Search Results For: 147


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DATE: November 28, 2019 (Date of pronouncement)
DATE: January 11, 2020 (Date of publication)
AY: 2012-13, 2013-14
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CITATION:
S. 147/148: If the AO has failed to perform his statutory duty, he cannot review his decision and reopen on a change of opinion. Reopening is not an empty formality. There has to be relevant tangible material for the AO to come to the conclusion that there is escapement of income and there must be a live link with such material for the formation of the belief. Merely using the expression “failure on the part of the assessee to disclose fully and truly all material facts” is not enough. The reasons must specify as to what is the nature of default or failure on the part of the assessee

Though, the recorded reasons allude to an ostensible failure on the part of the Assessee to disclose fully and truly all material facts, however, the recorded reasons except for using the expression “failure on the part of the Assessee to disclose fully and truly all material facts”, do not specify as to what is the nature of default or failure on the part of the Assessee. The reasons also do not explain or specify as to what is the rationale connection between the reasons to believe and the material on record

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DATE: December 23, 2019 (Date of pronouncement)
DATE: January 11, 2020 (Date of publication)
AY: 2013-14
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CITATION:
S. 147 vs. S. 263: If the AO has incorrectly or erroneously applied law and income chargeable to tax has escaped assessment, the Revenue should resort to s. 263 and revise the assessment and not reopen u/s 147. When matter was referred to the CIT for seeking approval, instead of holding that the matter falls u/s 263 and not u/s 148, has given approval u/s 151 which shows non-application of mind and mechanical grant of approval. Therefore, the assumption of jurisdiction u/s 147 cannot be sustained and is held as invalid in eyes of law

In such a situation, where the Assessing officer has incorrectly or erroneously applied law and income chargeable to tax has escaped assessment, the Revenue is not without remedy and resort to provisions of section 263 could have been made by the ld CIT. In fact, the revisionary jurisdiction u/s 263 is meant to deal with such type of cases where the ld CIT can step-in and correct the Assessing officer. In the instant case, the original assessment proceedings were completed vide order u/s 143(3) dated 29.02.2016 and therefore, the provisions of section 263 could have been invoked by the ld CIT by 31.03.2018. However, instead of invoking the revisionary jurisdiction u/s 263 by ld. CIT, the Assessing officer has assumed the jurisdiction u/s 147 of the Act by issuance of notice dated 28.02.2017. Interestingly, for such assumption of jurisdiction, the ld CIT has accorded the approval u/s 151 of the Act. It is therefore a case where matter was referred to the ld CIT for seeking his approval and the ld CIT instead of holding that the matter falls under section 263 and not under section 148 has given the approval u/s 151 of the Act which shows non-application of mind and mechanical grant of approval

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DATE: October 23, 2019 (Date of pronouncement)
DATE: December 28, 2019 (Date of publication)
AY: 2012-13
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CITATION:
S. 147 Reopening for taxing bogus share application money: One is known by the company one keeps. As the investors have dubious character & are known to have engaged in the business of providing accommodation entries., the genuineness of their transactions with the assessee has come under serious cloud, giving rise to reasonable belief in the mind of the AO that the assessee may have indulged in a dubious transaction to launder its undisclosed income. The fact that the assessee produced evidence during assessment is neither here nor there (NRA Iron & Steel 412 ITR 161 (SC) followed). Costs of Rs. 2L imposed on assessee for wasting Court's time

It is true that during the course of the assessment proceedings, the Assessing Officer had required the assessee to disclose information pertaining to the share applicants, the amounts and their source, the mode in which payment was made and confirmatory letters together with PAN details. But it is also trite law that for such cases three important aspects have to be considered by the Assessing Officer, namely (i) the identity of the investors; (ii) the credit worthiness of the applicants; and (iii) the genuineness of the transaction. Ex-facie, the order of assessment which was passed by the Assessing Officer under Section 143(3) does not indicate that the Assessing Officer had brought his mind to bear on either of these aspects

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DATE: December 12, 2019 (Date of pronouncement)
DATE: December 21, 2019 (Date of publication)
AY: 2012-13
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CITATION:
S. 147 reopening for bogus purchases & accommodation entries: The omission of the AO to make an assertion in the reasons that there was a failure to disclose fully and truly all material facts necessary for the assessment is sufficient to set aside the reassessment notice. Also, a notice issued on change of opinion is bad

The reasons also refer to a decision of the Supreme Court in the case of M/s.N.K.Proteins Ltd. (2017-TIOL-23-SC-IT v. DCIT ). Even this decision was before the Assessing Officer in the proceeding pursuant to first reopening notice. The Petitioner, along with its objections, placed explanatory note as to how the said decision of the Supreme Court in M/s.N.K.Proteins did not apply to the facts of the case. Therefore, this aspect was also considered when the proceeding under the first reopening notice was conducted

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DATE: November 11, 2019 (Date of pronouncement)
DATE: December 7, 2019 (Date of publication)
AY: 2008-09
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CITATION:
S. 147/ 151: As the Act provides for sanction by the JCIT, the sanction by the CIT does not meet the requirement of the Act and the reopening notice is without jurisdiction. The fact that the sanction is granted by a superior officer is not relevant

The reopening proceedings under section 148 are bad as necessary sanction/approval had not been obtained in terms of section 151 of the Act. The impugned order of the Tribunal records that the sanction for issuing the impugned notice had been obtained from the Commissioner of Income Tax when, in terms of section 151, the sanction had to be obtained from the Joint Commissioner of Income Tax. Thus, in the absence of sanction/approval being obtained from the appropriate authority as mandated by the Act, the Tribunal held that the reopening notice itself is without jurisdiction

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DATE: December 2, 2019 (Date of pronouncement)
DATE: December 7, 2019 (Date of publication)
AY: 2009-10
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CITATION:
S. 147 Reopening of Bogus share capital/ premium: If the PCIT, while granting approval for issue of notice u/s. 148, has only mentioned “YES”, it establishes that the approving authority has given approval to the reopening of assessment in a mechanical manner without due application of mind. On this count the reassessment is not sustainable in the eyes of law and needs to be quashed (All imp judgements referred)

The Ld. Pr. Commissioner of Income Tax, Delhi-2, New Delhi while granting approval for issue of notice u/s. 148 of the Act in Column no. 12 has only mentioned that “YES”, which establish that the approving authority has given approval to the reopening of assessment in a mechanical manner without due application of mind and therefore, on this account the reassessment is not sustainable in the eyes of law and needs to be 6 quashed.

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DATE: October 11, 2019 (Date of pronouncement)
DATE: October 26, 2019 (Date of publication)
AY: 2007-08
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CITATION:
S. 147/ 154: The AO cannot, after conclusion of proceedings u/s 147, take aid of Explanation 3 to S. 147 to make any addition u/s 154. If the Dept's argument is accepted that u/s 154 the AO is empowered to deal with escapement of income even after the s. 147 assessment is completed, it would empower the AO to go on making one addition after the other by taking shelter of Explanation 3 to S. 147 endlessly. Such a course is not permissible

If we accept the argument of the learned DR that u/s 154 of the Act, ld. AO is empowered to deal with the escapement of income in respect of which the reasons were not recorded even after the assessment reopened under section 147 of the Act is completed, it would empower the ld. AO to go on making one addition after the other by taking shelter of Explanation 3 to Section 147 endlessly. Such a course is not permissible. Power that is available to the ld.AO under Explanation 3 to Section 147 of the Act, in our considered opinion, is not available to him u/s 154 of the Act, which obviously came to be exercised by the ld. AO after the conclusion of the proceedings u/s 147 of the Act

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DATE: August 30, 2019 (Date of pronouncement)
DATE: September 14, 2019 (Date of publication)
AY: 1997-98
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CITATION:
S. 147/148: It is mandatory for the AO to follow the procedure laid down in GKN Driveshafts 259 ITR 19 (SC) and to pass a separate order to deal with the objections. The disposal of the objections in the assessment order is not sufficient compliance with the procedure. The failure to follow the procedure renders the assumption of jurisdiction by the Assessing Officer ultra vires (Bayer Material Science 382 ITR 333 (Bom) & KSS Petron (Bom) followed)

The moot question is, therefore, the disposal of the objections by the Assessing Officer in his assessment order dated 26th March, 2004 constitutes sufficient compliance with the procedure prescribed by the Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd. (supra) or, whether it was necessary for the Assessing Officer to have first disposed of the Appellant’s objections by passing a speaking order and only upon communication of the same to the Appellants, proceeded to reopen the assessment

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DATE: April 9, 2019 (Date of pronouncement)
DATE: September 7, 2019 (Date of publication)
AY: 2011-12
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CITATION:
S. 147/148/292B: The officer recording the reasons u/s 148(2) for reopening the assessment & the officer issuing notice u/s 148(1) has to be the same person. If the reasons are recorded by the DCIT but the notice is issued by the ITO, the reassessment proceedings are invalid. The s. 148 notice is a jurisdictional notice. Any inherent defect therein cannot be cured u/s 292B. The fact that the assessee participated in the proceedings is irrelevant

Since the notice under section 148 of the Act is a jurisdictional notice, any inherent defect therein cannot be cured under section 292B of the Act. A notice under section 148(1) of the Act would be a valid notice if the jurisdictional Assessing Officer records the reasons for reopening the assessment as contemplated under subsection (2) of section 148 and thereafter the same officer namely the jurisdictional Assessing Officer issues the notice under section 148(1) of the Act.

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DATE: July 16, 2019 (Date of pronouncement)
DATE: August 31, 2019 (Date of publication)
AY: -
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CITATION:
S. 148, 282, Rule 127: Mere issue of a s. 148 notice is not sufficient. Service is essential. If the postal authorities return the notice unserved, the Dept has to serve under Rule 127(2) using one of the four sources of address (such as PAN address, Bank address etc). The failure to do so renders the reassessment proceedings invalid (All imp judgements referred)

In terms of Rule 127 and in particular, sub-rule (2) therefore, having regard to the further proviso therein, the Department had to deliver the notice of reassessment at the petitioner’s address given by her to the bank where her account was maitnained. No such steps were taken. Service of notice, therefore, was not complete. In absence of service of notice before the last date envisaged under section 149 of the Act for such purpose, the Assessing Officer could not have proceeded further with the reassessment proceedings