Search Results For: Reassessment


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DATE: February 18, 2020 (Date of pronouncement)
DATE: May 7, 2020 (Date of publication)
AY: 2012-13
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CITATION:
S. 147/ 148: A mere bald assertion by the AO that the assessee has not disclosed fully and truly all the material facts is not sufficient. The AO has to give details as to which fact or the material was not disclosed by the assessee, leading to its income escaping assessment. Otherwise, the reopening is not valid (Imp judgements referred)

The decision in Calcutta Discount Co. Ltd in fact, assists the case of the Petitioner rather than the Respondents. In this decision, the Hon’ble Supreme Court has held that it is the duty of the assessee to disclose fully and truly all primary relevant facts and once all primary facts are before the assessing authority, he requires no further assistance by way of disclosure and it is for him to decide what inference of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. However, if there are some reasonable grounds for thinking that there had been underassessment as regards any primary facts which could have a material bearing on question of under-assessment, that would be sufficient to give jurisdiction to the ITO to issue notice for reassessment.

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DATE: February 13, 2020 (Date of pronouncement)
DATE: February 22, 2020 (Date of publication)
AY: 2012-13
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CITATION:
S. 147 Reopening for Bogus Share Capital u/s 68: The parent co does not have sufficient funds to invest such huge amounts in Indian subsidiaries. The funds are routed through a web of entities spread across various jurisdictions, mostly in tax havens. The investments so made, are required to be investigated and the credit worthiness of the investing company is in jeopardy, in view of the information received from the investigation wing. This exercise can be undertaken during the re-reassessment proceedings to finally determine if the amounts represent undisclosed income of the assessee which is required to be taxed in its hands. At the stage of re-opening, only a reason to believe should exist with regard to escapement of income. Definite conclusion would be drawn after raising queries upon the assessee in the light of s. 68 of the Act (All imp verdicts referred)

Whilst it is the settled position in law that the sanctioning authority is required to apply his mind and the grant of approval must not be made in a mechanical manner, however, as noted by the Division Bench of the Calcutta High Court in Prem Chand Shaw (Jaiswal) v Assistant Commissioner, Circle-38, Kolkata [2016] 67 taxmann.com 339 (Calcutta), the mere fact that the sanctioning authority did not record his satisfaction in so many words would not render invalid the sanction granted under section 151(2) when the reasons on the basis on the basis of which sanction was sought could not be assailed and even an appellate authority is not required to give reasons when it agrees with the finding unless statute or rules so requires

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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: 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: 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: 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

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DATE: June 25, 2019 (Date of pronouncement)
DATE: July 3, 2019 (Date of publication)
AY: 2011-12
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CITATION:
S. 147/ 148: Even in a case where the return is accepted u/s 143(1) without scrutiny, the fundamental requirement of income chargeable to tax having escaped assessment must be satisfied. Mere non-disclosure of receipt would not automatically imply escapement of income chargeable to tax from assessment. There has to be something beyond an unintentional oversight or error on the part of the assessee in not disclosing such receipt in the return of income. In other words, even after non-disclosure, if the documents on record conclusively establish that the receipt did not give rise to any taxable income, it would not be open for the AO to reopen the assessment referring only to the non disclosure of the receipt in the return of income. The attempt of further verification would amount to rowing inquiry

Despite such difference in the scheme between a return which is accepted under section 143(1) of the Act as compared to a return of which scrutiny assessment under section 143(3) of the Act is framed, the basic requirement of section 147 of the Act that the Assessing Officer has reason to believe that income chargeable to 3 (2013) 356 ITR 481 (Guj) OS WP 1230-19.doc tax has escaped assessment is not done away with. Section 147 of the Act permits the Assessing Officer to assess, reassess the income or recompute the loss or depreciation if he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. This power to reopen assessment is available in either case, namely, while a return has been either accepted under section 143(1) of the Act or a scrutiny assessment has been framed under section 143(3) of the Act. A common requirement in both of cases is that the Assessing Officer should have reason to believe that any income chargeable to tax has escaped assessment

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DATE: October 3, 2018 (Date of pronouncement)
DATE: October 18, 2018 (Date of publication)
AY: 2010-11
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CITATION:
S. 148: A notice u/s 143(2) issued by the AO before the assessee files a return of income has no meaning. If no fresh notice is issued after the assessee files a return, the AO has no jurisdiction to pass the reassessment order and the same has to be quashed

In view of consistent view of jurisdictional High Court and Delhi High Court, in the absence of pending return of income, the provisions of section 143(2) of the Act is clear that notice can be issued only when a valid return is pending for assessment. Accordingly, this notice has no meaning