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TMI Blog2015 (1) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... le to tax has escaped assessment, he can assess or reassess such income – the AO has to record his reasons for belief and then issue notice u/s 148 - till the time available to the assessee for filing return u/s 139(4) has not expired, it cannot be said that any income has escaped assessment - such time has not expired on 30/03/2006 when the AO issued notice to the assessee u/s 148 and therefore, the action of the AO in issuing notice u/s 148 is not valid because no income has escaped assessment till that date - the proceedings initiated by AO by issuing notice u/s 148 is not valid and the assessment framed u/s 143(3)/148 is to be set aside – Decided in favour of asseesee. - ITA No. 229/LKW/2009 - - - Dated:- 5-9-2014 - Shri Sunil Kumar Yadav And Shri A. K. Garodia,JJ. For the Appellant : Shri P. K. Kapoor, C.A. For the Respondent : Shri Amit Nigam, D.R. ORDER Per A. K. Garodia, A. M. This is an assessee s appeal directed against the order passed by learned CIT(A)-I, Lucknow dated 24/02/2009 for the assessment year 2004-2005. 2. The concise/revised grounds raised by the assessee are as under: 1. BECAUSE proceedings under section 147 by issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illegal. (12) Because the appellant was not required to pay Advance Tax as per provision of the Income Tax Act and hence the direction to charge interest u/s 234B in the assessment order is illegal. remained unadjudicated upon. 3. Regarding the validity of the reassessment proceedings initiated by the Assessing Officer, it was submitted by Learned A.R. of the assessee in the written submissions that the reopening is not valid because the reasons for reopening were recorded on 30/03/2006 whereas the return for the present year could be filed by 31/03/2006 and on this date, the return has actually been filed also and therefore, it cannot be said that any income chargeable to tax has escaped assessment on 30/03/2006 when proceedings u/s 147 were initiated by issue of notice u/s 148 of the Act. For the sake of ready reference, the relevant paras of the written submissions being Para no. 5 to 7 are reproduced below: 5. Keeping in view the discussions as aforesaid and particularly the chronology of relevant dates and events as has been given in Para 2 hereinfore, it is seen that for initiating proceedings under section 147 reasons were recorded on 30.03.2006/ whereas the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income escaping assessment . In the absence of material which can lead to formation of such a nexus, the reasons recorded cannot be said to valid in the eyes of law. Reliance in this regard is placed on the following case laws:- (i) Sheo Nath Singh Vs. Appellate Asstt. Commissioner of Income-tax reported in (1971) 82 ITR147 (ii) ITO Vs. Lakhmani Mewal Das reported in (1976) 103 ITR 437(Supreme Court) (iii) Ganga Saran Sons P. Ltd. Vs. ITO reported in (1981) 130 ITR 1 and on decision of Hon'ble Allahabad High Court in the case of Indra Prastha Chemicals Ltd. Ltd. vs. CIT reported in (2004) 271 ITR 113 wherein after following the said case laws, their lordships have held as under:- Under section 147 of the Act the proceedings for the reassessment can be initiated only if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. The question whether the Assessing Officer had reasons to believe is not a question of limitation only but is a question of jurisdiction, a vital thing, which can always be investigated by the court in an application under article 226 of the Constitution as held in Daul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the Assessing Officer and the formation of his belief that there has been escapement of income of the assessee from assessment in the particular year. It is not any and every material, howsoever vague and indefinite or distant, remote and farfetched, which would warrant the formation of the belief relating to escapement of income of the assessee from assessment, as held by the Hon ble Supreme Court in the case of ITO v. Lakhmani Mewal Das [1976] 103 ITR 437. If there is no rational and intelligible nexus between the reasons and the belief, so that, on such reasons, no one properly instructed on facts and law could reasonably entertain the belief, the conclusion would be inescapable that the Assessing Officer could not have reason to believe. In such a case, the notice issued by him would be liable to be struck down as invalid as held in the case of Ganga Saran and Sons P. Ltd. v. ITO [1981] 130 ITR 1 (SC). Thus, it is well settled that the reason to believe under section 147 must be held in good faith and should have a rational connection and relevant bearing on the formation of the belief and should not be extraneous or irrelevant. Further, this court in proceedings und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee to furnish the return of income. Similarly as per the provisions of section 147, if the Assessing Officer has reason to believe that the income chargeable to tax has escaped assessment, he can assess or reassess such income. For this, the Assessing Officer has to record his reasons for belief and then issue notice u/s 148 of the Act. In our considered opinion, till the time available to the assessee for filing return u/s 139(4) has not expired, it cannot be said that any income has escaped assessment. In the present case, such time has not expired on 30/03/2006 when the Assessing Officer issued notice to the assessee u/s 148 and therefore, the action of the Assessing Officer in issuing notice u/s 148 is not valid because no income has escaped assessment till that date in the facts of the present case. Hence, we hold that in the present case, the proceedings initiated by Assessing Officer by issuing notice u/s 148 is not valid and as a consequence, the assessment framed u/s 143(3)/148 has no legs to stand and therefore, the same is quashed. 5.2 In view or our decision as per above Para, no adjudication is called for regarding the other grounds raised by the assessee. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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