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TMI Blog2012 (5) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... d examined by the tribunal. - Matter remanded back to tribunal - Decided in favor of revenue. - ITA 769/2010 - - - Dated:- 29-3-2012 - MR. JUSTICE SANJIV KHANNA, MR. JUSTICE R.V.EASWAR, JJ. For Appellant: Mr. Sanjeev Sabharwal, sr. standing counsel. For Respondent: Mr. R.M. Mehta, Advocate. O R D E R Having heard learned counsel for the parties in this appeal under Section 260A of the Income Tax Act, 1961 (Act, for short), which pertains to the assessment year 2001-02, we formulate the following substantial question of law:- Whether the Income Tax Appellate Tribunal was right in quashing the proceedings under Section 147/148 of the Act on the ground that the jurisdictional pre conditions are not satisfied? 2. As we have heard learned counsel for the parties, we proceed to pronounce our decision on the aforesaid substantial question of law. 3. The respondent-assessee is a company and for the assessment year in question, an assessment order under Section 143(3) of the Act was passed on 24th January, 2003. The Assessing Officer while passing the said assessment order had recorded as under:- From the perusal of the balance sheet, it is seen that an addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment for the Assessment year was completed u/s 143(3) on 24.01.2003 on an income of Rs.247203 and the period falls beyond four year, in which the AO cannot issue notice u/s 147/148 of the Income Tax Act, 1961 of his/her own without the approval of higher authorities. After verifying the assessment records, the information received from the DG (Inv.) through CIT, Delhi-IV New Delhi I have reason to believe that the assessable income has escaped the assessment to the tune of Rs.23,41,827/- and action is required to be taken under the provisions of section 147/148 of the Income Tax Act, 1961. Necessary approval for the issue u/s 148 may pleased be accorded (emphasis supplied) 5. The assessee objected to the re-assessment proceedings by filing objections, which were rejected vide order dated 14th December, 2007. Thereafter, the Assessing Officer passed an assessment order dated 26th December, 2007 making addition of Rs.75,00,000/- as income from undisclosed sources by applying Section 68 of the Act. He held that the shareholders, in fact, were merely accommodation entry providers and, therefore, the entire share capital of Rs.30,00,000/- and the share premium of Rs.45,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that account must coexist to confer jurisdiction on the ITO to issue the notice u/s 148. In the case of Dhanraj Singh co. Vs. CIT Another 132 CTR 323, Hon ble Patna High Court has held that there being no allegation whatsoever either in the show cause notice or in the reasons recorded that there was any failure on the part of the assessee to disclose fully and truly all material facts, initiation of reassessment proceedings after a period of four years would be invalid. In the case of Kaira District Cooperative Milk Producers Union Ltd. Vs. CIT 216 ITR 371, Hon ble Gujarat High Court has held that where in the reasons recorded for initiating the proceedings u/s 147, there is no mention about the satisfaction of the Assessing Officer or the formation of belief as to the escapement of income owing to the failure on the part of the assessee to disclose the material facts necessary for assessment, issue of notice u/s 148 would be invalid. 8. We have quoted above the reasons to believe recorded by the Assessing Officer. In the underline portion/reasoning, it has been stated that that the Assessing Officer after verifying the assessment records and information received from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led by the Income tax Officer in the High Court, he stated all the material facts. The respondent had inspected the record and the record also bears out the existence of the material facts. The proceedings drawn up which are abstracted earlier also show that the Income tax Officer had applied his mind to the fact on record and was prima facie satisfied that the reopening of the assessment for the assessment year 1957-58 was needed due to those stated facts. Thus, though ex facie the notice does not disclose the satisfaction of the requirement of section 147(a), from the record and the averments in the counter affidavit, it is clear that the Income tax Officer had applied his mind to the facts and, after prima facie satisfying himself of the existence of those two conditions precedent, reached the conclusion for reopening the assessment. It is settled law that, in an administrative action, though the order does not ex facie disclose the satisfaction by the officer of the necessary facts if the record discloses the same, the notice or the order does not per se become illegal. 10. Initially the onus is on the Revenue to satisfy and show that the jurisdictional pre-conditions for re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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