Search Results For: 148


KSS Petron Private Ltd vs. ACIT (Bombay High Court)

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DATE: October 3, 2016 (Date of pronouncement)
DATE: July 20, 2017 (Date of publication)
AY: 2003-04
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CITATION:
S. 147: If the AO does not follow the law laid down in GKN Driveshafts 259 ITR 19, the reopening proceedings have to be quashed. There is no reason to restore the issue to the AO to pass a further/fresh order because it would give a licence to the AO to pass orders on reopening notice, without jurisdiction (without compliance of the law in accordance with the procedure), yet the only consequence, would be that in appeal, it would be restored to the AO for fresh adjudication after following the due procedure. This would lead to unnecessary harassment of the assessee by reviving stale/ old matters

Once the impugned order finds the Assessment Order is without jurisdiction as the law laid down by the Apex Court in GKN Driveshafts (India) Ltd., v/s. ITO 259 ITR 19 has not been followed, then there is no reason to restore the issue to the Assessing Officer to pass a further/fresh order. If this is permitted, it would give a licence to the Assessing Officer to pass orders on reopening notice, without jurisdiction (without compliance of the law in accordance with the procedure), yet the only consequence, would be that in appeal, it would be restored to the Assessing Officer for fresh adjudication after following the due procedure. This would lead to unnecessary harassment of the Assessee by reviving stale/ old matters

Posted in All Judgements, High Court

Radhaswami Salt Works vs. ACIT (Gujarat High Court)

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DATE: June 14, 2017 (Date of pronouncement)
DATE: July 6, 2017 (Date of publication)
AY: 2010-11
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CITATION:
S. 147: If the subject matter of the reopening is also the subject matter of appeal, the principle of merger would apply. There cannot be two separate considerations to the same subject matter relatable to the income, one by the appellate authority and another by the AO in fresh assessment. Scope of third proviso to s. 147 explained

Section 147 of the Act as is well known, empowers the Assessing Officer to reopen the assessment, subject to certain conditions. 3rd proviso to section 147 however provides that the Assessing Officer may assess or reassess such income other than the income involving the matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. When the subject matter viz. the receipt of transfer of rights in land and the income relatable to such matter was the subject matter of appeal and thereafter second appeal, the principle of merger would apply. There cannot be two separate considerations to the same subject matter relatable to the income. One by the appellate authority or forum and another by the Assessing Officer in fresh assessment

Posted in All Judgements, High Court

Mehsana District Central Co-op Bank Ltd vs. ACIT (Gujarat High Court)

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DATE: June 19, 2017 (Date of pronouncement)
DATE: June 27, 2017 (Date of publication)
AY: 2007-08
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CITATION:
S. 147/148: Law on validity of reopening of assessment when the AO is acting on the dictates of the audit party and is not applying his own mind explained

Nevertheless, if we see entire sequence, it becomes clear that the Assessing Officer was clearly acting under the dictates of the audit party. Even after issuing the notice, he still maintained an opinion that no income chargeable to tax had escaped assessment. If that be so, he ought to have dropped the assessment proceedings, at least at that stage when the petitioner raised the objections which even without such objections, the Assessing Officer was convinced, were valid

Posted in All Judgements, High Court

Crescent Construction Co vs. ACIT (ITAT Mumbai)

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DATE: May 26, 2017 (Date of pronouncement)
DATE: June 15, 2017 (Date of publication)
AY: 2005-06
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CITATION:
S. 147/ 148: Entire law on reopening of assessments in the context of "change of opinion" vs. "failure to apply mind", with reference to s. 114 of the Indian Evidence Act, 1872 and all judgements on the point discussed

Section 114 of the Evidence Act, 1872, is permissive and not a mandatory provision. Nine situations by way of illustrations are stated, which are by way of example or guidelines. As a permissive provision it enables to judge to support his judgment but there is no scope of presumption when facts are known. Presumption of facts under section 114 is rebuttable. The presumption raised under illustration (e) to section 114 of the Act means that when an official act is proved to have been done, it will be presumed to have been regularly done but it does not raise any presumption that an act was done for which there is no evidence or proof

Posted in All Judgements, Tribunal

DIT vs. Rolls Royce Industrial Power India Ltd (Delhi High Court)

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DATE: May 18, 2017 (Date of pronouncement)
DATE: May 27, 2017 (Date of publication)
AY: 1998-99, 1999-00, 2001-02
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CITATION:
S. 147/148 reassessment has to be based on "fresh material". A reopening based on reappraisal of existing material is invalid. The assessee's duty is only to disclose facts and not to make inferences. Consolidated Photo 281 ITR 394 (Del) is not good law

The reopening was not based on any fresh material. By revisiting the same materials the successor AO now concluded that the payments received by the Assessee pursuant to the O&M Agreements should be treated as FTS. In the circumstances, the view taken by a successor AO on the same material was indeed nothing but a mere change of opinion. It is a well-settled legal proposition, as explained in Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191(SC) that once an Assessee has discharged the burden of not only producing the account books and other documents, but also the specific material relevant to the assessment, “it is for the Income-tax Officer to draw the proper inferences of fact and law therefrom and the Assessee cannot further be called upon to do so for him.” In Indian Oil Corporation v. ITO [1986] 159 ITR 956 the Court pertinently observed “it is for the taxing authority to draw inference. It is not necessary for the Assessee to draw inference.” These observations apply on all fours to the case on hand

Posted in All Judgements, High Court

Rajendra Goud Chepur vs. ITO (AP & T High Court)

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DATE: February 13, 2017 (Date of pronouncement)
DATE: April 10, 2017 (Date of publication)
AY: -
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CITATION:
Though Explanation 2 of s. 147 authorizes the AO to reopen an assessment wherever there is an "understatement of income", the AO is not entitled to assume that there is "understatement of income" merely because the assessee's income is "shockingly low" and others in the same line of business are returning a higher income. The invocation of the jurisdiction u/s 147 on the basis of suspicions and presumptions cannot be sustained

Without any concrete facts, reopening cannot be ordered merely on the presumption that the returned income is very shockingly lower than the total gross receipts. Therefore, we are of the considered view that the Assessing Officers completely erred in reopening assessments on the basis of either a suspicion that there is suppression of income or on the basis that persons in the same line of business are returning a higher income. Without even mentioning the comparables, no initiation of proceedings under Section 147 can be made

Posted in All Judgements, High Court

Teena Gupta vs. CIT (Allahabad High Court)

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DATE: March 30, 2017 (Date of pronouncement)
DATE: April 8, 2017 (Date of publication)
AY: 1997-98
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CITATION:
A question relating to jurisdiction which goes to the root of the matter can always be raised at any stage. Issues relating to initiation of s. 147 proceedings and/or service of notice are questions relating to assumption of jurisdiction. If an issue has not been decided in appeal and has simply been remanded, the same can be raised again notwithstanding with the fact that no further appeal has been preferred (Sun Engineering Works 198 ITR 297 (SC) explained)

The principles laid down by the Apex Court in the case of Sun Engineering Works P. Ltd. [1992] 198 ITR 297 (SC) would not apply as the appellant is not claiming any deduction or relief on the taxibility of any item in the reopened assessment proceedings which had not been claimed in the original assessment

Posted in All Judgements, High Court

Larsen & Toubro Ltd vs. State of Jharkhand (Supreme Court)

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DATE: March 21, 2017 (Date of pronouncement)
DATE: March 22, 2017 (Date of publication)
AY: -
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CITATION:
S. 147: Entire law on reopening of assessments pursuant to audit objections explained in the context of the corresponding provisions of the Bihar Finance Act. If the AO disagrees with the information/ objection of the audit party and is not personally satisfied that income has escaped assessment but still reopens the assessment on the direction issued by the audit party, the reassessment proceedings are without jurisdiction

There are a catena of judgments of this Court holding that assessment proceedings can be reopened if the audit objection points out the factual information already available in the records and that it was overlooked or not taken into consideration. Similarly, if audit points out some information or facts available outside the record or any arithmetical mistake, assessment can be re-opened. The contention whether finding the information from the very facts that were already available on record amounts to information for the purpose of Section 19 of the State Act, it would be sufficient to refer to a judgment of this Court in Anandjiharidas & Co. vs. S.P. Kasture AIR 1968 SC 565 wherein it was held that a fact which was already there in records doesn’t by its mere availability becomes an item of “information” till the time it has been brought to the notice of assessing authority. Hence, the audit objections were well within the parameters of being construed as ‘information’ for the purpose of section 19 of the State Act

Posted in All Judgements, Supreme Court

Jeans Knit Private Limited vs. DCIT (Supreme Court)

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DATE: December 8, 2016 (Date of pronouncement)
DATE: December 19, 2016 (Date of publication)
AY: -
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CITATION:
S. 147/ 148: A Writ Petition to challenge the issue of a reopening notice u/s 148 is maintainable as per the law laid down in Calcutta Discount 41 ITR 191 (SC). The law laid down in Chhabil Dass Agarwal 357 ITR 357 (SC) deals with the maintainability of a Writ to challenge the reassessment order and does not apply to a challenge to the reassessment notice

The High Courts dismissed the writ petitions preferred by the assessee challenging the issuance of notice under Section 148 of the Income Tax Act, 1961 and the reasons which were recorded by the Assessing Officer for reopening the assessment. The writ petitions were dismissed by the High Courts as not maintainable. The aforesaid view taken is contrary to the law laid down by this Court in Calcutta Discount Limited Company vs. Incom Tax Officer, Companies District I, Calcutta & Anr. [(1961) 41 ITR 191 (SC)]

Posted in All Judgements, Supreme Court

Torm Shipping India Pvt Ltd vs. ITO (ITAT Mumbai)

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DATE: October 14, 2016 (Date of pronouncement)
DATE: December 12, 2016 (Date of publication)
AY: 2006-07, 2007-08
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CITATION:
S. 147 reopening opens a "Pandora's box" and cannot be done in a casual manner. The reasons cannot be based on mere doubts or with a view to verify basic facts. If the AO takes the view that the income referred to in the reasons has not escaped assessment, he loses jurisdiction to assess other escaped income that comes to his notice during reassessment

The Reasons have been recorded on the basis of mere doubts. There were no bases with the AO to allege that too with the support of any cogent material that impugned income was not included by the assessee in its income offered to tax. Reopening of an assessment is not permitted merely on the basis of some notions or presumptions. Nor it is allowed merely for making verification of some basic facts. There must be existence of some tangible material indicating escapement of income. Then only, an AO is permitted to resort to provisions of reopening contained in sections 147 to 151 of the Act. Because, once an assessment is reopened on valid basis, entire pandara’s box is open before the AO. Therefore the AO may then bring to tax not only income escaped from tax which was mentioned in the Reasons recorded, but also any other escaped income that may come to his notice during the course of reassessment proceedings. Reopening of an assessment attacks and pierces the concept of finality of litigation. Therefore, an invalid reopening done in the casual manner and without following parameters of law may cause undue hardship to the taxpayers

Posted in All Judgements, Tribunal