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DATE: January 27, 2016 (Date of pronouncement)
DATE: March 3, 2016 (Date of publication)
AY: 2007-08
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CITATION:
S. 147/ 148: Providing the assessee with the recorded reasons towards the end of the limitation period and passing a reassessment order without dealing with the objections results in gross harassment to the assessee which the Pr. CIT should note & remedy

The Principal Commissioner of Income Tax would take serious note of the above and after examining the facts, if necessary, take appropriate remedial action to ensure that an assessee is not made to suffer for no fault on its part. This is particularly so as almost the entire period of two years from the end of the financial year in which the notice is issued was consumed by the Assessing Officer in failing to give reasons recorded in support of the impugned notice. Nevertheless, the Assessing Officer proceeds to pass a draft Assessment order without dealing with the objections filed by the Petitioner. We could have on that date or even earlier passed an order setting aside the draft assessment order dated 30th March 2015 as it was passed without disposing of the objections. Thus, clearly without jurisdiction. However, we were of the view that although this appears to be a gross case of harassing an Assessee, the Principal Commissioner would take note and adopt remedial action / proceedings

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DATE: October 28, 2015 (Date of pronouncement)
DATE: February 23, 2016 (Date of publication)
AY: 2005-06
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CITATION:
S. 147: Reopening of assessment is not permissible in the absence of "fresh tangible material". Entire law on the subject reiterated

In the present case, it was noticed by us that the case of the assesse is that there was no fresh tangible material in the possession of AO at the time of recording of impugned reasons. A perusal of the ‘Reasons’ recorded by the AO in this case reveals that at the time of recording of these ‘Reasons’ the AO had examined original assessment records only and no fresh material had come in the possession of the AO. In response to our specific query also, Ld DR could not point out any fresh material available with the AO at the time of reopening of the case of the assessee. Thus, assertion of the assessee that there was no fresh material with AO for reopening of this case, remained uncontroverted

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DATE: February 10, 2016 (Date of pronouncement)
DATE: February 22, 2016 (Date of publication)
AY: 2010-11
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CITATION:
S. 147: Law laid down in DCIT vs. Zuari Estate Development and Investment Co 373 ITR 661 does not mean that in cases where no assessment order is passed and assessment is completed by Intimation u/s 143(1), the sine qua non to show that there is "reason to believe that income chargeable to tax has escaped assessment" is not required. It is open to the assessee to challenge a notice issued u/s 148 as being without jurisdiction for absence of reason to believe even in case where the assessment has been completed earlier by Intimation u/s 143(1) of the Act

It is settled position in law that the decision of the Court has to be read in the context of the facts involved therein and not on the basis of what logically flows therefrom as held by the Supreme Court in Ambica Quarry Works Vs. State of Gujarat, 1987(1) SCC 213. The Apex Court in Zuari Estate Development and Investment Co. Ltd. (Supra)not having dealt with the issue of reason to believe that income chargeable to tax has escaped assessment on the part of the Assessing Officer in cases where regular assessment was completed by Intimation under Section 143(1) of the Act, it would not be wise for us to infer that the Supreme Court in Zuari Estate Development and Investment Co. Ltd. (Supra) has held that the condition precedent for the issue of reopening notice namely, reason to believe that income chargeable to tax has escaped assessment, has no application where the assessment has been completed by Intimation under Section 143(1) of the Act. The law on this point has been expressly laid down by the Apex Court in the case of Rajesh Jhaveri Stock Brokers P. Ltd. (Supra) and the same would continue to apply and be binding upon us. Thus, even in cases where no assessment order is passed and assessment is completed by Intimation under Section 143(1) of the Act, the sine qua non to issue a reopening notice is reason to believe that income chargeable to tax has escaped assessment. In the above view, it is open for the petitioner to challenge a notice issued under Section 148 of the Act as being without jurisdiction for absence of reason to believe even in case where the Assessment has been completed earlier by Intimation under Section 143(1) of the Act

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DATE: February 18, 2016 (Date of pronouncement)
DATE: February 22, 2016 (Date of publication)
AY: 2007-08 to 2012-13
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CITATION:
S. 147: The reopening of the assessment is not valid if the reasons recorded are incoherent and do not indicate what the basis for reopening is

A plain reading of the reasons recorded for reopening reveals that the reasons are totally incoherent. In fact, a plain reading of it gives rise to doubts whether some lines have gone missing or some punctuation marks have been left out. Grammatically also the reasons recorded make little sense. However, this is the least of the problems. Essentially, the reasons recorded do not indicate what the basis for the reopening of the assessments is

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DATE: April 17, 2015 (Date of pronouncement)
DATE: November 26, 2015 (Date of publication)
AY: 1991-92
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CITATION:
S. 143(1)/ 147: As a s. 143(1) intimation is not an assessment, there is no question of "change of opinion" by the AO

Can it be said that any “assessment” is done by them? The reply is an emphatic “no”. The intimation under Section 143(1)(a) was deemed to be a notice of demand under Section 156, for the apparent purpose of making machinery provisions relating to recovery of tax applicable. By such application only recovery indicated to be payable in the intimation became permissible. And nothing more can be inferred from the deeming provision. Therefore, there being no assessment under Section 143(1)(a), the question of change of opinion, as contended, does not arise

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DATE: October 28, 2015 (Date of pronouncement)
DATE: November 20, 2015 (Date of publication)
AY: 2006-07
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CITATION:
S. 147: Reopening solely on the basis of information received from another AO that the assessee has booked bogus bills but without independent application of mind to the information renders the reopening void

At the time of recording of the reasons the Assessing Officer apparently was not having any idea about the nature of the transactions entered into by the assessee. In the reasons recorded there is no mention about the nature of the transactions. As per provision of section 147 the reasons to believe has to be that of the Assessing Officer and further there have to be application of mind by the Assessing Officer. The Assessing Officer was also not aware of the nature of the accommodation entries. In the reasons recorded he has simply mentioned the names of the party and the amount and nowhere has stated the nature of such entry. This also shows that the Assessing Officer has made no effort to look into the return of the assessee which was available with him

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DATE: October 28, 2015 (Date of pronouncement)
DATE: November 20, 2015 (Date of publication)
AY: 2001-02
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CITATION:
S. 147/ 148: Issue of furnishing the ‘Reasons’ for reopening the assessment goes to the root of the matter. In the event of failure of the AO to furnish the reasons, the reopening is bad in law

The undisputed facts are that, one – no ‘Reasons’ are available in the assessment record, and two there is nothing on record to show that certified copy of verbatim ‘Reasons’ was ever provided to the assessee, despite the request made by the assessee before AO, more than once. It clearly indicates that no ‘Reasons’ were recorded infact and therefore, these could not have been provided to the assessee. Had the ‘Reasons’ been recorded by AO, these would have definitely been provided to the assessee. The position of law is clear. It has been held by Hon’ble Supreme Court in the case of GKN Driveshaft 259 ITR 19, that it is mandatory on the part of the AO to provide the copy of the reasons to the assessee and to meet the objections filed by the assessee thereto, if any, before the AO can frame the reassessment order. It is further noted that Hon’ble Bombay High Court in the case of CIT v. Videsh Sanchar Nigam Ltd. (2012) 340 ITR 66 (Bom.), has held that in case reasons are not furnished by the AO to the assessee, before completion of reassessment proceedings, reassessment order cannot be upheld

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DATE: October 12, 2015 (Date of pronouncement)
DATE: November 5, 2015 (Date of publication)
AY: 2002-03
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CITATION:
S. 147/ 148: Dept warned not to harass taxpayers by reopening assessments in a mechanical and casual manner. Pr CIT directed to issue instructions to AOs to strictly adhere to the law explained in various decisions and make it mandatory for them to ensure that an order for reopening of an assessment clearly records compliance with each of the legal requirements. AOs also directed to strictly comply with the law laid down in GKN Driveshafts 259 ITR 19 (SC) as regards disposal of objections to reopening assessment

The Court is of the view that notwithstanding several decisions of the Supreme Court as well as this Court clearly enunciating the legal position under Section 147/148 of the Act, the reopening of assessment in cases like the one on hand give the impression that reopening of assessment is being done mechanically and casually resulting in unnecessary harassment of the Assessee

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DATE: August 14, 2015 (Date of pronouncement)
DATE: November 4, 2015 (Date of publication)
AY: 2006-07
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CITATION:
S. 147/ 148: Non-furnishing of reasons for reopening to assessee renders reassessment void

The question of non-furnishing the reasons for re-opening an already concluded assessment goes to the very root of the matter. Since such reasons had not been furnished to the appellant, even though a request for the same had been made, we are of the opinion that proceedings for the re-assessment could not have been taken further on this ground alone

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DATE: October 14, 2015 (Date of pronouncement)
DATE: October 30, 2015 (Date of publication)
AY: 2008-09
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CITATION:
S. 143(2)/ 292BB: Failure to issue a s. 143(2) notice renders the reassessment order void. S. 292BB saves a case of "non service" of the notice but not a case of "non issue"

The failure of the AO, in re-assessment proceedings, to issue notice under Section 143(2) of the Act, prior to finalising the re-assessment order, cannot be condoned by referring to Section 292BB of the Act. Section 292BB applies insofar as failure of “service” of notice is concerned and not with regard to failure to “issue” notice. The non-issue of the said notice is fatal to the order of re-assessment

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