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2019 (5) TMI 350 - HC - Income TaxReopening of assessment - material 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, it is of the view that 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. In reference to case of Rajesh Jhaveri 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. Jurisdiction of the Assessing Officer in re-opening the assessment. 3. Reasons for re-assessment based on tangible material. 4. Challenge to the order of re-assessment before the Commissioner of Income Tax (Appeals). Analysis: Issue 1: Re-assessment under the Income-Tax Act, 1961 for Assessment Year 2010-11 The petitioner was involved in a second round of litigation regarding re-assessment under the Income-Tax Act for the Assessment Year 2010-11. Despite the initial return of income not being taken up for scrutiny, a notice under Section 148 was issued by the respondent within the six-year period allowed for re-assessment. Subsequently, an order of re-assessment was passed, leading the petitioner to challenge it through a writ petition seeking to quash the order and consequential demand notice. Issue 2: Jurisdiction of the Assessing Officer in re-opening the assessment The petitioner contended that the re-assessment was merely a reappreciation of existing facts without any new information. However, the reasons for re-assessment indicated that material from the Information Wing formed the basis for initiating the proceedings. The court held that the assumption of jurisdiction by the Assessing Officer was valid, citing tangible material provided for the belief of income escapement. Reference was made to relevant case law, including the Supreme Court's decision in Assistant Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers Pvt. Ltd., emphasizing the importance of tangible material for re-assessment. Issue 3: Reasons for re-assessment based on tangible material The reasons for re-assessment highlighted specific transactions and discrepancies in the petitioner's financial records, indicating potential income tax evasion. The court acknowledged the material presented by the respondent as sufficient grounds for re-assessment, especially considering the lack of scrutiny during the initial assessment process. The court also referenced the petitioner's objections and submissions regarding the jurisdiction of the Assessing Officer, ultimately upholding the validity of the re-assessment based on tangible information. Issue 4: Challenge to the order of re-assessment before the Commissioner of Income Tax (Appeals) Following the rejection of the petitioner's objections to the re-assessment, the court dismissed the writ petition. However, the petitioner was granted the liberty to challenge the re-assessment order before the Commissioner of Income Tax (Appeals). The court allowed the appeal to be filed within two weeks without reference to limitation, considering the petitioner's continuous litigation against the re-assessment proceedings. In conclusion, the court upheld the validity of the re-assessment order based on tangible material and dismissed the writ petition while granting the petitioner the opportunity to appeal before the Commissioner of Income Tax (Appeals) within a specified timeframe.
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