9911796707
TMI Blog2007 (2) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... hed this court in WP(C) No. 18110 of 2006 which was disposed of by orders dated December 12, 2006, inter alia, directing the petitioner to fully participate in the assessment proceedings. At that stage the petitioner's grievance was that while dealing with its objections, by orders dated October 13, 2006, the Deputy Director of Income-tax acting for the Revenue had observed that the documents on which reliance was to be placed by the Department would, if found necessary, be disclosed to the petitioner. This court had relied on the following passage from Dhakeswari Cotton Mills Ltd. v. CIT [1954] 26 ITR 775 (SC) ; [1955] SCR 941 (page 783): "In the result we allow this appeal, set aside the order of the Tribunal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to it by the petitioner the respondents had recorded that they would not rely on any documents other than the said ledger account. This ledger account pertains to "Reach (ILD Creditor)". It also contains transactions pertaining to Reach Network Hongkong Ltd., Hutch Delhi (OSL-ILD Creditors), Reach (OSL-ILD Creditors), etc. In the course of arguments learned counsel for the Revenue has pointedly referred to the fact that contrary to the directions of this court the petitioner is not co-operating or participating in the assessment proceedings. 4. The main plank of the arguments addressed by Mr. Soli J. Sorabjee, learned senior counsel for the petitioner, is that reliance on the said ledger account cannot possibly constitute "reason to bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice under section 147 of the Income-tax Act had been issued after four years and, therefore, the pre-requisite for the existence of reason to believe that income has escaped assessment had come into sharp focus. As in Calcutta Discount [1961] 41 ITR 191 (SC) ; AIR 1961 SC 372, the Division Bench took into consideration the material before the Assessing Officer (the AO) and thereafter concluded that it was not sufficient for initiation of proceedings under section 147 of the Income-tax Act. On the other hand, Mr. Sabhärwal, learned counsel for the Revenue, has placed reliance on Raymond Woollen Mills Ltd. v. ITO [1999] 236 ITR 34 (SC), the entire judgment of which reads as follows (page 34) "The challenge in this case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment proceeding. We are not expressing any opinion on the merits of the case. The questions of fact and law are left open to be investigated and decided by the assessing authority. The appellant will be entitled to take all the points before the assessing authority. The appeals are dismissed. There will be no order as to costs." 5. In our view, there is clearly discernible watershed between assessment proceedings and reassessment proceedings. The courts have always been alive to the possibilities of harassment of an assessee by the Revenue officials. Where an assessment had been completed, the law after a change of opinion did not permit its reopening because of a change in opinion; the statute, therefore, enjoins the formation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the material before it. If it comes to a conclusion which is adverse to the assessee it will always be open to it to lay seige to it by way of filing an appeal before the Commissioner of Income-tax (Appeals) and thereafter to the Income-tax Appellate Tribunal ("the ITAT") which will have the final say so far as questions of fact are concerned. In rare cases a writ petition may also be entertained at that stage. Mr. Sabharwal has stated that even though Reach Network Hong-kong Ltd. is a separate legal entity the ledger account, prima facie, shows group transactions which need to be sufficiently explained to dispel the prima facie view that the petitioner has transactions in India which would led render it liable for payment of income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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