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TMI Blog2019 (4) TMI 2162X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be deleted. III. The appellant craves the leave to add, substitute, modify, delete or amend all or any ground of appeal either before or at the time of hearing." 2. The Ld. CIT (A) decided the issue of the Jurisdiction u/s 148 of the ACT against the assessee by citing the following reasons paragraph 5.4 to 5.7. "5.4 The issue was again examined by the apex court in the case of Assistant Commissioner of Income tax v Rajesh Jhaveri Stock Brokers (P.) Ltd (SC) wherein it was held as under: "16. Section 147 authorises and permits the AO to assess or reassess income chargeable to tax if he has reason to believe that income far any assessment year has escaped assessment. The word "reason" in the phrase "reason to believe" would mean cause or justification, if the AO 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 he read to mean that the AO should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Off leer is to administer the statute with .solicitude for the public exchequer with an inbuilt id ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble Courts in the judgments mentioned above have clearly held that formation of belief by the AO is within the realm of subjective satisfaction and it is not necessary for the AO to conclusively prove the escapement of income before initiating proceedings u/s 147. Therefore, it is held that the AO had reasons to believe that income had escapement assessment and he was within his competence to invoke the powers contained in section 147 to initiate reassessment of the income of the appellant. 5.6 As per Section 147:, "For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148." 5.7 It is thus clear that the AO can assess such income for which 147 has been used and any other income which comes to his notice subsequently in the course of proceedings. In view thereof, proceedings u/s 148 are perfectly in order. The ground of ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the second round of proceedings before the Income-tax Officer who completed reassessment afresh on March 28,1970. No such grounds was taken originally in dispute was taken at the same time of hearing before the Appellate Assistant Commissioner, In view of the latest decision of the Supreme Court in the case of Jute Corporation of India Ltd., it cannot be disputed that the assessee could have raised this ground before the Appellate Assistant Commissioner in his appeal against the first order of reassessment. The pertinent question is whether the new ground could be taken in reassessment proceedings after remand. This takes us another aspect of the question, namely, whether the assessee could have taken such a ground before the Income-tax Officer himself in these proceedings because if he could have done so, the power of the Appellate Assistant Commissioner being coterminous, it would be open to him to do so before the Appellate Assistant Commissioner as well. The other aspect would be whether being a ground challenging the very jurisdiction to make reassessment, such a ground could be taken before any authority and any stage of the proceedings. In this context, it will be necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ha Iyer v. CIT [1966] 60 ITR 647. The said decisions was followed by the Gujarat High Court in CIT v. Nandalal Tribhovandas [1975] 100 ITR 734. We are in respectful agreement with the view taken by the Madras Gujarat High Court in this regard. If it is found that the Income-tax Officer had no jurisdiction to make an order of reassessment, it is irrelevant that the jurisdiction of the Income-tax Officer to reassess was not challenged at any of the earlier stages. The assessee was entitled to challenge the jurisdiction of the Income-tax Officer to initiate reassessment proceedings before the Appellate Assistant Commissioner in the second round of proceedings even though he had not raised it earlier before the Income-tax Officer or in the earlier appeal The Calcutta High Court has taken the view in the case of CIT v. Shree Ganesh Jute Mills Ltd [1977] 109 ITR 562 that any new ground, not necessarily a ground pertaining to jurisdictional aspect, could be taken for the first time before the Appellate Assistant Commissioner in the second round of proceedings. But, for the present we need not go that far. We leave this question open. 27. In the light of the discussion above, we answer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, 2002 Landmark Communication (P) Ltd. Jai Laxmi Cooperative Bank Standard Chartered Bank Connaught Place 2,50,000/- 12, January, 2002 Saurabh Petrochem (P) Ltd. Jai Laxmi Cooperative Bank Standard Chartered Bank Connaught Place 2,50,000/- 12, January, 2002 Profan Finance & Investments Jai Laxmi Cooperative Bank Since the assessee has received entries, I have reason to believe that income of the assessee to extent of Rs. 12,50,000/- has escaped assessment for which action u/s 148 of the Income Tax Act is initiated for the A.Y. 2002-03." 10. The Ld. CIT (A) decided the issue of the Jurisdiction u/s 148 of the ACT against the assessee by citing the following reasons paragraph 5.4 to 5.7. "5.4 The issue was again examined by the apex court in the case of Assistant Commissioner of Income tax v Rajesh Jhaveri Stock Brokers (P.) Ltd (SC) wherein it was held as under: "16. Section 147 authorises and permits the AO to assess or reassess income chargeable to tax if he has reason to believe that income far any assessment year has escaped assessment. The word "reason" in the phrase "reason to believe" would mean cause or justification, if the AO has cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. 20. So long as the ingredients of section 147 are fulfilled, the AO is free to initiate proceeding under section 147 and, failure to take steps under section 143(3) with the AO powerless to initiate reassessment proceedings even when intimation 143(1) had been issued." 5.5 The Hon'ble Courts in the judgments mentioned above have clearly held that formation of belief by the AO is within the realm of subjective satisfaction and it is not necessary for the AO to conclusively prove the escapement of income before initiating proceedings u/s 147. Therefore, it is held that the AO had reasons to believe that income had escapement assessment and he was within his competence to invoke the powers contained in section 147 to initiate reassessment of the income of the appellant. 5.6 As per Section 147:, "For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le on record and the Judgments relied upon by the parties before us. The reasons for reopening are given in the paperwork by the assessee and the content of which are reproduced herein above which clearly shows that the assessing officer at the time of issuance of notice under section 148 had only considered the report of the investigation. It is incumbent upon the assessing officer to apply independently mind and examine the information came to him from the investigation Wing and after examining the correctness and reliability of the information independently the assessing officer was required to issue the noticed under section 148 to the assessee. In the present case needful was not done. Therefore we have no other option but to hold that the notice issued under section 148 was not in accordance and law and hence proceeding based on this satisfaction are required to set aside. We also find that the verbatim of the satisfaction written in the case of Sarthak Securities Co. Pvt. Ltd., and in the case of the assessee are similar and de void of any iota of "satisfaction" derived by the Assessing Officer. We also draw our strength from the decision of Sarthak Securities Co. Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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