TMI Blog2017 (8) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... tice under Section 148 of the Act can be issued, till the period to issue notice under Section 143(2) of the Act has expired. As in Commissioner of Income tax vs. Qatalys Software Technologies Ltd[2008 (7) TMI 240 - MADRAS HIGH COURT] in identical fact situation dismissed the Revenue's appeal by holding that where the period of issuing notice under Section 143(2) of the Act has not expired, then reassessment notice under Section 147/148 of the Act was invalid. - Decided in favour of assessee. - Income Tax Appeal No. 72 of 2003 - - - Dated:- 12-7-2017 - M. S. Sanklecha And Manish Pitale, JJ. Mr.N.S. Bhattad Saket Bhattad, Advocates for the Appellant Mr.A. Parchure A.J. Bhoot, Advocates for the Respondent JUDGMENT ( Per M. S. Sanklecha, J. ) This appeal under Section 260A of the Income Tax Act, 1961 (the Act) challenges the order dated 24th July, 2003 passed by the Income Tax Appellate Tribunal, Nagpur (Tribunal). The impugned order relates to the assessment year 1999-2000. 2. This appeal was admitted on 04.04.2007 on the following substantial question of law : 'Whether AO can proceeds with extraordinary power U/s. 147, particularly when no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 148 of the Act by the Assessing Officer is completely illegal. (b) The reliance in the impugned order upon the Explanation 2(b) of the Act is misplaced. The Explanation it is submitted is a safeguard against an assessee taking up a stand that as no assessment has been done, it is not open to the Assessing Officer to reach a conclusion that income chargeable to tax has escaped assessment. The Explanation 2(b) of the Act deems various cases wherein it is deemed that income chargeable under the Act has escaped assessment including a case where no assessment has been done. However, this Explanation 2(b) to Section 147 of the Act can only apply where the time to complete assessment has not expired on the date when the notice under Section 148 of the Act was issued on 25.01.2000. 7. On the other hand, Mr. Bhoot, learned counsel appearing for the Revenue supports the impugned order. It is further submitted that the powers of the Assessing Officer under Section 148 of the Act to issue reopening notice is not circumscribed/hedged in by the fact that the Assessing Officer has not completed the assessment under Section 143(3) of the Act. In support, he placed reliance upon the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 148 of the Act to reopen the assessment for Assessment Year 19992000, even before the time to issue notice under Section 143(2) of the Act to assess under section 143(3) of the Act had expired. It is clear from Section 143(1)(i) of the Act as in force at the relevant time that the intimation thereunder is without prejudice to the right of the Revenue to proceed under Section 143(2) of the Act. Thus, issue of intimation by itself does not bring to an end an assessment proceeding. It comes to an end only when the time to issue a notice under Section 143(2) of the Act expires/come to an end. 10. On the other hand, Section 147/148 of the Act empowers an Assessing Officer to reopen an assessment wherever he has reason to believe that income chargeable to tax has escaped assessment. This power under Section 147/148 of the Act is subject to various limitation provided therein. The power of reopening of assessment can be exercised where assessment has not been completed under Section 143(3) of the Act or even where intimation under Section 143(1)(i) of the Act has been issued provided the time to take further proceeding by issuing notice under Section 143(2) of the Act to complete ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to complete assessment under Section 143(3) of the Act by issuing a notice under Section 143(2) of the Act, if he is of the view that the assessee has understated his income or computed excessive loss or understated his tax to the prejudice of the Revenue. Therefore, we are clear that in view of the provisions of Section 143(1)(i) of the Act is in force at the relevant time, no notice under Section 148 of the Act can be issued, till the period to issue notice under Section 143(2) of the Act has expired. 12. Reliance is placed upon the decision of the Apex Court in Rajesh Jhaveri (supra) by the Revenue and in particular upon paragraph 18 thereof which reads as under : 18. So long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings even when intimation under section 143(1) had been issued. The aforesaid observation by the Apex Court is made in the context of the contention of the assessee that an Assessing officer cannot initiate reassessment proceedings, where intimatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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