TMI Blog2019 (12) TMI 1426X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the Assessing Officer on a proceeding under section 147 of the Act. If we look into the proceedings under challenge, it would clearly reveal that there are sufficient reasons given by the Assessing Officer, which according to him is reason to believe of an income of more than ₹ 2.53 crores, which are chargeable to tax has escaped assessment and which has come to the notice of the Department at a later stage in the course of scrutiny. This court has no hesitation to reach to the conclusion that the case in hand cannot be said to be one which is barred by limitation as the proceedings drawn by the Assessing Officer seems to be with sufficient material in record showing income, which otherwise is chargeable to tax having escaped assessment. - Writ Petition (T) No. 139 of 2019. - - - Dated:- 20-12-2019 - P. Sam Koshy J. For the Petitioner : Sumit Nema , Senior Advocate with Raja Sharma , Advocate For the Respondent : Smt. Naushina Ali , Ajay Kumrani and Topilal Bareth , Advocates JUDGMENT P. SAM KOSHY J. - 1. Challenge in the present writ petition is the notice dated March 20, 2019 issued by respondent No. 3. Vide the said notice, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e out and the reassessment proceedings deserve to be held as barred by limitation. 5. Further the contention of the petitioner is that, the reasons to believe recorded by the Department again is baseless for the simple reason that there is no finding by the authorities as regards any suppression of material facts during the course of scrutiny of assessment under section 143(3) of the Act. It was further contended by the petitioner that law is also well settled that even if there is a change of opinion, the proceeding for reassessment under section 147 of the Act could not have been initiated. 6. It was also contended that the reasons to believe provided by the Department are all vague, ambiguous and without any basis and there being no tangible material to support the reasons to believe. There is also no objective finding or reasons given by the authorities while giving reasons and also while rejecting the objections preferred by the petitioner. 7. The counsel for the petitioner relied upon ITO v. Techspan India Pvt. Ltd. [2018] 404 ITR 10 (SC), the case of Techspan India P. Ltd. v. ITO [2006] 283 ITR 212 (Delhi) passed by the Delhi High Court, the judgment of the Bombay H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initiated. Therefore, the proceedings are not barred by limitation. 11. The counsel for the respondents relied upon the judgments passed in the case of Phool Chand Bajrang Lal v. ITO [1993] 203 ITR 456 (SC) ; 1993 4 SCC 77, ITO v. Purushottam Das Bangur [1997] 224 ITR 362 (SC) ; 1997 3 SCC 253, ITO v. Selected Dalurband Coal Co. Pvt. Ltd. [1996] 217 ITR 597 (SC) ; 1997 10 SCC 68, Asst. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd. [2007] 291 ITR 500 (SC) ; 2008 14 SCC 208, and Deputy CIT v. Zuari Estate Development and Investment Company Limited [2015] 373 ITR 661 (SC) ; 2015 15 SCC 248. 12. So far as the issue of notice of reassessment being barred by limitation is concerned, it would be relevant at this juncture to reproduce section 151(1) of the Income-tax Act for ready reference : 151. Sanction for issue of notice.-(1) No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere under the provisions of section 147, either in the main section nor under the proviso clause, so also neither under the Explanations provided under this section, is there a bar for the Department to initiate reassessment if the documents/records have already been submitted to the Department at the time of assessment being made. Neither does the said provision anywhere envisage that once if the books of account have been scrutinized, the same cannot be scrutinized again for the purpose of initiating a proceeding under section 147 of the Act. The documents having been submitted to the Assessing Officer at the first instance and the Assessing Officer having skipped/missed the said transaction from being assessed or having been overlooked, the same would not bar the Department from initiating proceedings under section 147 of the Act in case if the Department finds at a later stage certain transactions which have escaped assessment. 18. The only condition which is required under section 147 of the Act for reopening the assessment is that, the Assessing Officer should have reasons to believe that certain income chargeable to tax had escaped assessment. Such belief has to be to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll material facts necessary for the assessment. Both these conditions must co-exist in order to confer jurisdiction on the Income-tax Officer. The Income-tax Officer is obliged, before initiating proceedings under section 148 of the Act to record the reasons for the formation of his belief to reopen the assessment. . . . We are not persuaded to accept the argument of Mr. Sharma that the question regarding truthfulness or falsehood of the transactions reflected in the return can only be examined during the original assessment proceedings and not at any stage subsequent thereto. The argument is too broad and general in nature and does violence to the plain phraseology of sections 147(a) and 148 of the Act and is against the settled law by this court. We have to look to the purpose and intent of the provisions. One of the purposes of section 147, appears to us to be, to ensure that a party cannot get away by wilfully making a false or untrue statement at the time of original assessment and when that falsity comes to 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come for any assessment year has escaped assessment. The word 'reason' in the phrase 'reason to believe' would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an in-built idea of fairness to taxpayers. As observed by the Supreme Court in Central Provinces Manganese Ore Co. Ltd. v. ITO [1991] 191 ITR 662 (SC), for initiation of action under section 147(a) (as the provision stood at the relevant time) fulfilment of the two requisite conditions in that regard is essential. At that stage, the final outcome of the proceeding is not relevant. In other words, at the initiation stage, what is required is 'rea son to believe', but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly subjected to challenge in writ appeal also being W. A. No. 336 of 2019 and the Division Bench on July 29, 2019 Precision Engineering v. Asst. CIT (No. 2) [2020] 427 ITR 258 (Chhattisgarh) dismissed the writ appeal affirming the order passed by the Single Bench. 24. The phrase reasons to believe does not mean that the Assessing Officer should have ascertained the facts by legal evidence. All that is required is that, the Assessing Officer should prima facie have some material on the basis of which there should be reason to believe of certain incomes chargeable to tax escaping assessment. There need not be any concrete evidence or proof available for coming to a final conclusion. It is only an initiation of proceedings of reassessment where the assessee gets a chance to put forth their defence, explanation and justification which would further be scrutinized by the Assessing Officer while reaching the final conclusion. One should not lose sight of the fact that the final assessment on the conclusion of proceedings under section 147 of the Act is also an appealable order wherein also the assessee has a right to agitate or challenge the order passed by the Assessing Officer on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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