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2015 (9) TMI 895 - ITAT PUNE

2015 (9) TMI 895 - ITAT PUNE - TMI - Validity of reopening of assessment - non-supply of verbatim copy of reasons recorded for reopening the assessment - Held that:- .The Hon’ble Supreme Court in GKN Driveshafts (India) Ltd. Vs. ITO and Others [2002 (11) TMI 7 - SUPREME Court] held that when a notice under section 148 of the Income-tax Act, 1961, is issued, the proper course of action for the notice is to file the return and, if he so desires, to seek reasons for issuing the notices. The Assessi .....

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such reasons recorded for reopening the assessment. Thereafter, the Assessing Officer shall adjudicate the issue raised on merits after providing reasonable opportunity of hearing to the assessee. - Decided in favour of assessee for statistical purposes. - ITA No s.1611 to 1614/PN/2013 - Dated:- 31-8-2015 - SUSHMA CHOWLA AND SHRI PRADIP KUMAR KEDIA, JJ. For The Appellant Shri Neelesh Khandelwal For The Respondent Shri B.C. Malakar ORDER PER SUSHMA CHOWLA, JM: All the appeals filed by the assesse .....

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visions of section 147 of the Act and consequent re-assessment order passed under section 143(3) r.w.s. 147 of the Act. All the four appeals involve same issue and in order to adjudicate the same, we refer to the facts in ITA No.1611/PN/2013 relating to assessment year 2000-01. 4. The assessee in ITA No. 1611/PN/2013 has raised the following grounds of appeal :- 1. On facts & circumstances prevailing in the case & as per provisions of law, it be held that the Assessing Officer has erred .....

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income thereon. The addition made by the Assessing Officer and confirmed by the 1st appellate authority be cancelled on these scores be deleted. 3. Without prejudice to ground 1 & 2 above, on facts & circumstances prevailing in the case & as per provisions of law, it be held that the Assessing Officer has erred and confirmed by the 1st appellate authority be cancelled in taxing alleged investment & interest income thereon in the hands of the appellant firm on guesswork & surm .....

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n the facts of the present case, the assessee had originally filed the return of income on 31.10.2000 declaring total income of ₹ 64,870/-. The Assessing Officer received information from the Addl. CIT, Central Range 2, Pune that the assessee had advanced loan on interest to different persons through Shri Shriram Soni in whose case search under section 132 of the Act was conducted on 29.07.2003, in which various papers documents were seized. On the basis of the aforesaid papers documents s .....

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2007. In response to the said notice, the assessee furnished return of income on 13.04.2007 declaring income of ₹ 64,870/-. Consequent thereto, notice under section 143(2) of the Act was issued to the assessee on 22.11.2007. The assessee requested for copies of documents and also the reasons for issue of notice under section 148 of the Act. The Assessing Officer notes that the partner of the assessee firm Shri Naresh Rathod vide an Affidavit dated 07.12.2007 denied that the information sup .....

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of information received, the unaccounted income for the year under consideration was worked out at ₹ 14 lakhs and the same was added under section 69 of the Act. Further, interest earned on unaccounted investment totaling ₹ 29,900/- was added as income of the assessee. 6. Before the CIT(A), the assessee raised the legal plea challenging the invocation of the provisions of section 147 of the Act. The written submissions filed by the assessee are reproduced by the CIT(A) at pages 5 to .....

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r:- 4.6. Sec.153C clearly requires (a) seizure of money, bullion, jewellery or other valuable article or things or books of accounts or documents (b) satisfaction of the Assessing Officer that such seized documents etc. belongs to a person other than the searched person and © such documents, assets etc. shall be handed over to the Assessing Officer of the other person who will be noticed u/s 153C. One of the conditions precedent in sec.153C that the asset or document seized or requisitioned .....

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in whose premises the documents were found and seized and which was utilized by Shri Soni for maintaining a record of his brokerage and money lending activities. Accordingly, it is held from the facts of present case, the Pune ITAT s decision in Punjabi group of cases are factually different and no reliance can be on the same. Simply because the information in the form of ledger account extracts from the seized bundle numbers 99 and 100 was received by the Assessing Officer, it cannot be held as .....

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cument is not his and he has not made any unaccounted investment in money lending. By taking the stand that the information belongs to the appellant, he is indirectly admitting that the unaccounted investment has indeed being made. Be that as it may, for the reasons discussed above, the seized material in the form of ledger extracts containing the appellant s name cannot be held to be belonging to the appellant and therefore, merely constitutes information as held by the various courts for issue .....

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atisfied both from the side of the Assessing Officer as well as the appellant who has duly filed the return of income on 13.04.2007 in response to the notices issued u/s 148. Accordingly, Ground No.1 fails. 7. The CIT(A) also decided the issue on merits. 8. The preliminary issue raised before us is against the exercise of jurisdiction under section 147 r.w.s. 148 of the Act. 9. The learned Authorized Representative for the assessee at the outset pointed out that despite several requests, the exa .....

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. The learned Departmental Representative for the Revenue on the other hand, drawing our attention to the contents of the assessment order pointed out that the reasons recorded for reopening the assessment under section 147 of the Act were forwarded to the assessee during the course of assessment proceedings and even the documents thereon were shown to the assessee. The learned Departmental Representative for the Revenue further pointed out that in any case, the assessee had participated in the .....

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e after search and seizure operations were carried out under section 132 of the Act on the premises of Shri Shriram Soni on 29.07.2003. The Assessing Officer in view of the same, was of the view that there was escapement of income in the hands of the assessee and consequently, the provisions of section 147 of the Act were attracted. The Assessing Officer thereafter, issued notice under section 148 of the Act to the assessee for complying with the same. In response thereto, the assessee furnished .....

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m the Addl. CIT, Central Range 2, Pune, of investment in money lending business, which was unaccounted for. Both before the Assessing Officer and the CIT(A), the assessee had asked for the issue of verbatim copy of reasons recorded in the case of the assessee. The assessee by way of application dated 20.04.2007 had requested the Assessing Officer to issue the copy of reasons recorded for reopening the assessment in terms of provisions of section 147 of the Act. The copy of the said letter is pla .....

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geable to tax as well as interest earned thereon pertains to A.Y. 2000 -01, notice u/s.148 was issued. In subsequent year i.e. for A.Y.2001 -02, A.Y. 2002-03 and A.Y. 2003-04 the interest earned on these unaccounted income were remained to taxed i.e. escaped from assessment proceedings, notices u/s 148 were issued. 12. The assessee thereafter, wrote another letter dated 07.12.2007 to the Assessing Officer, copy of which is placed at pages 3 and 4 of the Paper Book, in which it was submitted that .....

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enclosed at pages 7 and 8 of the Paper Book. Vide letter dated 13.09.2011, the assessee requested the Assessing Officer during the remand proceedings to issue the verbatim copy of reasons recorded for issue of notice under section 148 of the Act as vide letter dated 22.11.2007, the Assessing Officer only communicated the reasons for issue of notice under section 148 of the Act and not the verbatim format. The assessee during the appellate proceedings before us has furnished an Affidavit to the e .....

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148 to 153, assess or re-assess such escaped income in the hands of the assessee along with any other income chargeable to tax which comes to his notice subsequently in the course of proceedings. Further, under the proviso to section itself, the time limit for resorting to the provisions of section 147 of the Act are provided. The requirement of the section thus, is for the Assessing Officer to have reason to believe that any income had escaped assessment and for such a belief, it is the require .....

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present case, it is the case of the Revenue that on receipt of information pursuant to search and seizure operations in the case of Shri Shriram Soni, reasons were recorded for reopening the assessment under section 147 of the Act and consequent thereto, notice under section 148 of the Act was issued to the assessee to furnish the return of income, which the assessee admittedly did. Thereafter, the assessee requested for the copy of reasons recorded under section 147 of the Act. The Assessing Of .....

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ed, the proper course of action for the notice is to file the return and, if he so desires, to seek reasons for issuing the notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the notice is entitled to file objections to issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. 15. The said proposition laid down by the Hon ble Supreme Court was applied by Mumbai Bench of Tribunal in Tata Inter .....

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