TMI Blog2023 (10) TMI 1320X X X X Extracts X X X X X X X X Extracts X X X X ..... sing authority to pass a reassessment order both with respect to information that may have given rise to 'reason to believe', as also on other issues that may arise during the course of reassessment proceedings. Similarly, AO was not bound in law to bring to tax all income commensurate to the information/'reason to believe', recorded by him, to assume jurisdiction. It was always open in law (for the assessing authority), to drop whole or any part of such allegations of escapement of income (drawn at the initial stage). Even under the amended law, no change has been brought as may compel the assessing authority to subject an assessee to tax on entire information giving rise to reassessment proceedings. In short, even after the amendment made to the Act, the issue as to assumption of jurisdiction and passing of assessment order in exercise of that order remain two separate and largely independent exercise. While no reassessment order may be passed unless jurisdiction is shown to have been validly assumed, reassessment order giving rise to tax liability is not sine qua non of valid assumption of jurisdiction. The fact that in the present case, the assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he earlier order passed under Section 148A(d) of the Act, dated 31.7.2022 and the consequent notice issued on that date. 3. Submission of learned counsel for the petitioner is, the very initiation of the reassessment proceedings was bad. The Assessment Year in question is 2013- 2014. Three years from the end of that Assessment Year expired on 31.3.2017. By virtue of mandatory provisions of Section 149 of the Act read with relevant Circular of the CBDT, no reassessment proceedings may have been initiated against the petitioner after 31.3.2017 if the component of income alleged to have escaped assessment was less than 50 Lakhs. 4. In the present case, relying on the view now expressed by the assessing authority contained in its final show cause notice dated 12.5.2023, it has been vehemently urged, the objection raised by the petitioner at the initial stage that there was no second transaction of Rs. 27 lakhs and that there was only one transaction of Rs. 27 lakhs alleged to have escaped assessment has been found true. The reassessment proceedings may not have been initiated at all since the quantum of escapement was only Rs. 27 lakhs i.e. well below the statutory limit of Rs. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 27 lakhs relied against the petitioner was either non-existent or that explanation furnished by the assessee is wholly acceptable. On the strength of this submission, it has been asserted the Court may not interfere in exercise of its discretionary equitable jurisdiction under Article 226 of the Constitution of India as prima facie, information and satisfaction (arising therefrom), of escapement of income exists with respect to that amount. 9. Having heard learned counsel for parties and having perused the record, in the first place, under the amended law, the assessing authority draws power to reassess the assessee, from Section 147 of the Act, if any income chargeable to tax in the case of that assessee escapes assessment. That power has been made subject to provisions of Section 148 to 153 of the Act. By virtue of Section 148 of the amended law, reassessment notice may be issued under that provision subject to compliance of Section 148A of the Act, whereafter he may serve the jurisdictional notice. 10. Section 148A is a new provision. Earlier, under the unamended law, by virtue of decision of the Supreme Court in GKN Driveshafts (India) Ltd Vs. Income Tax Officer, 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of search, Shri Pradeep Kumar Jindal had confirmed the two entry of Rs. 27,00,000/- dated 10.04.2012 and Rs. 27,00,000/- dated 04.10.2012 were provided to the assessee company through JAR Metal Industries Pvt. Ltd. It is appear that the another receipt amount of Rs. 27,00,000/- dated 10.04.2012 was received in unaccounted bank account and M/S JAR Metal Industries Pvt. Ltd also transfer this amount from unaccounted bank account. Therefore, in this regard, necessary verification is to be need and it should be investigated during the course of assessment proceedings u/s 147 of the Act. 6.5 Bank statement of JAR Metal Industries Pvt. Ltd has not enclosed with this information as the various numbers of entities involved in this matter and it is not possible to each every entity's bank statement enclosed with the information. 6.6 As per information, value of the total accommodation entries were Rs 54,00,000/ and the escaped amount is above Rs. 50,00,000/-. As per as per Instruction No. 01/2022 dated 11.05.2022 of CBDT, this case is not time barred. 6.7 As per material which provided to the assessee, two entry of Rs. 27,00,000/- dated 10.04.2012 and Rs. 27,00,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay compel the assessing authority to subject an assessee to tax on entire information giving rise to reassessment proceedings. In short, even after the amendment made to the Act, the issue as to assumption of jurisdiction and passing of assessment order in exercise of that order remain two separate and largely independent exercise. While no reassessment order may be passed unless jurisdiction is shown to have been validly assumed, reassessment order giving rise to tax liability is not sine qua non of valid assumption of jurisdiction. 18. The fact that in the present case, the assessing authority has reconsidered his position and now reached a conclusion that there exists only one accommodation entry of Rs. 27 lakhs and not two such entries, may only impact the quantum of reassessment order to be made. 19. Insofar as at the stage of assumption of jurisdiction, the assessing authority had taken note of two entries that too after issuing due notice to the petitioner and passing an order under Section 148A(d), establishes due compliance of the procedure. The fact that such tentative conclusion recorded at that stage may not be found to be correct in entirety, and the fact only ..... X X X X Extracts X X X X X X X X Extracts X X X X
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