TMI Blog2004 (9) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... gh C.J. - This appeal is directed against the order of the learned single judge dated March 16, 2004, rendered in SB Civil Writ Petition No. 6962 of 2003 whereby the writ petition was allowed and the notice issued under section 148 of the Income-tax Act, 1961, by the assessing authority was quashed. The facts giving rise to the appeal are as follows: The respondent-company filed its return of income for the assessment year 1996-97 on November 28, 1996. The assessment was completed by the assessing authority by its order dated February 26, 1999. However, on March 28, 2003 the assessing authority issued a notice to the respondent under section 148 of the Income-tax Act requiring the respondent to deliver to it (assessing authority) within 30 days from the date of service of the notice a return in the prescribed form on the ground that it has reason to believe that the income of the respondent chargeable for the assessment year 1996-97 had escaped assessment. Pursuant to the notice issued under section 148, the respondent filed a fresh return of income on March 28, 2003, before the assessing authority. Thereafter, the respondent on March 31, 2003, wrote a letter to the assessing aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of the end of the relevant assessment year. In this view of the matter, the learned single judge allowed the writ petition and quashed the impugned notice issued under section 148 of the Income-tax Act. The appellants, aggrieved by the decision of the learned single judge, have preferred the instant appeal. We have heard learned counsel for the parties. Learned counsel for the appellants submitted that the assessing authority had reason to believe that the respondent had omitted and failed to disclose fully and truly all material facts necessary for assessment relating to the assessment year 1996-97. He contended that this was reflected by the communications of the assessing authority dated December 5, 2003, and January 12, 2004. Therefore, according to him, the assessing authority was justified in issuing notice to the respondent under section 148 of the Income-tax Act and the impugned order of the learned single judge quashing the notice was not sustainable in law. On the other hand, learned counsel for the respondent submitted that the assessing authority issued the aforesaid notice under section 148 of the Income-tax Act after a period of four years from the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 148 thereof. In that case the material for assessment lay embedded in the record which was furnished by the assessee and it could be discerned only by careful and deep scrutiny of the same and, therefore, the belief of the assessing authority that the assessee had not disclosed material facts truly and fully in his assessment was not faulted by the Delhi High Court. In Dr. Amin's Pathology Laboratory v. P.N. Prasad, Joint CIT (No. 1) [2001] 252 ITR 673 the Bombay High Court held as follows: "Under Explanation 1 to the proviso, mere production of account books from which material evidence could have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the proviso. Therefore, mere production of the balance-sheet, profit and loss account or account books will not necessarily amount to disclosure within the meaning of the proviso. In the present case, the facts show that the Assessing Officer overlooked the aforestated item. That, he noticed it subsequently. That, at the time of passing the original order of assessment, he could not be said to have opined on the above item. Therefore, there was no change of opinion. Therefore, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repaid lease rent and likewise. You did not come forward with sample copy of the lease agreement by you with the lessor. In this connection please refer to similar enquiry during the course of assessment proceedings for the assessment year 2000-01 in which you have provided one page of expressed explanation and as many as 58 pages of supporting evidence which includes summary of lease payment for the relevant year and the summary to each lease agreement in terms of monetary and periodicity of payment aspects. You have also enclosed a copy of all the relevant lease agreement." A reading of the letters dated December 5, 2003, and January 12, 2004, reflect that the escapement of income according to the assessing authority is attributable to wrong claim preferred by the assessee and its failure to disclose the material facts truly and fully. Thus, the reason recorded by the assessing authority has nexus with the formation of belief by the assessing authority for taking action under section 147 of the Income-tax Act. Therefore, section 149(1)(b), read with section 147 has been invoked by the assessing authority for reopening the assessment. It is well settled that the sufficiency of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of this case. It will be open to the assessee to prove that the assumption of facts made in the notice was erroneous. The assessee may also prove that no new facts came to the knowledge of the Income-tax Officer after completion of the assessment proceeding. We are not expressing any opinion on the merits of the case. The question 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." It seems to us that when a notice under section 148 of the Income-tax Act is issued to a noticee, he is to adopt the following path paved and recognised by the Legislature and the judicial decisions: (1) File a return in response to the notice. (2) He can ask the assessing authority to furnish reasons for issuance of the notice, which the assessing authority is bound to communicate to him within a reasonable time. (3) On receiving the reasons he may file objections thereto, which the assessing authority is bound to decide by a speaking order before proceeding with reassessment of income chargeable to tax with regard to the relevant assessment year. (4) After the passing ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
