TMI Blog2012 (8) TMI 1176X X X X Extracts X X X X X X X X Extracts X X X X ..... assessed under Section 143(3) of the Income Tax Act, 1961 (hereafter the Act ) for AY 2002-03 on 31.12.2004. On 27.3.2009, Addl. CIT Range-14, Mumbai received information that the assessee had used accommodation entries during the financial year 2001-02 in respect of purchases from M/s Manoj Mills, Aastha Silk Industries and M/s Shree Ram Sales and Synthetics. Consequently, notice under Section 148 of the Act was issued, after recording the reasons in writing for re-assessment, and taking the necessary approvals. During the course of re-assessment proceedings, the Assessing Officer (AO) observed that the assessee had relied on accommodation entries from M/s Manoj Mills amounting to ₹ 22,11,176/-, from M/s Aastha Silk Industries amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading of the above exposition of law by the Hon ble Jurisdictional High Court makes it clear that the issuance of the notice and the communication and furnishing or reasons would go hand in hand. The reasons are to be supplied to the assessee before the expiry of period of six years. If it has not been done validity u/s 148 could not be upheld. In this case, reasons were not supplied before the expiry of the six years from the end of the relevant assessment year. Under the circumstance, the reassessment in this case is bad in law, hence we quash the same. 5. The limited ground urged by learned Senior standing counsel for the Revenue Mr. N.P. Sahni was that there is no requirement in law that when a notice for reassessment under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, 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 or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : *** 148. Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in our opinion lost sight of the distinction and under a wrong basis felt bound by the judgment in [1964]53ITR100(SC) . In G.K.N. Driveshafts (supra), it was held that: [W]e clarify that when a notice under Section 148 of the Income Tax Act is issued, the proper course of action for the notice 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 notice 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. A.G.Holdings (supra) held that: There is no requirement in Section 147 or Section 148 or Section 149 that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e., on 27.3.2009, there is no infirmity with the assumption of jurisdiction by the AO even though the service of the notice was after the expiry of the six year period. 9. Secondly, A.G. Holdings, a decision of an earlier Division Bench of this Court, elucidates that there is no requirement under the Act, or under even the judicially laid down procedure to furnish the assessee with the reasons to believe on the basis of which reassessment proceedings under section 147 are intimated. The contentions of the assessee, in this regard, have no merit are thus rejected. The decision in Haryana Acrylic (supra), being consistent with that in G.K.N. Driveshafts (supra), merely held that when reasons are sought, they should be supplied within ..... X X X X Extracts X X X X X X X X Extracts X X X X
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