2015 (10) TMI 1087 - HC - Income Tax

Reopening of assessment - Held that - This court is of the considered view that the petitioner could be directed to file necessary returns and thereafter claim necessary particulars from the assessing authority and on receipt of such reasoning for reassessment, the petitioner shall redress his grievance in accordance with law. Writ petition is disposed of and the petitioner is directed to file necessary returns and thereafter claim necessary particulars from the assessing authority giving adequate reasons within the reasonable time. Upon receipt of such reasoning the petitioner shall file necessary objections and thereafter the assessing authority shall proceed in accordance with law and pass appropriate orders of assessment.

Summary

Issues:
Challenge to Notice under Section 148 of Income Tax Act for reassessment on grounds of income escaping assessment for the assessment year 1996-97.

Analysis:
The petitioner, a partnership firm engaged in Finance, Leasing, and other businesses, filed a return for the assessment year 1996-97 declaring income. Subsequently, a notice under Section 148 was issued, leading to a reassessment in terms of Section 147 of the Act. The dispute arose regarding lease rental income from cinematograph films, specifically regarding depreciation claimed by the petitioner. Another notice under Section 148 was issued for reassessment, prompting the petitioner to challenge the jurisdiction of the assessing officer for proceeding with reassessment.

The petitioner contended that reassessment proceedings lacked satisfactory reasons and were based on invalid assumptions, questioning the jurisdiction under Sections 147 and 148 of the Income Tax Act. On the other hand, the respondent argued that the reassessment was within the limitation period and that any objections regarding jurisdiction or merits could be raised before the assessing authority. The respondent suggested that the petitioner should file returns and seek necessary details from the assessing authority before challenging the reassessment.

The court, after considering both sides' submissions and the case's circumstances, directed the petitioner to file necessary returns and claim particulars from the assessing authority with adequate reasons within a reasonable time. Upon receiving the reasoning for reassessment, the petitioner was instructed to file objections, after which the assessing authority would proceed with assessment and pass appropriate orders. The court emphasized that after the assessment order, the petitioner could seek further remedies if necessary. The writ petition was disposed of with no costs, and the connected MP was closed.