2015 (10) TMI 809 - HC - Income Tax

Condonation of delay - extraordinary delay of 344 days in re-filing the appeal - Held that - Apart from saying that the appeals have been filed in the discharge of official duties and that some delay has taken place since the concerned officer had to perform other functions as Assessing Officer ( AO ), there is no satisfactory explanation for the extraordinary delay. There appears to be some casualness on the part of the counsel for the Revenue in attending to the defects pointed out by the Registry. Consequently, the Court is not inclined to condone the delay in re-filing the appeal.- Decided against revenue. Reopening of assessment - whether the ITAT was justified in quashing the reassessment proceedings under Section 147/148 on the ground that there was no specific material with the AO to hold that any income has escaped assessment - Held that - The decision of the ITAT appears to have turned entirely on facts. It is observed by the ITAT that there was nothing on record before the AO even in the form of any specific information that the Assessee had converted black money into white through an entry provider. Further, while in the notice issued to the Assessee for four years, the AO had observed that ₹ 27 lakhs, ₹ 62 lakhs, ₹ 4.80 crores and ₹ 6.96 crores respectively had escaped assessment, the additions actually made for the respective years were ₹ 27 lakhs, ₹ 10 lakhs, ₹ 1.5 crores and ₹ 10 lakhs respectively. This meant that the AO was himself not sure that the entire amount which was mentioned in the report of the investigation was on account of the escaped income of the Assessee. This also showed that the AO had not applied his mind before issuing notice under Section 148 of the Act. No substantial question of law arises for determination - Decided against revenue.

Summary

Issues:
1. Condonation of delay in re-filing the appeal
2. Justification of quashing reassessment proceedings under Section 147/148 of the Income Tax Act, 1961

Condonation of Delay in Re-filing the Appeal:
The appellant sought condonation of a 344-day delay in re-filing the appeal, citing official duties and objections raised by the Assessing Officer. However, the court noted a lack of satisfactory explanation for the delay, attributing it partly to casualness on the part of the Revenue's counsel in addressing Registry objections. Consequently, the court declined to condone the delay, emphasizing the importance of timely compliance with procedural requirements.

Justification of Quashing Reassessment Proceedings:
The central issue revolved around the ITAT's decision to quash reassessment proceedings under Section 147/148 of the Income Tax Act, 1961. The ITAT found that the Assessing Officer lacked specific material to support the claim of escaped income, highlighting discrepancies between the amounts mentioned in the investigation report and the actual additions made. This discrepancy indicated a lack of certainty on the part of the AO regarding the escaped income, suggesting a failure to apply proper judgment before issuing the notice under Section 148. As the ITAT's decision was fact-based and remained uncontested, the court concluded that no substantial question of law arose for determination. Consequently, the appeal was dismissed on both procedural grounds and merits, upholding the ITAT's decision to quash the reassessment proceedings.