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TMI Blog2013 (7) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of section 263, the notice u/s 148 issued cannot be sustained thus set aside and quashed – petition allowed in favour of assessee. - W.P. No. 1347 of 2006 - - - Dated:- 5-4-2011 - SOUMITRA PAL J. JUDGMENT Soumitra Pal J.- In the writ petition, the petitioner, a company under the Companies Act, 1956, has challenged the reassessment notice dated March 31, 2006, issued by the Assistant Commissioner of Income-tax, Circle-5, Kolkata, respondent No. 2, under section 148 of the Income-tax Act, 1961 ("the Act" for short), for the assessment year 2001-02 and all proceedings relating thereto. It appears from the facts, as stated in the petition, that during the relevant assessment year, the petitioner carried on the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to issue appropriate direction. Thereafter, the Additional Commissioner of Income-tax directed respondent No. 3 to send the draft assessment order, which was duly sent by respondent No. 3 proposing to include the said speculation loss for the purpose of deciding the applicability of section 73 to the said business loss. Assailing the said proposal, the petitioner on February 20, 2004, made a written submission before the Additional Commissioner of Income-tax and oral hearing was granted. Thereafter, by direction dated March 23, 2004, under section 144A, the Additional Commissioner decided the issue regarding the applicability of the Explanation to section 73 and directed respondent No. 3 not to treat the share trading loss of Rs. 11,11,77 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reafter, the petitioner filed his objection to the recorded reasons on the ground that it was contrary to the Explanation to section 28 and section 43(5) and since assessment was made under the provisions of sections 143(3)/144A of the Act, wherein the question of applicability of the Explanation to section 73 of the Act as proposed in the recorded reasons by respondent No. 2 was disapproved by the higher authority by exercising its discretion under section 144A, the same issue could not be reopened or reexamined and could not be gone afresh or did not constitute a relevant material for formation of belief under section 147. Moreover, such reopening was violative of the directions under section 144A, which has a binding effect. After notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocate, appearing on behalf of the respondents, has submitted that since the directions under section 144A was limited to assessment and its purpose was to make assessment, the Department was justified in issuing the notice under section 148. Moreover, since the order dated September 22, 2006, by respondent No. 2 was an order in answer to the representation dated August 21, 2006, and since it raised fresh cause of action, no order may be passed. The question is whether the Department by taking recourse to the proceedings under section 147/148 can reopen an assessment which was done pursuant to the directions issued by the Additional Commissioner under section 144A. In order to answer the question it is necessary to refer to the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. The Assessing Officer shall now frame the assessment in the light of the directions contained in this order". Thereafter, on March 31, 2004, assessment order was passed under section 143/144A of the Act. However, after the assessment was made, respondent No. 2 had issued the impugned notice under section 148 of the Act. It is evident from the recorded reasons that respondent No. 2 is trying to reopen the assessment on the same ground on which earlier the Assessing Officer proceeded to assess before order under section 144A was passed. Now, the moot question is, in such circumstances can the Assessing Officer issue the notice under section 148 for reopening the assessment proceedings ? So far the facts are concerned it is evident f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Officer to go behind the find-ings given by a hierarchy of tribunals and even those of the High Court and the Supreme Court with his changing moods." Therefore, in view of the settled position of law and since in the instant case, the Department did not take steps to revise the order passed under section 144A by invoking the provisions of section 263, the impugned notice under section 148 of the Income-tax Act, 1961, dated March 31, 2006, issued by respondent No. 2, cannot be sustained and is, thus, set aside and quashed. Accordingly, all consequential proceedings are also set aside and quashed. The writ petition is allowed. No order as to costs. Urgent photostat certified copy of this order, if applied for, be furnished t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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