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TMI Blog2001 (5) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ing an income of Rs. 66,720. He also claimed refund of Rs. 12,145 towards the advance tax paid during the relevant year. The Assessing Officer finalised the assessment under section 143(1)(a) and granted refund in terms of the prayer made by the petitioner. Thereafter, he issued notice annexure P-2, dated January 31, 2000, and called upon the petitioner to file a return for the assessment of the income which had escaped assessment. In response to the notice, the petitioner filed the return annexure P-3, dated March 1, 2000, showing his income at Rs. 66,720. Thereafter, vide annexure P-4 the Despondent conveyed the reasons for reopening the assessments The same read as under "Reasons for issuing notice under section 148 : It has been lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allegation of suppression of cost of construction contained in the reasons supplied by the respondent is false and vexatious because the plot is vacant and no construction has been made over it. In his written statement, the respondent has prayed for dismissal of the writ petition by asserting that it is pre-mature. He has averred that no order adversely effecting the petitioner has been passed so far and, therefore, he cannot seek intervention of the court at this stage. On the merits it has been averred that the petitioner had purchased shop plot for a much higher price than the one specified in the sale deed and it had been done with a view to avoid the payment of tax. According to the respondent, the impugned notice was issued in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed ; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139. (2) The Assessing Officer, shall before issuing any notice under this section, record his reasons for doing so." The ambit and scope of the above reproduced sections was considered by the Supreme Court in Phool Chand and Bajrang Lal v. ITO [1993] 203 ITR 456. After reviewing several judicial precedents on the subject, a two-judge Bench of the Supreme Court held as under: "From a combined review of the judgments of this court, it follows that an Income-tax Officer acquires jurisdiction to reopen an assessment under section 147(a) read with section 148 of the Income-tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material had any rational confection or a live link for the formation of the requisite belief. It would be immaterial whether the Income-tax Officer, at the time of making the original assessments could or could not have found by further enquiry or investigation, whether the transaction was genuine or not if, on the basis of subsequent information, the Income-tax Officer arrives at a conclusion, after satisfying the twin conditions prescribed in section 147(a) of the Act, that the assessee had not made a full and true disclosure of the material facts at the time of original assessment and, therefore, income chargeable to tax had escaped assessment ... One of the purposes of section 147 appears to us to be to ensure that a party cannot ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by him is based on no material justifying intervention by the court at this stage. A reading of annexure P-4 shows that the main factor which prevailed with the respondent for initiating action under section 148 was that although the price of the plot shown in the registration deed is Rs. 3,00,000, the petitioner had paid stamp duty on the premise that the price of the property is Rs. 4,60,000 and this was indicative of an attempt to suppress correct information about his income. In our opinion, this alone could constitute a valid ground for forming a prima facie opinion that the assessee's income bad escaped assessment warranting initiation of proceedings under section 148 of the Act. Therefore, we do not find any justification to quash th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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