submission on behalf of the petitioner 6. Sri Shubham Agarwal submits; (i) The proceedings for the AY 2003-04 is barred by limitation in view of the first Proviso to Section 147 of the Act inasmuch as the impugned notice under Section 148 of the Act has been issued after expiry of four years from the end of the AY 2003-04. (ii) The assessment for AY 2003-04 was completed under Section 143 (3) of the Act vide assessment order dated 7.3.2006. The proceeding under Section 148 of the Act, therefore, cannot be initiated in the absence of any of the ingredients of the first Proviso to Section 147 of the Act namely, the escapement of assessment of income chargeable to tax by reason of the failure on the part of the assessee to make a return under Section 139 or in response to a notice issued under Sub section (1) of Section 142 or to disclose fully and truly all materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 27.2.2009 in which he disclosed that the trust is debiting various expenditure especially salary of teachers, doctors which are not genuine and are inflated, and that the capitation fees received from students is being shown as donation to the Trust. The donation and expenditure as disclosed are not genuine. (iv) The objections filed by the petitioner against the impugned notices were decided by the A.O. by a detail orders dated 3.6.2009 (Annexure No. CA-2) also establishes that the proceedings under Section 148 by the impugned notices have been validly initiated. (v)For each of the assessment years in question the reassessment proceedings under Section 148 of the Act have been completed and the assessment orders have been passed but the same have not been served on the petitioner in view of the interim order passed by this Court in these writ petitions. (vi)The impugned notices are wholly valid and they do not suffer from any infirmity. 9. In support of his submissions Sri Ashok Kumar has relied on the following judgments: (i) Raymond Woollen Mills Ltd. v. Income -Tax Officers and Others (1999) 236 ITR 34 SC. (ii) United Bank of India v. Satyawati Tandon and others ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning the approval of MCI and DCI. In this regard it has come to the notice to the Department that the assessee had made claims of payment of salary to the teachers which have not worked for full year of Rs. 1,17,98,237/- and other expenses of Rs. 12,73,370/-. These expenses are required to be examined for determination of genuineness of payment of salary and expenses by the Trust during the period under consideration. This fact has also come to notice with the report of Midical Council of India vide its No. MCI-34(41)/2007-Med. / 2399 date 16/4/2008 addressed to the secretary to the Govt. of India, Minsitry of Health and F.M., Nirman Bhawan, New Delhi. (iii)In view of report of MCI, it is clear that the assessee has claimed salary and expenses which are bogus. The assessee has thus violated the provision u/s 12AA and 80G of the IT Act, 1961. In these circumstances the Assessing Officer rightly initiated action u/s 147. (iv)The Chairman of the trust Dr. Keshav Kumar Agarwal had filed an affidavit in the Hon'ble Supreme Court of India in writ petition (Civil) No. 294 of 2008 in the case of M/s Rohilkhand Educational Charitable Trust V/s Union of India, in which as Chairman of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of either omission or failure on the part of the assessee to make a return of his income or to disclose fully and truly all material facts necessary for his assessment. Certain other conditions were also necessary, but we are not concerned with them.. Dealing with that section in the case of S. Narayanappa v. Commissioner of Income Tax(1) this Court observed : " But the legal position is that if there, are in fact some reasonable grounds for the Income-tax officer to believe that there had been any non-disclosure as regards any fact, which could have a material bearing on the question of under-assessment, that would be sufficient to give jurisdiction to the Income-tax Officer to issue the notice under section 34. Whether these grounds are adequate or not is not a matter for the court to investigate. In other words, the sufficiency of the grounds which induced the Income-tax Officer to act is not a justiciable issue. It is of course open for the assessee to contend that the Income-tax Officer did not hold the belief that there had been such non disclosure. In other words, the existence of the belief can be challenged by the assessee but not the sufficiency of the reasons for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has escaped assessment to tax. The material has rational connection and relevant bearing on such formation of belief for issuing valid notices for reassessment, the sufficiency of which is not justifiable issue at this stage and may be examined in the proceedings of reassessment. For the AY 2003-04, the additional ground of limitation also does not merit consideration, as we have held that A.O. had material available with him that on the failure of the assessee to have disclosed fully and truly all material facts the income chargeable to tax had escaped assessment. 17.The judgments relied by Sri Shubham Agarwal are of no help to the petitioner in view of our above conclusions on the facts of the present case. 18.In the result all the writ petitions fail and are hereby dismissed. The interim orders are vacated. The A.O. shall be at liberty to serve reassessment orders on the assessee if such orders have been made. If reassessment orders for any of the assessment years in question have not been made the A.O. is allowed to complete reassessment proceedings within a period of six months from today. There shall be no order as to costs. - - TaxTMI - TMITax - Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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