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TMI Blog2012 (6) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 2155 of 2012 - - - Dated:- 28-5-2012 - MR. JUSTICE SANJIV KHANNA, MR. JUSTICE R.V. EASWAR, JJ. For Appellant: Mr. C.S. Aggarwal, Sr. Advocate with Mr. Prakash Kumar, Advocate. For Respondents: Mr. Sanjeev Rajpal, Senior Standing Counsel. SANJIVKHANNA, J. Acorus Unitech Wireless Pvt. Ltd. in this writ petition under Articles 226 and 227 of the Constitution of India impugns notice under Section 148 of the Income Tax Act, 1961 (Act, for short) dated 5thJuly, 2011 and the letter/order dated 10th April, 2012, dismissing their objections to initiation of proceedings under Section 147 of the Act. The writ petition pertains to the assessment year 2009-10. 2. The petitioner had filed return of income for the assessment year in question under Section 139(4) of the Act on 6th October, 2010. The contention of the petitioner is that the Assessing Officer could have initiated scrutiny assessment proceedings by issue of notice under Section 143(2) of the Act till 30th September, 2011. However, as per the petitioner, the Assessing Officer wrongly issued notice for reassessment under Section 147/148 of the Act on 5th July, 2011, and that on, before, or even after the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Income Tax Act, 1922. In the said case, the assessee had voluntarily filed a return which was a valid return and the same was pending consideration before the Assessing Officer. The Supreme Court struck down the notice under Section 34 of the said Act on the ground that it could not have been issued in view of the language of Sections 22 and 34 of the said Act. It was observed that nothing prevented the Income Tax Officer from taking up the valid return and proceed with the assessment of income. Therefore, issue of notice under Section 34 was improper/ invalid because it was contrary to the jurisdictional requirements stipulated in the said Sections. There was no equivalent or a provision similar to Section 143(1) of the Act (i.e. Income Tax Act, 1961) in the Income Tax Act, 1922. 7. Decision of the Supreme Court in Nizam s Supplemental Family Trust (supra), was on the aspect whether or not, the note made by the Assessing Officer on the return amounted to and had resulted in termination of the proceedings. It was held that note in question was ambiguous and inconclusive and that it did not terminate the proceedings. It was observed: - There is a difference between clauses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit for tax deducted at source is to be allowed, the Income-tax Officer cannot be said to have closed the proceedings finally. The decisions referred to by the Revenue are of no help in the present case. We are, thus, of the opinion that during the pendency of the return filed under section 139 of the Act along with the refund application under section 237 of the Act, action could not have been taken under section 147/148 of the Act. Our answer to the question, therefore, is in the negative, i.e., against the Revenue. The appeal is accordingly allowed with costs. (emphasis supplied) 8. In the said decision, reference was made to High Court judgments in which it has been held that where a return is disposed of it would amount to termination of assessment proceedings, even if the order is not communicated.(ReferM. Ct. Muthuraman versus CIT [1963] 50 ITR 656 (Mad.), V. S. Sivalingam Chettiar versus CIT [1966] 62 ITR 678 (Mad.) and Commissioner of Agricultural Income Tax versus K. H. Parameshwara Bhat [1954] 97 ITR 190 (Ker.)). 9. The Delhi High Court in KLM Royal Dutch Airlines (supra), has referred to and quoted from Nizam s Supplemental Family Trust s case (supra). In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t already completed under Section 143(1) by issuing a notice under Section 143(2) of the Act". However, in the present case since inquiries had been initiated under Section 143(2), it became mandatory that they should have culminated in an order under Section 143(3). (emphasis supplied) 10. We need not delve deeper and state further, in view of what had transpired in the hearing on 20thApril, 2012, the affidavit filed by the respondents thereafter and the statement made by Mr. Sanjeev Rajpal, Sr. Standing Counsel for the Revenue, in the Court on 18thMay, 2012. On 20th April, 2012, the following order was passed:- The contention of Mr. C S Aggarwal, senior advocate is that notice under Section 148 dated 5th July, 2011 was issued when the time limit of issue of notice under Section 143(2) pursuant to return filed on 6th October, 2010 had not expired. He accordingly, submits that the notice under Section 148 is illegal and void. He submits that notice under Section 148 cannot be issued, if a return of income can be made subject matter of scrutiny and regular assessment by issue of notice under Section 143(2). Ld. counsel for the Revenue disputes the legal proposition raised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent writ petition i.e. in spite of information in the form of report of Director of Income Tax (Investigation), assessment proceedings under Section 143(2) of the Act were not initiated and the reasons to believe were recorded before issue notice dated 5th July, 2011 and thereafter similar reasons have been recorded for issue of new notice. It was submitted that the entire issue in question would, therefore be agitated again. This was/is the apprehension and fear of the Revenue. It was the contention of the Revenue that the petitioner wants the Revenue to get involved in a web of technicalities and the proceedings on merits should be stalled. 13. This aspect was put to the learned counsel for the petitioner to solicit his response/reply and clarity. Learned counsel for the petitioner stated that yes, the petitioner would raise the said objections and had relied upon the decision of this Court in Commissioner of Income Tax vs. Ved Co., (2008) 302 ITR 328 (Delhi), wherein the following observations have been made:- 10. We are of the opinion that in view of the decisions that we have mentioned above, for the purpose of initiating reassessment proceedings, the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief by the assessing officer is within the realm of subjective satisfaction [see ITO v. Selected Dalurband Coal Co. (P) Ltd.; Raymond Woollen Mills Ltd. v. ITO]. 21. The scope and effect of Section 147 as substituted with effect from 1-4-1989, as also Sections 148 to 152 are substantially different from the provisions as they stood prior to such substitution. Under the old provisions of Section 147, separate clauses (a) and (b) laid down the circumstances under which income escaping assessment for the past assessment years could be assessed or reassessed. To confer jurisdiction under Section 147(a) two conditions were required to be satisfied, firstly, the assessing officer must have reason to believe that income, profits or gains chargeable to income tax have escaped assessment, and secondly, he must also have reason to believe that such escapement has occurred by reason of either omission or failure on the part of the assessee to disclose fully or truly all material facts necessary for his assessment of that year. Both these conditions were conditions precedent to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecords and the averments made in the writ petition. The petitioner accepts that notice under Section 147 dated 5thJuly, 2011, was served on them. Date of service is not indicated or disclosed. However, the assessment records reveal that the notice was served as per the stamp of the petitioner company, on 6thJuly, 2011. Thereafter, two notices both dated 23rdAugust, 2011, under Sections 142(1) and 143(2) were issued to the petitioner to appear in connection with the proceedings for the assessment year 2009-10. The petitioner appeared and filed several documents and details which were sought for by the Assessing Officer vide various letters. The petitioner has also answered various queries in terms of the questionnaire dated 7th October, 2011, issued by the Assessing Officer under Section 142(1) of the Act. The assessment proceedings have continued in this manner. An order under Section 281B for provisional attachment of assets was passed on 3rd January, 2012. As noted above, on 10th April, 2011, an order under Section 143(1) of the Act was earlier passed. 18. The petitioner claims that on 30th March, 2012, they were for the first time served with the reasons to believe recorded by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... handewala Extn. New Delhi in respect of 2G Spectrum cases out of which M/s Acorus Unitech Wireless (P) Ltd. where PAN lines and with ITO ward 1(1) New Delhi. On scrutiny of the I.T. return filed by the assessment company M/s Acorus Unitech Wireless Pvt. Ltd. on 6.10.2010 for Assessment year 2009-10 reveals that assessee has made investment in equity share of Rs.45,65,38,500/- and no income under any head has been declared by the assessee in its return. As per letter from DIT(Inv.-1), New Delhi vide letter F. No. DIT(Inv)I/Unitech/2G case/2011-12/62 dt. 23.6.2011 as per agreement finalized on October 2008 the M/s Acorus Unitech Wireless Pvt. Ltd. has sold the equity share of FV Rs.10/- for Rs.159/- per share. The assessee company has not shown any income under the short term capital arises on the transfer of equity share. On the basis of the above information, I have reason to believe that it is fit case of the issue of notice u/s 148. 21. It is submitted and argued by the counsel for the petitioner that in the reasons to believe, it has been incorrectly and falsely stated that vide agreement finalized in October, 2008, the petitioner had sold equity shares of F.V. of Rs.10 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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