TMI Blog2023 (2) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... rent from the record. Rectification order passed by the AO u/s. 155 of the Act as confirmed by the CIT(A) is invalid, liable to be quashed. Order of CIT(A) is not justified in confirming the order of AO passed u/s. 155 of the Act and it is set aside. Thus, the grounds raised by the assessee are allowed. Validity of reopening of assessment u/s 148 - HELD THAT:- No doubt the income of the husband and wife under any head of income except under the head salaries shall be apportioned equally between the husband and wife and the income so apportioned shall be included separately in the total income of the husband and of the wife respectively u/s. 5A of the Act which was inserted by the Finance Act, 1994 with retrospective effect from 01-04-1963. Admittedly, the scrutiny assessment u/s. 143(3) of the Act was completed in the case of assessee s husband and the AO required to apportion 50% from the total income determined in the case of assessee s husband to total income of the assessee. The said 50% income which was not included in the original assessment and also not taken into consideration in the original assessment, is to be termed as income which has escaped assessment with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeals)-1, Panaji [ CIT(A) ] for assessment years 2007-08 and 2009-10. 2. Since, the issues raised in both the appeals are similar basing on the same identical facts, I proceed to hear both the appeals together and to pass a consolidated order for the sake of convenience. 3. First, I shall take up appeal in ITA No. 64/PAN/2020 for A.Y. 2007-08. 4. The assessee raised two grounds of appeal amongst which the only issue emanates for my consideration is as to whether the CIT(A) justified in confirming the addition made by the AO u/s. 5A of the Act. 5. Heard both the parties and perused the material available on record. I note that the total income of the assessee was determined by the AO at Rs.1,04,566/- under intimation u/s. 143(1) of the Act. The said total income was rectified by adding an amount of Rs.6,87,582/- being 50% share from the assessee s spouse income vide order u/s. 155 of the Act. In challenge before the CIT(A), it was contended an order under intimation u/s. 143(1) of the Act can be modified by scrutiny proceedings u/s. 143(3) of the Act, further, no notice was issued to the assessee in passing the order u/s. 155 of the Act. The CIT(A) agreed with the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the record. Therefore, the rectification order passed by the AO u/s. 155 of the Act as confirmed by the CIT(A) is invalid, liable to be quashed. Therefore, the order of CIT(A) is not justified in confirming the order of AO passed u/s. 155 of the Act and it is set aside. Thus, the grounds raised by the assessee are allowed. 9. In the result, the appeal of assessee is allowed. Now, I shall take up ITA No. 65/PAN/2020, A.Y. 2009-10 10. Ground No. 1 raised by the assessee challenging the action of CIT(A) in concluding the assessment was subjected to proceedings u/s. 148 of the Act on valid grounds. 11. I note that the assessee filed return of income on 30-09-2009 and refund was granted through an intimation dated 21-03-2011. The time limit for completion of assessment is provided u/s. 153(1)(a) i.e. two years from the end of the assessment year in which the income was first assessable. The present assessment year is A.Y. 2009-10 i.e. 31-03-2010 and the time limit to complete assessment u/s. 143(3) or 144 of the Act is available up to 31-03-2012 i.e. after two years from the end of the assessment year in which the income was first assessable. The AO issued notice u/s. 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 5A of the Act which was inserted by the Finance Act, 1994 with retrospective effect from 01-04-1963. I note admittedly, the scrutiny assessment u/s. 143(3) of the Act was completed in the case of assessee s husband and the AO required to apportion 50% from the total income determined in the case of assessee s husband to total income of the assessee. The said 50% income which was not included in the original assessment and also not taken into consideration in the original assessment, in my opinion, is to be termed as income which has escaped assessment within the meaning of section 147 of the Act, such income cannot be brought to assessment and taxed except in accordance with the provisions thereof u/s. 147 of the Act. Thus, as discussed above, the AO by following the procedure contemplated u/s. 147 and 153 of the Act reopened the assessment concluded under intimation u/s. 143(1) of the Act and brought to tax in the hands of the assessee i.e. 50% share from the total income determined under scrutiny assessment proceedings in the case of assessee s spouse. Thus, the reopening of assessment made u/s. 143(3)/147 of the Act is valid and ground No. 1 raised by the assessee is dismisse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a nullity. The above submission does not find support from Income Tax Act, 1961 wherein section SA reads as under: 5A. Apportionment of income between spouses governed by Portuguese Civil Code.- (1) Where the husband and wife are governed by the system of community of property (known under the Portuguese Civil Code of 1860 as COMMUNIAO DOS BENS') in force in the State of Goa and in the Union territories of Dadra and Nagar haveli and Daman and Diu, the income of the husband and of the wife under any head of income shall not be assessed as that of such community of property (whether treated as an association of person's or a body of, individuals), but such income of the husband and of the wife under each head of income (other than under the head Salaries ) shall be apportioned equally between the husband and the wife and the income so apportioned shall be included separately in the total income of the husband and of the wife respectively, and the remaining provisions of this Act shall apply accordingly. (2) Where the husband or, as the case may be, the wife governed by the aforesaid system of community of property has any income under the head Salaries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue disclosure of material facts, and assessment u/ s. 143(1) is already completed. i) The argument that there was a full and true disclosure of material facts is not acceptable because the regular assessment is pending in your case. The term failure on the part of the assessee is not restricted only to the income-tax return but extends also to the assessment proceedings. If the assessee does not disclose or furnish to the AO complete and correct information and details it is required and under an obligation to disclose, there is a failure on its part (Honda Siel Power Products vs. DCIT followed). ii) The assessment u/ s. 143(1) is not an assessment, it is only the intimation of processing of the return of income filed. Clause III of your letter: I object to the reassessment. It is very vague statement, I object to the reassessment , when no reason is provided. From the above mentioned facts it is clear that there is no mistake on part of Assessing Officer for reopening of the case. Therefore, the OBJECTION FOR RE-OPENING THE ASSESSMENT for consideration of taxing the income by revoking section 147 is hereby dismissed. Further to state that the dismissa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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