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2019 (4) TMI 966 - HC - Income TaxReopening of assessment - information received from the Information Wing on the basis of which the present proceedings have been initiated - HELD THAT - Return filed by the petitioner was not taken up for scrutiny initially, and only an intimation under Section 143(1) has been issued, the assumption of jurisdiction in this case cannot be faulted, particularly since the respondent has, in the reasons for re-opening, cited tangible material upon which he rests his belief of escapement of income. As relying on RAJESH JHAVERI STOCK BROKERS P. LIMITED 2007 (5) TMI 197 - SUPREME COURT there is no merit in this writ petition and the same is dismissed. The order of re-assessment dated 29.11.2017 thus stands revived in the light of the rejection of the objections of the petitioner dated 19.02.2018. The petitioner seeks and is granted liberty to challenge the order of re-assessment dated 29.11.2017 before the Commissioner of Income Tax (Appeals). Since the petitioner has been litigating against the proceedings for re-assessment from 19.12.2017 when it filed the first writ petition challenging the order of reassessment, the appeal shall be received by the Commissioner of Income Tax (Appeals), if filed within two weeks from today, without reference to limitation.
Issues:
1. Re-assessment under the Income-Tax Act, 1961 for Assessment Year 2010-11. 2. Jurisdictional challenge based on tangible material for escapement of income. 3. Re-opening of assessment based on information received from the Information Wing. 4. Challenge to rejection of objections to re-opening of assessment. 5. Legal position on assessment under Section 143(1) and change of opinion. 6. Dismissal of the writ petition challenging the order of re-assessment. Analysis: 1. The petitioner was involved in re-assessment proceedings for the Assessment Year 2010-11 under the Income-Tax Act, 1961. Despite initially not being taken up for scrutiny, a notice under Section 148 was issued by the respondent within the six-year period for re-assessment. The petitioner challenged the order of re-assessment and consequential notice of demand, leading to a series of legal proceedings. 2. The petitioner contended that the assumption of jurisdiction for re-assessment lacked new or tangible information and was merely a review of existing facts. However, the reasons for re-assessment cited material received from the Information Wing, indicating potential escapement of income. The court upheld the jurisdiction, citing the need for tangible material to support the belief of income escapement, as established in relevant case law. 3. The re-assessment was initiated based on information regarding substantial credits in the petitioner's bank account and subsequent loan transactions, suggesting potential income escapement. Despite objections raised by the petitioner, the rejection of objections led to the legal challenge before the High Court. 4. The petitioner's objections to the re-opening of assessment were rejected, prompting the legal recourse. The court considered the reasons for re-assessment, emphasizing the need for tangible material to justify the belief of income escapement, as highlighted in relevant judicial precedents. 5. The legal position regarding assessment under Section 143(1) and the concept of change of opinion were deliberated. The court referenced case law to analyze the validity of re-assessment based on existing material and the limitations on issuing notices for verification purposes. The dismissal of the writ petition was based on these legal considerations. 6. Ultimately, the writ petition challenging the order of re-assessment was dismissed, affirming the revival of the re-assessment order. The petitioner was granted liberty to appeal the decision before the Commissioner of Income Tax (Appeals) within a specified timeframe, allowing for further legal recourse despite the dismissal of the writ petition.
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