2016 (6) TMI 701 - HC - Income Tax

Reopening of assessment - non issue of notice - reason recorder belatedly - Held that - There is prima facie materials produced by the department to demonstrate that the envelope was in fact, handed over to the postal authorities on 31.3.2015 itself for delivery. If that be so, it would be sufficient compliance with the requirement of issuance of notice as discussed by this Court in case of Kanubhai M. Patel (HUF) v. Hiren Bhatt or his successors to office and others (2010 (7) TMI 704 - Gujarat High Court ). The second issue pertains to recording of reasons before issuance of notice. In this context, we have perused the original files. We notice that relevant material was placed before the Assessing Officer on 30.3.2015. Upon perusal of such material, considering the fact that the process of reopening would get timebarred soon, on the very same date, he recorded his reasons which are also contained in the file along with a letter of the same date written by him to the Principal Commissioner seeking approval. In the file, we also find the approval granted by the Principal Commissioner of the Income tax also on 30.3.2015. In fact, the suggestion placed by Assessing Officer was first screened by the Joint Commissioner of Income-tax which was then placed before the Principal Commissioner who recorded as under After perusal of the reasons given by the Assessing Officer in the annexure, I am satisfied that that this is a fit case for issue of notice in lieu of section 148 This was written by the Principal Commissioner Shri Sandeep Kapoor in his own handwriting below which he signed putting the date of 30.3.2015. Such materials on record would therefore, destroy the petitioners theory that reasons were recorded later but notice was issued prior in point of time. On this count also, petitions must fail. - Decided against assessee

Summary

Issues Involved:
1. Whether the notice under section 148 of the Income Tax Act was issued within the prescribed time limit.
2. Whether the Assessing Officer recorded reasons before issuing the notice under section 148.

Issue-wise Detailed Analysis:

1. Timely Issuance of Notice under Section 148:
The petitioner argued that the notice dated 30.03.2015 was not booked for delivery until 01.04.2015, thus exceeding the six-year limitation period for reopening the assessment for the year 2008-2009, as per section 149 of the Income Tax Act. The petitioner provided postal endorsements showing the notice was booked on 01.04.2015, suggesting a false theory by the department to overcome the limitation issue.

The department countered that the notice was handed over to the postal authority on 31.03.2015, but due to an overload, it was booked on 01.04.2015. The department cited the "book now pay later" scheme, arguing that the requirement for affixing stamps was not applicable. They provided affidavits and outward register entries showing the notice was handed over on 31.03.2015, with signatures from the postal pickup man confirming receipt.

The court referred to the precedent set in Kanubhai M. Patel (HUF) v. Hiren Bhatt, which defined the issuance of notice as the date it is handed over to the postal department. The court found sufficient prima facie evidence from the department to demonstrate the notice was handed over on 31.03.2015. Given the disputed facts, the court decided not to delve deeper at the writ petition stage, leaving it for the petitioner to challenge in further proceedings if necessary.

2. Recording of Reasons Before Issuance of Notice:
The petitioner contended that there was no evidence the Assessing Officer recorded reasons before issuing the notice, suggesting the reasons were undated and possibly recorded post-issuance.

The department presented original files showing that the Assessing Officer recorded reasons on 30.03.2015, the same day he sought approval from the Principal Commissioner. The files included the Principal Commissioner’s handwritten approval dated 30.03.2015, indicating the reasons were indeed recorded before issuing the notice.

After reviewing the original files, the court concluded that the reasons were recorded before the notice was issued, as required by law. This evidence invalidated the petitioner's claim that the reasons were recorded later.

Conclusion:
The court dismissed the petitions, finding that the notice under section 148 was issued within the prescribed time limit and that the Assessing Officer had recorded reasons before issuing the notice. The court emphasized that such disputed factual questions are not suitable for examination in a writ petition, especially at the notice stage, and should be addressed through the appropriate tax appeals process.