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TMI Blog2022 (11) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... s under Section 147 of the Act of 1961 was not at all justified and thus without jurisdiction. In reply to the show cause notice the petitioners did not seek to challenge the re-opening on the ground that it was without jurisdiction since the assessment was not sought to be re-opened in the light of Section 153C -Having responded to the show cause notice and having contested the same, the petitioners have permitted the orders of assessment to be passed. It would have been a different matter had the petitioners challenged the notice issued under Section 148 seeking to re-open the proceedings at that stage itself. The petitioners permitted the authorities to proceed under Section 147 by responding to the notice. It is only after passing of the assessment orders that is now sought to be urged that the re-opening was without jurisdiction and it ought to have been only under Section 153C of the Act of 1961. We may not be understood to have stated that in no case could such challenge be raised to the jurisdiction to re-opening of the proceedings. However in the facts of the present cases when in the reply to the show cause notice such stand as regards lack of jurisdiction was not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... With regard to the Assessment Year 2015-16 a notice under Section 148 of the Act of 1961 dated 29.03.2021 was issued to the petitioner by the Income Tax Officer in which it was stated that he had reasons to believe that the income chargeable to tax for the Assessment Year 2015-16 had escaped assessment within the meaning of Section 147 of the Act of 1961. It was therefore proposed to assess/reassess the income/loss for the said Assessment Year. The petitioner was thus called upon to deliver a return in the prescribed form for the said assessment year. Accordingly the petitioner submitted his return on 22.01.2022. On 27.01.2022 a notice was issued to the petitioner under Section 143(2) read with Section 147 of the Act of 1961. As per annexures to the said notice the reasons for re-opening the case under Section 147 of the Act of 1961 were indicated. It was stated that the Assessment Officer collected/received information uploaded on Insight Portal and flagged as high risk CRIU/VRU information. The details mentioned were that search and seizure action was carried out in the case of M/s. Renuka Mata Multi-State Urban Co-operative Credit Society Limited. During the search it was notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transactions made through his bank account were without his knowledge was not accepted. The reply of the petitioner was found to be not acceptable. Accordingly the total income of the petitioner came to be assessed at Rs.8,45,05,360/- and it was directed to issue a demand notice as well as a penalty notice under Section 271 (1)(c) of the Act of 1961. Consequentially a notice for penalty was issued on the same day. The order of assessment as passed is under challenge in these writ petitions. 5. Shri Ram Heda, learned counsel for the petitioners submitted the respondents had no authority to re-open the assessment under Section 148 of the Act of 1961 for the reasons for which it was sought to be re-opened. According to him, since the re-opening of the assessment was pursuant to the search and seizure carried out in the case of M/s. Renuka Mata Multi-State Urban Co-operative Credit Society Limited the respondents ought to have proceeded under Section 153C of the Act of 1961. Despite the fact that the re-opening ought to have been done by invoking the provisions of Section 153C of the Act of 1961, recourse had been taken to the provisions of Section 148 of the Act of 1961. Inviting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Since there was no dispute on any factual aspects and as the jurisdiction had been wrongly assumed under Section 148 of the Act of 1961, the writ petitions were liable to be entertained on merits. The learned counsel also referred to the Notification dated 17.09.2020 issued by the Central Board of Direct Taxes to all the Principal Chief Commissioners of Income Tax as regards the procedure to be followed in the matter of search and seizure. The re-opening was contrary to the aforesaid procedure. It was thus prayed that the impugned orders of assessment be set aside as without jurisdiction. 6. Shri Anand Parchure, learned counsel for the respondents opposed the writ petitions by urging that an efficacious statutory remedy was available to the petitioners for being invoked. The remedy of appeal under Section 246 (1) of the Act of 1961 being available, there was no reason whatsoever to permit the petitioners to by-pass the same. Inviting attention to the reply filed on behalf of the respondents it was submitted that the reopening of the assessment under Section 148 of the Act of 1961 was justified. The Income Tax Officer had not received any books of account or documents or ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Deputy Commissioner of Income Tax certain data was collected. On verification, the Assessment Officer provided information of the persons in whose accounts held with M/s. Renuka Mata Multi-State Urban Co-operative Credit Society Limited large credits were seen. The petitioner is one of the depositors having account with the said Society. It is on the basis of this information received and enquiries made that there was reason to believe that there had been escapement of income. After obtaining necessary sanction under Section 151 of the Act of 1961, the said notice under Section 148 of the Act of 1961 came to be issued. 8. According to the petitioners, there was no jurisdiction to re-open the assessment under Section 148 of the Act of 1961. Since the re-opening was pursuant to the search and seizure operations carried out at M/s. Renuka Mata Multi-State Urban Co-operative Credit Society Limited and as the search was carried out prior to 01.04.2021, the jurisdiction under Section 153C ought to have been invoked. On the other hand, according to the respondents it is in view of the information shared by the Assistant Commissioner of Income Tax as well as the information uploaded on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch at M/s. Renuka Mata Multi-State Urban Co-operative Credit Society Limited in the case of the petitioner. We therefore find that it would necessary for the petitioners to contest and challenge the assessment orders on merits so as to substantiate the stand that the re-opening of the proceedings under Section 147 of the Act of 1961 was not at all justified and thus without jurisdiction. 9. Another relevant aspect to be considered is that in reply to the show cause notice the petitioners did not seek to challenge the re-opening on the ground that it was without jurisdiction since the assessment was not sought to be re-opened in the light of Section 153C of the Act of 1961. Having responded to the show cause notice and having contested the same, the petitioners have permitted the orders of assessment to be passed. It would have been a different matter had the petitioners challenged the notice issued under Section 148 of the Act of 1961 seeking to re-open the proceedings at that stage itself. The petitioners permitted the authorities to proceed under Section 147 by responding to the notice. It is only after passing of the assessment orders that is now sought to be urged that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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