TMI Blog2017 (1) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... terference at the behest of the petitioner. The Settlement Commission, based upon the documents submitted by the respondent No.5 has passed a final order. So far as notices which have been issued u/S. 148 for the assessment year 2010-2011 and 2011-2012 is concerned, the proper course of action for the petitioner is to file return and if he so desires, to seek reasons / documents for issuing such notices and in case any application is preferred for demand of material on the basis of which assessment has been done, the material shall be given to the petitioner enabling him to defend his case. The assessing Officer, after granting opportunity of hearing to the petitioner and after taking into account the objections and the material, shall pass a speaking order in accordance with law. This Court does not find any reason to interfere with the order passed by the Settlement Commission at the behest of the petitioner which has been passed in respect of respondent No.5 nor does find any reason to interfere with the notices u/S. 148 of the Income Tax Act, 1961. - Writ Petition No. 7927/2016 - - - Dated:- 16-12-2016 - S. C. Sharma And Rajeev Kumar Dubey, JJ. ORDER S. C. Sharm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 is certainly a speaking order. The respondents have further stated that certain facts relating to escapement of income chargeable to tax was brought tot he notice of the Assessing Officer and the Assessing Officer is proceeding in accordance with law against the petitioner and, therefore, the question of interference in the assessment proceedings does not arise. Learned counsel for the petitioner has placed reliance upon the judgment delivered by the Hon'ble Apex Court in the case of Commissioner of Income Tax, Delhi Vs. M/s. Kelvinator of India Ltd., (C.A.No. 2009-2011 of 2003 decided on 18/1/2010) and his contention is that in similar circumstances the apex Court has dismissed the petition filed by the Income Tax Department against the judgment of the High Court by which the High Court has quashed the Show Cause Notice issued u/S. 147 of the Income Tax Act, 1961. It has been vehemently argued that the Show Cause Notice issued by the Assessing Officer is void ab initio because no reason has been assigned by the Assessing Officer. Reliance has also been placed upon an interim order passed by the Division Bench of this Court in the case of Malay shrivastava Vs. The D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 139 or in response to a notice issued under subsection (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year: Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Explanation 1.-Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2.-For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely :- (a) where no return of income has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , apply accordingly as if such return were a return required to be furnished under section 139 : Provided that in a case- (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to sub-section (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or recomputation as specified in subsection (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice: Provided further that in a case- (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and (b) subsequently a notice has been served under clause (ii) of sub-section (2) of section 143 after the expiry of twelve m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 148(2) of the Income Tax Act, 1961 Name of the Assessee : M/s Goyal Developers : 47, MTH Compound, Indore PAN : AAFFG5813Q A.Y. : 2010-11 Search seizure operations were carried out in the Apollo Group of Indore on 21.9.2012. This group is headed by Shri Nirmal Agrawal and Shri Anil Krishnadas Agrawal. M/s Divya Dev Developers Pvt. Ltd. And M/s. Apollo Creations Pvt. Ltd. are the flagship concerns of the group. During the course of search operations in the Apollo group cases, various incrminating documents were found and seized from the premises of the assessee, their associates and employees which clearly establish the modus operandi of taking on-money by the assessee group in various projects. The assessee group has also admitted and accepted the said modus operandi during the search as well as before the Hon'ble Income Tax Settlement Commission. The assessee firm is engaged in business of Real Estate during the F.Y. 2008-09, the assessee firm decided develop and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Act, 1961. (Amit Kumar Soni) Asstt. Commissioner of Income Tax (Central)-1, Indore This Court has carefully gone through the Show Cause Notice issued by the Assessing Officer and the Record of reasons to believe. The Show Cause Notice has been issued by taking into account the various incriminating documents which were found during search and seizure from the premises of the assessee, their associates and employees. Mere mentioning of certain facts by the Settlement Commission will not make the Show Cause Notice invalid. Not only this, the Settlement Commission while rejecting the intervention application has held as under : During the hearings before us the A.R. Reiterated the above arguments and also filed an affidavit from the directors of the applicant company in which the entire facts relating to payment of on money to Goyal Developers from the sale of flats coming into their share have been stated on oath. As the Assessing Officer of the applicant also happens to be the A.O. Of the Goyal Group he was asked to inform if Goyal Developer have disclosed any income on this account in their return and if not, whether the Department has con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being heard to third party with whom the applicant had business dealings. In terms of Income Tax Settlement Commission (Procedure) Rules, 1997, the proceedings before the commission are not open to the public and other than applicant or his authorised representative or the income tax department, no third party can attend or intervene in such proceedings. In view of this, the application dt. 28/3/2016 of M/s. Goyal Developer Indore is not being taken into consideration while finalizing the present proceedings. The Settlement Commission, at page 46, has also observed as under : Since M/s. Goyal Developers is not a party to these proceedings, we refrain for giving any finding about taxability or otherwise of unaccounted receipts from Uptown Apollo Project in the hands of M/s. Goyal Developers. The department is free to complete proceedings initiated u/S. 148 in that case on the basis of information / evidence available and duly following provisions of law. Thus, the order of the Settlement Commission makes it very clear that they have refrained themselves from giving any finding about taxability or otherwise of unaccounted receipts from Uptown Apollo Project in the hands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision from the Assessing Authority, if for any reason it is aggrieved by the said decision, to question the same before the forum provided under the Act. 17. In view of the above, without expressing any opinion on the correctness or otherwise of the construction that is placed by the High Court on Section 153C, we set aside the impugned judgment and order. Further, we grant time to the assessee, if it so desires, to file reply/objections, if any, as contemplated in the said notices within 15 days' time from today. If such reply/objections is/are filed within time granted by this Court, the Assessing Authority shall first consider the said reply/objections and thereafter direct the assessee to file the return for the assessment years in question. We make it clear that while framing the assessment order, the Assessing Authority will not be influenced by any observations made by the High Court while disposing of the Writ Petition. If, for any reason, the assessment order goes against the assessee, he/it shall avail and exhaust the remedies available to him/it under the Act, 1961. 17. Keeping in view all these factors and the totality of the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee 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. In the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking Order before proceeding with the assessment in respect of the abovesaid five assessment years. Insofar as the appeals filed against the order of assessment before the Commissioner (Appeals), we direct the appellate authority to dispose of the same, expeditiously. With the above observations, the civil appeals are dismissed. No costs. In the light of the aforesaid judgments, this Court is of the considered opinion that under the provisions of the Income Tax Act, 1961 if certain facts have been brought to the notice of the Assessing Officer relating to escapement of income chargeable to tax, he is bound to reassess the in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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