9911796707
TMI Blog1991 (1) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... fit and loss account as well as the balance-sheet ; other details were also furnished. The assessing authority (the respondent) had accepted the returns and made orders of assessment accordingly. Subsequently, the impugned notices were issued. Since assessment orders had already been made, the petitioners sought the reason behind the issuance of the notices. The petitioners were informed that their cases were selected under the scheme of selective scrutiny cases and, therefore, notices were issued. According to the petitioners, without proper and valid reopening of the assessment, no fresh proceedings could be commenced with reference to the completed assessments ; the notice under section 143(2)(b) should be preceded by the opinion formed by the Income-tax Officer that the return filed by the assessee was incorrect and incomplete ; since no such opinion is formed and there is no material to form such an opinion, the notices issued were without jurisdiction ; the petitioners further contend that, in the notices, the respondent has not specified the point upon which the petitioners had to produce the evidence. Section 143(2) reads thus : 143(2) Where a return has been made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri Sarangan, learned counsel for the petitioners, contended that a completed assessment cannot be reopened in the manner it is sought to be done in the instant case, and the assessments being the result of quasi-judicial proceedings, relevant material should exist and had to be disclosed before taking any action to put an end to the finality of the assessment orders. Learned counsel referred to section 147 of the Act which is an analogous provision wherein a completed assessment can be reopened only if the Income-tax Officer forms a reasonable belief about the escapement of the assessee's income from tax and if so, why should there be a different procedure vesting an unbridled discretion in the Income-tax Officer under section 143(2)(b) which, in effect, is reopening of a completed assessment. The Revenue has largely relied on the new scheme introduced for summary assessments in which selective cases only may be taken up for scrutiny and, in other cases, the assessee's returns are to be accepted. The two relevant circulars placed before me read as follows : 438. Summary assessment scheme-Steps taken for accelerating the pace of assessment without appearing befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the Commissioners' Conference, 1985, certain recommendations were made to speed up the disposal of income-tax assessments with the manpower available and to reduce the ever increasing backlog. The recommendations made in this Conference have been examined by the Board and I am directed to say that in supersession of all existing instructions on the subject, the following procedure will now be adopted. 2. Assessments in the following types of cases will be completed under section 143(1) on the basis of the returns after linking them with the assessment record. All cases, other than company and trust cases, with returned income/ loss up to ₹ 1 lakh. Company cases with returned income/loss up to ₹ 25,000 and paid up capital not exceeding ₹ 5 lakhs. However, the first assessment in all new company cases will be a scrutiny assessment. All trust cases and cases of charitable institutions having income below ₹ 1 lakh before applying the provisions of section I 1 provided the corpus of the trust does not exceed ₹ 5 lakhs. However, the first assessment in all trust cases will be a scrutiny assessment. 3. In the above cases, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 89. The new scheme adopted by the Revenue basically reposes faith in assessees and expects them to disclose full particulars of their income and claim only proper deductions; this procedure referred as summary assessment procedure reduces the volume of the department's work as otherwise the time of the authorities would be spent in scrutinising each and every return of income irrespective of the income ; similarly, a large number of assessees are saved the trouble of attending to their cases at the time of scrutiny. However, a likelihood of a scrutiny under section 143(2) would always act as a deterrent against an assessee taking undue advantage of the scheme by filing incorrect returns. The scheme is beneficial and is a liberal scheme from the point of view of the assessees. Its success depends on the honesty of the assessees ; the faith reposed in the assessees has to be properly reciprocated by them. The power vested in the authorities to verify the correctness and completeness of the return requiring the presence of the assessee or the production of evidence, if the Income-tax Officer considers it necessary or expedient, is a salient provision to effectuate th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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