TMI Blog2018 (11) TMI 1617X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Supreme Court of India in G.K.N.Driveshafts (India) Limited case, [ 2002 (11) TMI 7 - SUPREME COURT] are to be followed by the Competent Authorities scrupulously. As contended that the Assessing Officer had passed an order, rejecting the objections submitted by the writ petitioner. AO has to complete the process of assessment and accordingly, take a decision and pass final orders by providing further opportunity to the assessee concerned. The writ petitioner, who is an assessee, is entitled to submit all his further objections, documents or materials available with him, enabling the Assessing Officer to consider his case independently and with reference to the documents and materials produced by the writ petitioner and also the documents and materials available with the Income Tax Department. AO is empowered to consider the issue relating to jurisdiction, time limit and all other legal grounds raised by the writ petitioner at the time of passing the final orders. This Court has no hesitation in coming to the conclusion that the writ petitioner is entitled to submit all his objections and legal grounds and materials, enabling the AO to consider the same and pass an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of the assessment year 1996-1997. 5. The following break-up of the aforesaid income for the various assessment years was arrived at as follows: Assessment year Total Income Including undisclosed income Total income admitted/ assessed Undisclosed Income 1994-95 1,34,86,033/- 37,40,210/- 97,45,823/- 1995-96 1,61,75,155/- Nil 1,61,75,155/- 1996-97 1,21,85,676/- 84,17,908/- 37,67,768/- Total 2,96,88,746/- 6. Aggrieved by the order of Assistant Commissioner, Central Circle II(2) Chennai, the petitioner filed an appeal before the Income Tax Appellate Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner 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 petitioner, no such valid reason has been recorded before issuing the notice under Section 148 of the Income Tax Act. Thus, the notice itself is liable to be scrapped. 16. The learned counsel for the respondents, appearing on behalf of the Income Tax Department, reiterated the contentions by stating that under Section 147 of the Income Tax Act, the Assessing Officer is empowered to reopen the escaped assessment, if he has a reason to believe that any income chargeable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter 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 Income Tax Act is concerned. 19. With reference to the said objections by the respondents, the learned counsel for the petitioner has drawn the attention of this Court regarding Section 147, which reads that Provided that where an assessment under sub-section (3) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. 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, 1961. Your objection that notice is beyond jurisdiction is therefore rejected. 23. In respect of the facts and the grounds submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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., repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. If it is restricted, then the very purpose and object of the Income Tax Act will 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 proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 147 also provides power to the Assessee where a return of income has been furnished by the Assessee but no assessment has been made and it is noticed by the Assessing Officer 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice, to turn around and say you accepted my lie, now your hands are tied and you can do nothing . It would be travesty of justice to allow the assessee that latitude. 112. On careful consideration of all the judgments, cited supra, this Court is of an undoubted opinion 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
