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TMI Blog2020 (1) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... at Rs. 4,23,99,241/- as against the returned income of Rs. 2,53,93,897/-. It is for this reason that notice under Section 148 of the Act was served upon the petitioner. Thereafter, the petitioner vide letter dated 05.06.2019 sought reasons from the respondents in respect of "Reasons to believe that some income of the assessee has escaped assessment". The Department later on provided the petitioner with the reasons. 3. Thereafter, the petitioner raised objection against the decision of reassessment. The objection so raised by the petitioner was rejected by the AO vide communication dated 13.11.2019 giving intimation of the further proceeding with the matter. 4. The petitioner primarily challenges the order on the ground that notice under Section 148 of the Act initiating reassessment is barred by limitation and therefore, proceedings drawn is per se illegal. There was nothing which has been suppressed by the petitioner at the time of the assessment. There was nothing which the petitioner had not made available to the department at the time of submission of their return. Moreover, the documents which is said to have used for the purpose of reassessment of the income were already av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in income which has escaped assessment is not sustainable. 9. According to the petitioner, the action of reassessment by the respondents is also in contravention to the principles of law laid down by the Supreme Court in case of Commissioner of Income Tax Vs. Kelvinator of India Ltd. (2010) 320 ITR 561 SC and for all the aforesaid reasons, the counsel for the petitioner prays for quashment of the notice under Section 148 of the Act holding it to be barred by limitation. 10. Per contra, the counsel for the department opposing the petition submitted that a plain perusal of the reasons to believe provided by the department to the petitioner it would clearly reveal that there was sufficient tangible material found out in the course of scrutiny which has led to the initiation of the proceeding under Section 147 of the Act. According to the department, in the course of scrutiny it has been found that there has been payment by way of cash transaction of an amount of more than Rs. 87 Lakhs and where the transaction made were in cash exceeding Rs. 20,000/- in a day on the same person which is otherwise not allowed under Section 40(A)(iii) of the Act. It is this transaction made in cash tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requirement for reopening of assessment is of the Assessing Officer finding "Any income chargeable to Tax" having escaped assessment. The term any income, in the opinion of this court, would also include the informations provided by the assessee to the department and it could also be an information not submitted by the assessee, or had suppressed it. Nowhere under the provisions of Section 147, either in the main section nor under the proviso clause, so also neither under the explanations provided under this section, is there a bar for the department to initiate reassessment if the documents/records has already been submitted to the department at the time of assessment being made. Neither does the said provision anywhere envisages that once if the books of account has been scrutinized, the same cannot be scrutinized again for the purpose of initiating a proceeding under Section 147 of the Act. The documents having been submitted to the Assessing Officer at the first instance and the Assessing Officer having skipped/missed the said transaction from being assessed or having been overlooked, the same would not bar the department from initiating proceedings under Section 147 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome, profits or gains chargeable to tax had either been under assessed or escaped assessment and (b) that the ITO must have reason to believe that such escapement or under-assessment was occasioned by reason, of omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. Both these conditions must co-exist in order to confer jurisdiction on the Income Tax Officer. The Income Tax Officer is obliged, before initiating proceedings under Section 148 of the Act to record the reasons for the formation of his belief to reopen the assessment. 26. We are not persuaded to accept the argument of Mr. Sharma that the question regarding truthfulness or falsehood of the transactions reflected in the return can only be examined during the original assessment proceedings and not at any stage subsequent thereto. The argument is too broad and general in nature and does violence to the plain phraseology of Sections 147(a) and 148 of the Act and is against the settled law by this Court. We have to look to the purpose and intent of the provisions. 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 ..... t. Ltd. 2008(14)SCC 208, wherein in paragraph 19,20 and 21 held as under: "19. Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word reason in the phrase reason to believe would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. 20. As observed by the Delhi High Court in Central Provinces Manganese Ore Co. Ltd. v. ITO [1991 (191) ITR 662], for initiation of action under section 147(a) (as the provision stood at the relevant time) fulfillment of the two requisite conditions in that regard is essential. At that stage, the final outcome of the proceeding is not relevant. In other words, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng paragraphs, this court had dismissed the writ petitions. The said judgment of Single Bench was subsequently subjected to challenge in Writ Appeal also being WA No.336 of 2019 and the Division Bench on 29.07.2019 dismissed the Writ Appeal affirming the order passed by the Single Bench. 22. The phrase "Reasons to Believe" does not mean that the Assessing Officer should have ascertained the facts by legal evidence. All that is required is that, the Assessing Officer should prima facie have some material on the basis of which there should be reasons to believe of certain incomes chargeable to tax escaping assessment. There need not be any concrete evidence or proof available for coming to a final conclusion. It is only an initiation of proceedings of reassessment where the assessee gets a chance to put forth their defence, explanation and justification which would further be scrutinized by the Assessing Officer while reaching to the final conclusion. One should not loose sight of the fact that the final assessment on the conclusion of a proceedings under Section 147 of the Act is also an appealable order wherein also the assessee has a right to agitate or challenge the order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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