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TMI Blog2012 (9) TMI 584X X X X Extracts X X X X X X X X Extracts X X X X ..... , do not find any positive finding in this regard in Income Tax Appeal No.749 of 2007 relating to year 1996-97 and 1997-98 - decided in favour of the revenue and remand the matter to the Income Tax Appellate Tribunal to consider the appeal afresh and before considering the matter on merit with regard to assessment years 1996-97 and 1997-98 the Income Tax Appellate Tribunal will ascertain from the record, whether the satisfaction is recorded by the Joint Commissioner or Addl. Commissioner as the case may be or the officer, who was higher to the Income Tax Officer in the relevant year as it is only after he find that such satisfaction is recorded in accordance with Section 152 (2), that he may proceed to decide the appeals - against assessee. - INCOME TAX APPEAL No. - 256 of 2011, 749 of 2007, 445 of 2007 - - - Dated:- 10-9-2012 - Sunil Ambwani, Aditya Nath Mittal, JJ. Petitioner Counsel : - R.K. Upadhyaya Respondent Counsel : - R . R . Kapoor 1. We have heard Shri R.K. Upadhyay, learned counsel for the Income Tax Department. Shri R.R. Kapoor appears for the respondent assessee. 2. I.T.A. No.256 of 2011 has been filed by the CIT-I against the order of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.17,41,390/- and directed issuance of penalty notice under Section 271 (1) (c) and to charge interest under Section 234 (a), 234 (b), 234 (c) and 234 (d) as per law. The CIT (A) dismissed the appeals. The Tribunal by its order dated 27th July, 2007 allowed the appeal on the ground that the matter is covered by the judgment in Dr. Shashi Kant Garg v. CIT, 285 ITR 158 with observations in para 6 as follows:- "6. We find that in the present case, return was filed on 31.3.1996 u/s 139 (4) of the Act. Subsequently, the assessment was reopned u/s 147 of the Act and notice u/s 148 was issued on 21.3.2002 by ITO. Thus, it is evident that the notice has been issued after the expiry of four years from the end of the assessment year and therefore, the specific procedure laid down u/s 151 sub section (2) had to be followed. The Hon'ble Allahabad High Court in the case cited supra at page 173 has observed that if under the provisions of the Act an authority is required to exercise powers or to do an act in a particular manner, then that power has to be exercised and the act has to be performed in that manner alone and not in any other manner. Admittedly, in the present case, the notice has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under Section 143 (1) of the Act. Subsequently, the Assessing Officer initiated reassessment proceedings on the ground that income chargeable/ assessable to tax for the year 1997-98 had escaped assessment within the meaning of Section 147 of the Act. Accordingly, he issued notice under Section 148 of the Act on 5.8.2002. 9. It is not in dispute between the parties that the notice under Section 148 of the three assessment years namely 1995-96; 1996-97 and 1997-98 were issued after a period of 4 years from the last date of the assessment years. For the year 1997-98 the assessment was completed by the Assessing Officer against which the CIT (A) dismissed the appeal. The Tribunal decided the appeals regarding the year 1996-97 and 1997-98 by common order and allowed the appeals on 23.2.2007 on the same reasoning on which he has allowed the appeal in respect of assessment year 1996-97. 10. Shri R.K. Upadhyay, learned counsel appearing for the revenue submits that the Tribunal has relied upon Dr. Shashi Kant Garg v. CIT (Supra), which has been discussed and distinguished in Ajai Verma v. CIT Anr., (2008) 304 ITR 30 (All). In Ajai Verma's case this Court found from the scheme of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al difference between the expression 'intimation' and 'assessment order'. In later part of the judgment the Supreme Court held:- "The contextual difference between the two expressions has to be understood in the context the expressions are used. Assessment is used as meaning sometimes the computation of income , sometimes the determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the tax payer . In the scheme of things, as noted above, the intimation under section 143(1)(a) cannot be treated to be an order of assessment. The distinction is also well brought out by the statutory provisions as they stood at different points of time. Under section 143(l)(a) as it stood prior to April 1, 1989, the Assessing Officer had to pass an assessment order if he decided to accept the return, but under the amended provision, the requirement of passing of an assessment order has been dispensed with and instead an intimation is required to be sent. Various circulars sent by the Central Board of Direct Taxes spell out the intent of the Legislature, i.e., to minimize the departmental work to scrutinize each and every return and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment for that year, income chargeable to tax has escaped assessment for that year, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Assessing Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned (hereafter in sections 148 to 153 referred to as the relevant assessment year). Explanation 1. For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely : (a) Where income chargeable to tax has been underassessed ; or (b) where such income has been assessed at too low rate ; or (c) where such income has been made the subject of excessive relief under this Act or under the Indian Income-tax Act, 1922 (11 of 1922); or (d) where excessive loss or depreciation allowance has been computed. Explanation 2. Production before the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 (i) 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 be satisfied before the Assessing Officer could have jurisdiction to issue notice under section 148 read with section 147(a) But under the substituted section 147 existence of only the first condition suffices. In other words if the Assessing Officer for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. It is however to be noted that both the conditions must be fulfilled if the case falls within the ambit of the proviso to section 147. The case at hand is covered by the main provision and not the proviso. So long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be followed so far as interpretation of Section 151 (2) is concerned. He submits that a bare reading of Section 151 (2) would show that after four years as in the present case notice can only be issued by the Assessing Officer, who is not below the rank of Joint Commissioner. In the present case the notice has been issued by ITO-2 (2), Kanpur, which was below the rank of Joint Commissioner in the relevant year, below the rank of Deputy Commissioner. 15. We have considered the submissions and agree with the opinion expressed by this Court in Ajai Verma's case, by which a distinction was drawn with the observations made in Dr. Shashi Kant Garg's case. While interpreting Section 152 (2) in the context in which the powers have been distributed, this Court clearly found that where the assessment has not been made under Section 143 (1) (3) or under Section 147, there was no occasion for the ITO to have applied his mind. We further find that in view of the judgment in Rajesh Jhaveri Stock Brokers P. Ltd. (Supra), after 1st April, 1989, in accepting the returns under Section 143 (1) (a) the Assessing Officer does not apply his mind and that the acknowledgment is received mostly by mini ..... X X X X Extracts X X X X X X X X Extracts X X X X
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