2021 (7) TMI 964 - HC - Income Tax

Validity of Reopening of assessment u/s 147 - expiry of time limit for making reopening of assessment under Section 148 - Assessee stating that the reopening is done beyond the period of six years and therefore, the impugned notice under Section 148 is without jurisdiction - HELD THAT - The respondent in vide letter dated 14.11.2011 has stated that the reassessment proceedings were initiated for issuance of notice under Section 148 on 07.03.2011 and was served to the petitioner assessee on 16.03.2011.This was well before the expiry of time limit for making reopening of assessment under Section 148 of the Act. Accordingly, notice shall be deemed to be a valid notice. The petitioner is bound to submit their objections, if they have chosen to do so. In the event of filing any such objections, same are to be considered by the respondents and the same is to be disposed of by passing a speaking order as per the directions of the Hon'ble Supreme Court in the case of GKN Driveshafts India Ltd., vs ITO 2002 (11) TMI 7 - SUPREME COURT Even before submitting the objections on the reasons furnished for reopening of assessment, the petitioner filed the writ petition on the ground that reopening of assessment is made beyond the period of six years and therefore, the respondent has no jurisdiction. Respondents have categorically stated in their letter dated 14.11.2011 for the impugned notice under Section 148 was issued on 07.03.2011 and it was served to the assessee on 16.03.2011. The last date for reopening of assessment was 30.03.2011 and thereafter the impugned notice of reopening of assessment is well within the period of six years. In these circumstances, the petitioner has to avail the opportunities to be provided under the provisions of the Act. - Decided against assessee.

Summary

Issues:
1. Jurisdictional validity of reassessment proceedings under Section 147 of the Income Tax Act for Assessment Year 2004-05.

Analysis:
The petitioner, a company, filed its return for the Assessment Year 2004-05, admitting an income and claiming deductions. After scrutiny assessments and appeals, the Income Tax Appellate Tribunal allowed the deduction under Section 80 IA but decided against the petitioner on the issue of replacement of machinery. The Department's appeal on the issue of bad debts was not adjudicated, leading to a separate petition and subsequent allowance by the Tribunal. A writ petition filed by the Tribunal was set aside by the High Court, pending further proceedings. Subsequently, the first respondent initiated reassessment proceedings under Section 147 based on certain deductions claimed by the petitioner.

The petitioner contended that the reassessment proceedings were invalid as the reasons for reopening were communicated beyond the six-year period and there was no failure to disclose material facts. The respondent argued that the notice was issued within the six-year limit and the petitioner must participate in the process. The respondent provided reasons for reopening related to VRS payments and deductions under Section 80 HHC, alleging incorrect determination of deductions and consequent tax shortfall.

The petitioner objected to the reopening being beyond six years, but the respondent maintained that the notice was validly issued within the time frame. The petitioner filed a writ petition challenging the jurisdiction of the reassessment. The respondent clarified that the notice was served within the six-year limit, urging the petitioner to submit objections for consideration. The petitioner's grounds for intervention were deemed unacceptable, and the writ petition was dismissed without costs, directing the petitioner to avail opportunities to conclude the proceedings promptly.

In conclusion, the High Court dismissed the writ petition challenging the reassessment proceedings under Section 147 for the Assessment Year 2004-05, emphasizing the validity of the notice issued within the statutory period. The petitioner was directed to participate in the process and submit objections for consideration, in line with the directions of the Hon'ble Supreme Court, ultimately upholding the jurisdiction of the respondent in initiating the reassessment proceedings.