TMI Blog2015 (5) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the proviso under section 34(1) of the said Act were actually satisfied or not. The issue or question raised would be answered on guess work or mere probabilities as to what the ‘reason to believe’ was. It is for these reasons that the Division Bench held that the “reasons to believe” must be disclosed clearly in the record prior to the issuance of the default assessment notice/order or in the said notice/order itself. - reasons for extending the time for completing the re-assessment proceedings were not the reasons indicated in the proviso to section 34(1) but other purported reasons of pendency of cases, election duty etc. etc. Those purported reasons did not permit the respondent to invoke the extended period of limitation given in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax for the tax period, whichever is the earlier: PROVIDED that where the Commissioner has reason to believe that tax was not paid by reason of concealment, omission or failure to disclose fully material particulars on the part of the person, the said period shall stand extended to six years. (2) Notwithstanding sub-section (1), the Commissioner may make an assessment of tax within one year after the date of any decision of the Appellate Tribunal or court where the assessment is required to be made in consequence of, or to give effect to, the decision of the Appellate Tribunal or court which requires the re-assessment of the person. 3. Referring to the proviso to section 34 (1) the learned counsel for the petitioner submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the decision of the Division Bench in H.M. Industries (supra) and we find that the present case is fully covered by the ratio laid down therein. It has been observed by the court as under:- 10. It is true that proviso to Section 34(1) does not specifically mention that reasons to believe have to be recorded in writing. However, the said requirement has to be read and treated as part and parcel of Section 34(1) of the DVAT Act. The normal period of limitation as prescribed for passing of a default assessment order is four years. No reason or ground is required to be stated under Section 34 (1) if assessment/default assessment is made within the said period. However, when the extended period of six years is invoked, preconditions stipu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The written belief would be in consonance with the principle and mandate of good governance, fairness, transparency and would curtail arbitrariness and prejudice. Importantly, we would steer clear from the needless debate on whether and what was the reason to believe . xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx 18. As observed earlier, every error or mistake in the return which leads to short payment or non-payment of tax, would not be covered by the proviso to Section 34(1) of the DVAT Act. The said proviso will only apply when the preconditions stipulated therein i.e (1) the Commissioner records reasons to believe that the tax has not been paid; (2) the reason for non-payment of tax should be concealment, omission or failure t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be concealment, omission or failure to disclose full material particulars on the part of the assessee. In the present case no such reason to believe has been recorded. The submission made by the learned ASG that the ingredients of the proviso to section 34(1) could be gathered from the default assessment notice cannot be accepted in view of the observations of the Division Bench in H.M. Industries (supra) which we have already extracted above. To be clear, it has been observed that it would be a virtually impossible task for the appellate authority to first find and decipher the unknown and unrecorded reasons to believe and thereupon decide whether the requisite conditions for invoking the proviso under section 34(1) of the said Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009-10 are due to get time-barred by 31.03.2014, it is important to seek extension of time limit for these cases for the year 2009-10. If, agree, we may request the Competent Authority to kindly consider for extension of time-limit as per provision of the Act Rules (u/s 34 of DVAT). Sd/- 9-3-14 Asst. Commissioiner (HQ) Addl. Commissioner. (VAT Audit) Sd/ 10-3-14 (underlining added) From the above extract it is evident that the reasons for extending the time for completing the re-assessment proceedings were not the reasons indicated in the proviso to section 34(1) but other purported reasons of pendency of cases, election duty etc. etc. Those purported reasons did not permit the respondent to invoke the extended p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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