TMI Blog2017 (1) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived credible information as to income escaping assessment for the relevant assessment year. He had applied his mind to it and had informed the petitioner of his intention to invoke Section 148. He had given his reasons for doing so. AO had reasons to believe that, there was under assessment and that he has reasons to believe that, such under assessment had resulted from non disclosure of materials facts. Both of these two essential conditions are present in this case. The allegation is of bogus loss from brokers by client code modification being booked in the accounts. The reasons supplied by the Assessing Officer as noted above, allows one to infer that, the Assessing Officer had addressed its mind to such issue. The petitioner has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the relevant assessment year and thereby an income has escaped assessment. Learned Advocate for the petitioner submits that, immediately upon receipt of the notice under Section 148, the petitioner had raised an objection. Such objection has not been disposed of till date. He submits that, the reasons given for the purpose of invoking the provisions of Section 148 cannot stand judicial scrutiny. He further submits that, the re-assessment order has since been completed subsequent to the filing of the writ petition. He seeks leave to file a supplementary affidavit annexing a copy of the re-assessment order. Learned Advocate for the petitioner relies upon 35 ITR (Y. Narayana Chetty Anr.-Versus-Income Tax Officer, Nellore) and subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Department submits that, the conduct of the petitioner has to be looked into also to assess the steps taken by the Department in invoking the Section 148 and the ultimate disposal of such proceedings culminating in the order of re-assessment. He submits that, the petitioner was issued a notice under Section 148 of the Income Tax Act, 1961. The petitioner had replied thereto. The petitioner did not raise any objection of any substance in such reply. Subsequent thereto, the petitioner was provided with a reply to its objection. The petitioner did not assail the same. On the contrary, the petitioner requested for time to produce the documents asked for by the Assessing Officer through a Chartered Accountant. The petitioner produced such docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3, 2015. The reasons enumerated in writing dated July 3, 2015 shows that, the Assessing Officer had received information through the Deputy Commissioner of Income Tax that, the assessee had received bogus loss from brokers by client code modification. The Assessing Officer had, thereafter, proceeded to state that, in view of such information income has escaped assessment within the meaning of Section 147 of the Income Tax Act, 1961, and, therefore, the Assessing Officer is of the opinion that, it is a fit case for reopening the assessment for the relevant year. Subsequent to the receipt of the reasons, the petitioner had raised an objection by a writing dated August 21, 2015. Apparently, the objection was not dealt with by the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer to proceed with the re-assessment without any objection and without insisting upon disposal of the objection raised prior the re-assessment being done. The petitioner had also furnished the documents required by the Assessing Officer to be furnished in the proceedings under Section 148 after raising the objection. This conduct of the petitioner allows one to infer that, the petitioner had waived its rights to have the objections disposed of, alternatively, the petitioner had withdrawn its objections to the invocation of Section 148 of the Income Tax Act, 1961. Y. Narayan Chetty (supra) is of the view that, in the event a notice is invalid then, the subsequent steps taken also renders itself bad. In the present case, the two requi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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