need help on 147

[bhaskar rao]

Sir,

I am ITP. My client has received notice u/s 147 of IT Act, 1961 asking to furnish return within 30 days. Can you please advice what are the steps to be taken in the law? I read the articles section but there is no answer there. Is there any article which deals with the topic. How to proceed so as to ensure that my client is not fall foul of law while at the same time protect his interest so that there is nothing untoward to happen in law.  Please respond urgently.

Yours faithfully,

Bhaskar Rao, ITP.

[probal_shome]

Hello Mr. Bhaskar Rao,

To determine whether the notice u/s 148 has been validly issued, the following have to be considered:

(i) Is the notice within the overall time limit of 6 years from the end of the AY?
(ii) Was an order u/s 143 (3) passed for the AY?
(iii) If so, has 4 years passed from the end of the AY (ref proviso to s. 147)?
(iv) Has there been a full & true disclosure of the material facts by the assessee?
(v) Has the AO alleged that there has been a failure to disclose material facts?

I suggest you file a ROI within the time prescribed and ask the AO to give you a copy of the recorded reasons (and sanction letter of the CIT, if applicable). Once you have the reasons, you can decide your strategy.

There is a lot on important case law on the subject. I will collect them and put it up here in a day or two.

Regards,

Probal.

Sir,

I am ITP. My client has received notice u/s 147 of IT Act, 1961 asking to furnish return within 30 days. Can you please advice what are the steps to be taken in the law? I read the articles section but there is no answer there. Is there any article which deals with the topic. How to proceed so as to ensure that my client is not fall foul of law while at the same time protect his interest so that there is nothing untoward to happen in law.  Please respond urgently.

Yours faithfully,

Bhaskar Rao, ITP.

[sharmaa.ankur]

Hi bhaskar,

Regarding the authority on seeking reasons, you may refer to the SC decision in the case of Sun Engineering and in case you have already filed the return of income of the concerned client, you may attach a copy of the same in response to the notice saying that the same may be considered as return filed in response to such notice while also seeking a copy in writing of the reasons for reopening of assessment, which may subsequently be challenged on merits accordingly.

For a quick reference on the case laws, which in this section are many, you may refer to Master Guide to Income-tax or Direct Tax Manual and after getting to know the precise reasons for reopening of assessment, a suitable challenge to the same can be made.

Regards,
Ankur

[bhaveshformals]

The most important part is to first file a return.
Then do not forget to ask for the reasons to believe that the income has escaped assessment.

[bhaskar rao]

Sirs,

Thank you very much for the speedy response. I am very grateful for your help. I am not having much exposure to the legal aspects and that is why I was worried that something untoward in law may happen. I am feeling less-worried now because I know there are people with knowledge and expertise willing to come forward and help and clarify all my doubts. I will also study the  Master Guide to Income-tax and take all steps as per your guidance.

Thank you again sir for such quick replies.

Yours faithfully,

Bhaskar Rao, ITP.

[CA_Ramesh]

Friends,

section 147 is one section that causes a lot of agony to all because it involves reopening the past completed matters. So I thought we must list out the all-important judgements on issue:

Calcutta Discount Co. Ltd. -vs- ITO, [1961] 41 ITR 191 (SC)
Commissioner of Income-Tax -vs- Kelvinator of India Ltd., [2002] 256 ITR 1 (Del) (FB)
Commissioner of Income-Tax -vs- Sun Engineering Works P. Ltd., [1992] 198 ITR 297(SC)
GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19/[2002] 125 Taxman 963 (SC)

Anybody wanting basic understanding of law of 147 must do well to read above judgements so that the basic concepts are clear. Hope I have not missed any other important judgements on the point.

CA Ramesh.

[taxationlaws]

Friends,

In addition to useful case laws pointed out by Mr Ramesh, we may also refer to latest Supreme Court ruling in the case of Rajesh Javeri Stock Brokers 291 ITR 500 (Hon'ble Justices Arijit Pasayat and Justice D.K.Jain) which after considering at length the changing face of assessment and reassessment scheme in Income Tax Act, has distinguished scope of reassessment in 143(1) (or 'intimation' cases) and 143(3) cases (regular assessment/scrutiny assessment).

May be useful

Regards
CA Kapil Goel
B.Com(H) ACA LLB

[bhaskar rao]

Sirs,

Thank you very much for your guidance. I will read case laws given by you and try to understand such a complicated subject.  ??? :'(

Yours faithfully,

Bhaskar Rao, ITP.

[kotreshmg]

147 is not a complicated procedure,  all one needs to do is first ascertain the reason from the person whether he has the received the notice or how it has come to him.  if it is not served on him, donot reply. Service of Notice under 148 in proper manner 282 is very important.  You neednot reply if it served on person other than the one mentioned in notice.

Then challenge the reasons, in many cases, there will no reasons and whereever there are reasons, they are absurd and illogical.

Ensure that all facts were disclosed in the first instance itself and fight that no new material is there or reassessment is mere change of opinion.

[bhaskar rao]

Dear Sir,

Thank you for advice. I will follow it. It is good that there are seniors willing to help so willingly.

Yours faithfully,

Bhaskar Rao ITP.