9911796707
TMI Blog2005 (3) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... vember 18, 2004, initiated under section 148 of the Act, which are challenged in Writ Petition Nos. 10608, 10629 and 10630 of 2005, referred to the above. While Writ Petitions Nos. 10608 and 10607 of 2005 are filed by one K.S. Suresh, W.P. Nos. 10629 and 10628 of 2005 are filed by one K.S. Ganesan and W.P. Nos. 10631 and 10630 of 2005 are filed by one K.S. Aghoram. Since the issue involved in Writ Petitions Nos. 10608, 10629 and 10630 of 2005 challenging the notices even dated November 18, 2004, under section 148 of the Act and the issue raised in Writ Petitions Nos. 10607, 10628 and 10631 of 2005, challenging the consequential proceedings of provisional attachment even dated November 25, 2004, issued under section 281B of the Act are the same and identical, arising under similar facts and circumstances of the case, the writ petitions are heard and disposed of jointly at the admission stage itself, of course after hearing the submissions of Mr. Janarthana Raja, learned counsel for the petitioners, as well as Mrs. Pushya Sitaraman, who takes notice on behalf of the respondent. Since the petitioners have chosen to challenge the notices even dated November 18, 2004, issued under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under 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. 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 furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d assessment. (2) Every such provisional attachment shall cease to have effect after the expiry of a period of six months from the date of the order made under sub-section (1): Provided that the Chief Commissioner, Commissioner, Director-General or Director may, for reasons to be recorded in writing, extend the aforesaid period by such further period or periods as he thinks fit, so, however, that the total period of extension shall not in any case exceed two years: Provided further that where an application for settlement under section 245C is made, the period commencing from the date on which such application is made and ending with the date on which an order under sub-section (1) of section 245D is made shall be excluded from the period specified in the preceding proviso." According to Mr. Janarthana Raja, learned counsel for the petitioner, immediately after the service of the impugned notices even dated November 18, 2004, the representatives of the respective petitioners, by their letters even dated November 29, 2004, requested the respondent to furnish respective copies of the recorded reasons for reopening of the assessment under sections 147 and 148 of the Act, as contem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act, 1961." It is pointed out that even though the respondent in paragraph 3 of the proceedings even dated February 10, 2005, has given opportunity to the petitioners to submit their objections on or before February 18, 2005, against the proposed reopening of the assessment under section 147 of the Act, the respondent has come to the conclusion that it is a fit case to levy penalty under section 271(1)(c) of the Act in paragraph 2.2 of the said proceedings even dated February 10, 2005, which apparently proves that the respondent has predetermined the issue and proposed to levy penalty under sections 271(1)(c) of the Act. Learned counsel for the petitioner drew my attention to the proceedings even dated February 10, 2005, and the objections filed by the respective petitioners even dated February 18, 2005, in which the petitioners relied on the following decisions, with regard to the power sought to be exercised under sections 147, 148, 271(1)(c) and 281B of the Act: (a) Tin Box Co. v. CIT [2001] 249 ITR 216 (SC); (b) Union Carbide Corporation v. Union of India, AIR 1992 SC 248; (c) S.L. Kapoor v. Jagmohan, AIR 1981 SC 136; (d) A.K. Kraipak v. Union of India, AIR 197 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were not considered by the respondent, while concluding that the assessment proceedings for the assessment year 2000-01 have been validly reopened under section 147 of the Act by proceedings dated March 21, 2005. Learned counsel for the respondent also concedes that the respondent has committed an error apparent on the face of the record by predetermining the issue, while holding that it is a fit case for levy of penalty under section 271(1)(c) of the Act, even while giving opportunity to the petitioners in his proceedings even dated February 10, 2005, to submit their objections on or before February 18, 2005, with regard to reopening of the assessment for the assessment year 2000-01 and before deciding the matter on the merits. However, learned counsel for the respondent seeks liberty to issue fresh notices to the petitioners and to proceed in accordance with law, if it is so proposed by the respondent. A Division Bench of this court in CIT v. Smt. Sulochana [2005] 272 ITR 529, to which I am a party, following the ratio laid down by the apex court in (i) ITO v. Lakhmani Mewal Das [1976] 103 ITR 437; (ii) Phool Chand Bajrang Lal v. ITO reported in [1993] 203 ITR 456 (SC); AIR 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jective satisfaction on the part of the Income-tax Officer. The reason must be held in good faith. It cannot be merely a pretence. It is open to the court to examine whether the reasons for the formation of the belief have a rational connection with or a relevant bearing on the formation of the belief and are not extraneous or irrelevant for the purpose of the section. As stated earlier, the reasons for the formation of the belief must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income-tax Officer and the formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts ..... The powers of the Income-tax Officer to reopen assessment, though wide, are not plenary. The words of the statute tire "reason to believe" and not "reason to suspect". The reopening of the assessment after the lapse of many years is a serious matter. The Act, no doubt, contemplates the reopening of the assessment if gr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
