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TMI Blog2018 (11) TMI 1617X X X X Extracts X X X X X X X X Extracts X X X X ..... to assess the petitioner under Section 158 BD of the Income Tax Act, 1961. 3. In response to the above said notice, the petitioner submitted a return admitting an income of Rs. 1,41,04,160/-, based on its books and regularly maintained accounts which are duly audited. The petitioner had also claimed depreciation in calculation of income claimed at the rate of 40% on Bull dozers, Road Rollers, Jeep with trailer and other earth-moving equipments used in respect of its Civil Engineering Contracts. 4. The petitioner states that in computing the income under Section 148 BD, the amount of income declared for the assessment years 1994-1995 and 1995-1996, wherein the petitioner had claimed supervisory charges payable to M/s.T.C.V.Packers, amounting to Rs. 24.68 lakhs for the assessment year 1994-1995 and Rs. 33.67 lakhs for the assessment year 1995-1996. Based on the arrangement between the petitioner and M/s.T.C.V.Packers, the petitioner was liable to pay 10% of the gross income from their contracts M/s.T.C.V.Packers as supervisory charges. But no such supervisory charge was payable to the previous assessment year 1996-1997 and the petitioner did not make any such claim in respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sufficient reason to believe that the income had escaped assessment in the reopened assessment. 13. The Assessing Authority has merely exercising the jurisdiction under Section 147 of the Act, to make rowing enquiries, which is not warranted under the provisions of Income Tax Act. 14. It is further contended that no authority under the rank of the Joint Commissioner can issue a notice under Section 148 after expiry of 4 years from the relevant Assessment Year unless the Joint Commissioner is satisfied under the reasons recorded by the Assessing Officer that it is a fit case for issue of such notice when the case is specifically covered by Section 151 (2) of Income Tax Act, 1961 and it does not fall within the provisions of Sub- Section 1 (i) of Section 151. 15. At the outset, it is contended that the very notice issued by the authority under Section 148 of the Act, is without jurisdiction, the learned counsel for the petitioner is of an opinion that the procedures contemplated were not followed. This apart, there is no reason to believe for reopening of the assessment for the year 1996-1997. The provision warrants the reasons to be recorded and to the knowledge of the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51. (3) If the person on whom a notice under Section 148 is to be served is a person treated as the agent of a non-resident under Section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of six years from the end of the relevant assessment year. Explanation : For the removal of doubts, it is hereby clarified that the provisions of sub-sections (1) and (3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012." 18. Section 149(a) is inapplicable to the case of the petitioner as the petitioner falls under the category of beyond one lakh. Thus Section 149(1)(b) of the Act, is applicable in respect of the case of the petitioner. Thus, the reopening of the assessment is to be done by the Assessing Officer within the period of six years from the assessment year. In the present case on hand, admittedly, the notice was issued within a period of six years. Thus, there is no infirmity, as such, in respect of issuing notice under Section 148 of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdance with this Chapter, shall pass an order of assessment and determine the tax payable by him on the basis of such assessment". Reference to Section 143(3) is merely procedural. There are various Sections in the Act under which assessment are completed like Section 147, Section 158-BC etc. But in the assessment order, along with Section 147/Section 158-BC, Section 143(3) is also referred. Similarly to give effect to C.I.T's order under Section 263 or 264 or C.I.T.(A)'s order under Section 251 or I.T.A.T. Order under Section 254, Section 143(3) is used as "Read with Section". In this case, the core Section under which the assessment is completed under Chapter XIVB is under Section 158-BC(c) r.w.s. 158-BD. There has been so many decisions wherein the Courts have held that regular assessments under Chapter XIV and Block assessment under Chapter XIV-B are parallel and can be proceeded simultaneously and independently. In this case for the Assessment Year 1996-97 and 1997-98 no regular assessment has been completed under Section 143(3) or 147 earlier and therefore as mentioned in my last letter dated 28.10.2003, Your case is covered under Section 151(2) of the I.T. Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years." The procedures prescribed by the Supreme Court of India in G.K.N.Driveshafts (India) Limited case, are to be followed by the Competent Authorities scrupulously. 27. The learned counsel for the respondents also has not disputed the proposition and reiterated that the Authorities Competent are following the principles laid down by the Apex Court and with reference to the present writ petition on hand, the same procedure has been followed. 28. This Court has elaborately considered the Legal principles in the case of South Asia FM Ltd., reported in [2018] 98 taxmann.com 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be defeated. The wide power provided to the authorities competent to reopening of the assessment and to ensure that all external materials and the informations received from various sources should also be dealt in accordance with the provisions of Law. Thus, it does not mean that the Income Tax Authorities may reopen at any point of time. In order to protect the Assessees a definite time limit has been provided under the Act itself. Thus in the event of receiving any informations or materials from any other sources can be a ground for reopening of the assessment and the period of limitation is four years and six years respectively and in respect of the present writ petitions, it is six years. 98. The procedure of reopening of the assessment is contemplated under Sections 148 to 153 of the Act. Once again looking into the spirit of Section 147, it is unambiguously enumerated that "assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this Section, or recompute the loss or the depreciation allowance". 99. The language employed in Section 147(1) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer that the Assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return. 102. The circumstances are narrated wherein certain materials and informations are provided by the Assessee at the time of filing of the returns and if the same has not been assessed by the Assessing Officer during the relevant assessment year and if it is subsequently noticed, then also the Assessing Officer is empowered to reopen the assessment in respect of the escaped assessments. 103. On a perusal of various circumstances incorporated under Section 147 of the Act, for reopening of the escaped assessment, this Court is of an opinion that it is certainly flexible and wider power has been provided, enabling the Assessing Officer to reopen the assessment in the interest of revenue and to ensure that the Assessees pay the correct tax with reference to the provisions of the Act. 104. This Court is of a firm opinion that where certain doubts in respect of the reasons or otherwise have been raised by the Assessee, such benefit of doubt should be held in favour of the revenue and not in favour of the taxpayer. Contrariness is to be established by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that if the Assessing Officer has reason to believe that income has escaped assessment, it confers jurisdiction to reopen the assessment. It is however, to be noted that the conditions stipulated in the Act must be fulfilled if the case falls within the ambit of Section 147. 113. Considering the fact that there are some materials on record and the informations with the Department of Income Tax, the reopening of the assessment in the writ petitions with reference to Sections 147 to 153 of the Act, is in accordance with law and there is no infirmity, as such. Thus, the writ petitioner is bound to respond to the Assessing Officer for the purpose of arriving a conclusion and for taking a decision. In the event of passing an order of assessment or reassessment, then the writ petitioner is entitled to prefer an appeal contemplated under the provisions of the Act. Contrarily, based on the preliminary informations gathered by the Assessing Officer, the notices issued for the purpose of reopening of the assessment would not provide a cause of action for filing of the present writ petitions and this Court has no hesitation in holding that the writ petitions are not only premature, even ..... X X X X Extracts X X X X X X X X Extracts X X X X
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