2019 (7) TMI 871 - AT - Income Tax

Reopening of assessment - as alleged non issue of notice u/s 143(2) - HELD THAT - We are of the view that the AO is not depended upon the assessee to commence assessment proceedings. Once he has given an opportunity to the assessee to submit return in 30 days or in a particular time along with notice u/s 148, and the assessee failed to file return in that time, then he has set the assessment machinery in motion. Thereafter assessee cannot complain that on that return he has not issued notice u/s 143(2). Let us take an example; the assessee did not choose to file return in response to the notice under section 148, and the assessment would be going to be time barred on 31st December; the assessee filed the return on 29th December; can the assessee expect that the AO should have issued notice u/s 143(2) and on his failure the assessment deserves to be quashed. Answer to the above is NO, because the assessment proceeding has to be conducted in accordance with the procedure and not depended upon the mercy of the assessee. Therefore, we do not find any merit in the first fold of contention raised by the assessee. Approval, the JCIT without recording a satisfaction - HELD THAT - Due procedure has been followed. JCIT has gone through the record and applied his mind, and thereafter granted the approval. There is no merit in the contentions of the ld.counsel for the assessee. Reasons to belief - wrong facts - HELD THAT - In the present case, no doubt there is an error at the end of the AO while taking cognizance of the fact which goad him to harbor a belief that income has escaped the assessment, and that error is that the assessee has not filed return whereas the assessee has filed the return. Now question is, whether such an error is so fatal that re-assessment is to be quashed ? We have perused the return. The assessee did not disclose the sale transaction of the property and did not offer income under the head capital gain on transfer of real-estate. We are of the view that even if the return would have been perused, the opinion would be the same because capital gain has not been shown by the assessee in the return. Therefore, the assessee cannot draw any benefit from any of the judgments cited before us. We do not find any error in the finding of the Revenue authorities, and this appeal is devoid of any merit. It is dismissed. - Appeal of the assessee is dismissed.

Summary

Issues:
1. Reopening of assessment upheld by ld.CIT(A)
2. Validity of assessment order passed under section 144 r.w.s. 147 without notice under section 143(2)
3. Approval for reopening granted by Joint Commissioner without recorded satisfaction
4. Coherence between information available with AO and reasons for reopening assessment

Analysis:
1. The appellant contested the reopening of assessment by ld.CIT(A), arguing that the AO erred in upholding it. The AO reopened the assessment due to alleged income escaping tax. The appellant failed to file a return in response to the notice under section 148, leading to an ex parte assessment order under section 144 r.w.s. 147. However, the Tribunal found that the AO was not obligated to issue a notice under section 143(2) if the appellant failed to file a return within the stipulated time after the notice under section 148. The Tribunal dismissed this contention, emphasizing procedural compliance.

2. The appellant challenged the validity of the assessment order passed under section 144 r.w.s. 147 without the issuance of notice under section 143(2). The appellant contended that the AO should have issued the notice before proceeding with the assessment. However, the Tribunal held that once the AO initiated the assessment process by issuing a notice under section 148 and the appellant failed to file a return within the specified time, the AO was not required to issue a notice under section 143(2). The Tribunal rejected this argument, citing the procedural requirements.

3. The appellant raised a concern regarding the approval for reopening granted by the Joint Commissioner without recorded satisfaction. The Tribunal examined the approval letter and found that due procedure was followed. The Joint Commissioner reviewed the records and reasons before granting approval under Section 151 of the Income Tax Act for the relevant assessment year. The Tribunal concluded that the approval process was in accordance with the law, dismissing the appellant's contention.

4. The appellant argued that there was no coherence between the information available with the AO and the reasons for reopening the assessment. Citing precedents, the appellant contended that the AO's belief that income had escaped assessment was based on incorrect facts, as the appellant had filed the return. However, the Tribunal noted that the appellant did not disclose the property sale transaction and capital gains in the return, which was crucial. The Tribunal held that the error regarding the filing of the return did not affect the AO's belief that income had escaped assessment, as the relevant transaction was not disclosed. The Tribunal found no merit in the appellant's argument, upholding the decision of the Revenue authorities.

In conclusion, the Tribunal dismissed the appeal, upholding the decisions of the Revenue authorities regarding the reopening of assessment and the validity of the assessment order passed under section 144 r.w.s. 147. The Tribunal also confirmed the approval for reopening granted by the Joint Commissioner and found coherence between the information available with the AO and the reasons for reopening the assessment.