2021 (7) TMI 333 - HC - Income Tax

Reopening of assessment u/s 147 - whether the authority competent has reason to belief for reopening of Assessment in respect of the income chargeable to Tax as escaped assessment? - HELD THAT - In the present case, the petitioner made an attempt to adjudicate the issues on facts by holding that mere purchase of property is not a ground to invoke u/s 147 - Beyond the facts, the transactions made, the sources on hand and other details are to be scrutinized by the AO for the purpose of forming an opinion. Admittedly the petitioner has not filed Returns of income for the Assessment Year 2011-2012. Assessment or Re-Assessment is to be made with reference to the reasons furnished. This being the factum established, the petitioner has to proceed with the process by producing all the documents and evidences to defend their case. This Court that pursuing of the interim order, the Assessment Officer was permitted to complete the adjudication and pass a final order of Assessment. Thus, the respondent is permitted to communicate the Assessment Order, if any already passed to the Writ Petitioner, enabling the petitioner to redress her grievances by preferring an appeal under the provisions of the Income Tax Act, if advised.

Summary

Issues:
Challenge to initiation of Writ proceedings under Section 147 of the Income Tax Act and notice issued under Section 148; Disposal of objections raised by petitioner against reopening of Assessment for the year 2011-2012.

Analysis:
The petitioner contested the initiation of Writ proceedings under Section 147 of the Income Tax Act and the notice issued under Section 148 for the Assessment Year 2011-2012. The petitioner argued that her income for that year was below the taxable limit, hence she did not file returns under Section 139. The respondent, however, issued a notice under Section 148, alleging income escapement based on property purchase, interest income, and insurance premium. The petitioner objected to this reopening, stating that the respondent had previously reviewed these transactions. Despite the objections, the respondent dismissed them and decided to reopen the assessment, claiming income escapement.

The petitioner's counsel contended that the reasons provided for reopening, including property purchase and other income sources, were already known to the respondent and did not warrant Section 147 invocation. The court noted that factual determinations are not within its purview under Article 226. The court emphasized that the assessing officer must assess whether there are grounds for income escapement, as in this case where the petitioner did not file returns. The court emphasized that the assessing officer should scrutinize all relevant documents and evidence to form an opinion based on facts, beyond the petitioner's arguments.

The court allowed the Assessment Officer to complete the assessment and communicate the final order to the petitioner for possible appeal. Consequently, the Writ Petition was dismissed without costs. The court highlighted the importance of the assessing officer's role in evaluating income escapement based on furnished reasons and evidence, emphasizing the need for the petitioner to cooperate by providing necessary documentation for assessment or reassessment purposes.