TMI Blog2017 (9) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... on, incentive and other payment made to the field officers. The petitioner had claimed the same as an expenditure in its return. Such claim was disallowed by the assessing officer in the order of assessment. An appeal is pending against such portion of the order of assessment. The appeal is yet to be disposed of. Therefore, on the parity of reasoning for the first ground as noted above, and in addition thereto, in view of the fact that, if Section 148 is allowed to continue, it may result in conflict in decision between the assessing officer and the appellate authority on the same head, it would be appropriate to hold that the invocation of Section 148 for the same is improper. Therefore the reasons for invocation of Section 148 of the act of 1961 on the second ground also fails. Treatment of the suspense account - Held that:- The claim made on this head was disallowed by the assessing officer to the extent of 50%. Again the assessing officer before passing the order of assessment had called upon the petitioner to furnish information with regard thereto. The petitioner had furnished such information in its reply. In addition, the petitioner had written a letter dated January 17, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved upon the assessee. The fact remains that, the writ petition was filed immediately after the order dated September 22, 2006. The writ petition is pending since then. As noted above, the department did not have necessary material before it to invoke Section 148 of the Act of 1961 in respect of the assessment year concerned. - WP No. 1952 of 2006 - - - Dated:- 6-9-2017 - Debangsu Basak, J. Mr. Abhijit Chatterjee, Sr. Adv. Mr. Somak Basu, Adv. For the petitioner Md. Nizamuddin, Adv. Mr. Siddhartha Lahiri, Adv. For the respondents ORDER The Court :- The petitioner assails a notice under Section 148 of the Income Tax Act, 1961 proposing to reopen the assessment year 1999-2000. The reasons for such reopening is also under challenge. The final order dated September 22, 2009 negating the objections raised by the petitioner to such reopening is also under challenge in the present writ petition. Learned senior advocate appearing in support of the writ petition submits that, as appearing from the averment made in the affidavit-in-opposition, the impugned notice under Section 148 was issued without the prior approval of the higher authority as contemplated under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessing officer in disallowing the commission claimed in its entirety. Since the appeal is pending, it would not be prudent on the part of the department to have such issue revisited under the provisions of Section 148 of the Act of 1961. In such a method, there will be a chance of conflict in decision with regard to the tax liability of the assessee. He draws the attention of the Court to the fact that, prior to the order of assessment being passed, the department raised queries with regard to the commission and that, the petitioner replied thereto. Referring to the third ground for reopening the assessment for the assessment year 1999-2000 as appearing from the reasons supplied by the department, learned senior advocate for the petitioner submits that, the suspense account of ₹ 103.81 lacs emanating out of deferred obligation charge to the return to certificate holders fund was also placed before the assessing officer. The claim on account of suspense account was considered by the assessing officer. The assessing officer disallowed 50% in the order of assessment. Again it cannot be said that, the petitioner is guilty of suppression of any material fact or not m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ange of opinion on the interpretation of a particular provision or the material placed on record before the assessing officer. He relies upon two unreported decisions of the Court in W.P. No. 1280 of 2001 (Tinplate Company of India Ltd. vs. Joint Commissioner of Income Tax) dated May 5, 2016 and W.P. No. 1158 of 2000 (Tinplate Co. of India Ltd. vs. Joint Commissioner of Income Tax, Special Range 7, Calcutta) dated July 20, 2016 in support of the proposition that, the Court after noticing the various authorities on the subject had quashed the notice under Section 148 of the Act of 1961. Referring to the impugned order, learned senior advocate for the petitioner submits that, the impugned order does not take into account the factual matrix in the correct perspective. The impugned order suffers from the vice of perversity although the impugned order notices Calcutta Discount Co. Ltd. (supra) it does not apply the ratio laid down therein correctly. He contends that, a notice under Section 143(2) of the Income Tax Act, 1961 is mandatory for the assessing officer to pass an order of assessment, even after invoking the provisions of Section 148 read with Section 147 of the Income Tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith regard to the notice under Section 148 of the Act of 1961 not being issued after obtaining permission from the higher authority is concerned, it appears from the record produced in Court on behalf of the department, inspection forthwith being given to the learned senior advocate for the petitioner in Court that, the authorities did obtain permission from the higher authorities on March 22, 2006 itself. Therefore the contention of the petitioner that the notice under Section 148 of the Act of 1961 was issued without the due approval of the higher authority as envisaged in law is without any basis. The other contention that, the assessing officer in fact is having a change in the opinion in respect of matters placed before him and considered by him in the order of assessment, is required to be considered. Calcutta Discount Co. Ltd. (supra) is of the view that, two conditions have to be satisfied in its entirety, for the Income Tax Officer to reopen an order of assessment after four years under Section 148 of the Act of 1961. The first condition is that, the officer must have reasons to believe that there has been under-assessment. The second condition is that, he has to have r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing officer in his order of assessment. In fact, he had required further evidence and documents from the assessee prior to the order of assessment to which the petitioner had replied furnishing the same. The assessing officer had taken a particular view on the subject. Although no appeal is pending against the portion of the order with regard to return to certificate holders, in my view, the reasons, not specifying the tangible new materials available with the department to allege that the petitioner is guilty of not making a true and proper disclosure, is not sufficient to reopen the assessment. In absence of such material, the authorities have incorrectly applied the principles laid down in Calcutta Discount Pvt. Ltd. (supra) and followed subsequently for the purpose of reopening the assessment order on that ground. The second ground for reopening the assessment is commission, incentive and other payment made to the field officers. The petitioner had claimed the same as an expenditure in its return. Such claim was disallowed by the assessing officer in the order of assessment. An appeal is pending against such portion of the order of assessment. The appeal is yet to be disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of assessment. In such context, the Supreme Court is of the view that, once an order of assessment is passed and the assessee has a statutory alternative remedy, the Writ Court need not interfere therein, unless it is established that, there is a breach of fundamental right of the petitioner or that authorities have acted wholly without jurisdiction. In the present case, the writ petitioner approached the Writ Court immediately upon receipt of the order dated September 22, 2006. The order of assessment is much later. It is dated December 29, 2006. The department claims that, the interim order passed in the writ petition permitted the department to pass an order of assessment and so it has done so. The writ petitioner claims that, the writ petitioner was not served with the notice under Section 143(2) of the Act of 1961. The department contends that the appropriate notice was served upon the assessee. As a Writ Court I need not enter into such arena. The fact remains that, the writ petition was filed immediately after the order dated September 22, 2006. The writ petition is pending since then. As noted above, the department did not have necessary material before it to invok ..... X X X X Extracts X X X X X X X X Extracts X X X X
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