notice u/s 148,even though appeal is pending

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 February 2011 notice u/s 148 is given on 8 feb 2011, to my co,loss declared Rs 21.31 crore in return u/s 139, regarding A/Y 2006/07,assessment order u/s 143(3)passed on 12/12/2008, appeal filed against 143(3) order on 22 jan 2009, appeal is still pending ,
So what is the course of action against the notice u/s 148 for reassessment ,with no reasons?
Reply asap.

Guest

Guest (Expert)

09 February 2011 During the pendency of appeal, notice u/s 148 can be issued.

Querist : Anonymous

Querist : Anonymous (Querist)

09 February 2011 can you elaborate with some case laws

Guest

Guest (Expert)

09 February 2011 Provisions of Sec. 147/148 are very much clear in this matter. Please go through provisions and let me know if you find any contrary.

Querist : Anonymous

Querist : Anonymous (Querist)

10 February 2011 Notice u/s. 148 can not be issued untill and unless the 143(3) is completed. Even if you are in appeal, the AO should complete the assessment. If you are not attending the proceedings he can assess the income u/s. 144. But no 147 can be given. Notice issued for reassessment will be illegal and invalid as the proceeding for original assessment is still open.

[2004] 140 TAXMAN 16 (BOM.)
HIGH COURT OF BOMBAY
Ador Technopack Ltd.
v.
Dr. Zakir Hussein, Deputy Commissioner
V.C. DAGA AND J.P. DEVADHAR, JJ.
WRIT PETITION NO. 2228 OF 2003
MARCH 31, 2004
Assessing Officer cannot reopen assessment on account of
income escaping assessment, especially, when Commissioner
has reopened assessment by setting aside original one and
on remand, proceedings are pending before Assessing
Officer for assessment afresh
Section 147, read with sections 148 and 263, of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts - Assessment year 1996-97 - Whether concept of ‘reason to believe’ comes into picture only if income chargeable to tax has escaped assessment - Held, yes - Whether once order of assessment to extent it relates to under-assessment of an item is set aside and proceedings are remanded to Assessing Officer, their, assessment proceedings in respect of that item are pending so long as final assessment does not take place - Held, yes - Whether so long as assessment is pending, Assessing Officer cannot have any reason to believe that income chargeable to tax for assessment year in question has escaped assessment - Held, yes - Whether income cannot be said to have escaped assessment within meaning of section 147, if assessment proceedings in respect of that income and/or issue are still pending and have not yet been culminated into a final order - Held, yes - Whether if conclusive and final judicial decision is holding field then, identical issue cannot be a subject-matter of administrative decision under sections 147 and 148 - Held, yes - Whether Assessing Officer can reopen assessment on account of income escaping assessment, especially, when Commissioner has reopened assessment by setting aside original one and on remand, proceedings are pending before Assessing Officer for assessment afresh - Held, no
Words and phrases - ‘reasons to believe’ as occurring in section 147 of the Income-tax Act, 1961

So long as the assessment is pending, the assessing authority cannot have any such reason to believe that income chargeable to tax for the assessment year in question has escaped assessment. Income cannot be said to have escaped assessment within the meaning of this section if the assessment proceedings in respect of that income and/or issue are still pending and have not yet been culminated into a final order. This question came up for consideration before the Supreme Court in the case of Ghanshyamdas (supra). Relying on the decision of the Calcutta High Court in the case of Lachhiram Basantalal, In re AIR 1931 Cal. 545 and of the Judicial Committee in Sir Rajendranath Mukerjee v. CIT [1934] 2 ITR 71 (PC), it was laid down that if the assessment proceedings have been initiated, the income cannot be said to have escaped assessment until a final order of assessment is passed on the pending proceedings. Income cannot be said to have escaped assessment when the assessment proceedings are still pending

BAPALAL & CO. EXPORTS v. Joint Commissioner of Income-tax

Income escaping assessment - Issue of notice for - Assessment year 2000-01 - Assessing Officer issued a notice under section 148 merely after three years of completion of assessment - Said notice was issued without assigning any reason justifying its issuance nor there was any fresh material to reopen assessment - Whether impugned notice, being violative of mandatory provisions of section 148(2), was to be set aside - Held, yes FACTS For the assessment year 2000-01, the assessee-firm filed its return of income on 13-11-2000. The assessment was completed under section 143(1) on 4-1-2002. While the rectification proceeding were pending on 19-3-2005 the Assessing Officer a notice under section 148 to the assessee seeking to reopen the assessment of relevant assessment year. The assessee filed instant petition praying to quash the impugned notice on ground that the notice issued nearly three years after the assessment and that too, without disclosing any reason, was in violation of the mandatory provision under section 148(2). The assessee further submitted that the reopening of assessment was without jurisdiction as the same was not based on any fresh material found out by the revenue and the facts now disputed were all part of the records while filing the income-tax return. HELD After a series of transactions, the respondent, without assigning any reason, had passed the impugned order on 31-3-2006 reopening the assessment, without any fresh material. As per the proviso to section 143(2), if at all any notice, such as the impugned notice had to be issued, it should not be issued after the expiry of twelve months from end of the month in which the return was furnished. In the instant case, the impugned notice had been issued by the respondent after the expiry of nearly three years. Further, from the settled legal proposition as found from one of the rulings of the Supreme Court, once an opinion is given in an assessment, it cannot be reopened by any other authority except on fresh material. That apart, a notice issued under section 148 should be a reasoned one whereas in the instant case the impugned notice had been issued without assigning any reason justifying its issuance. Also, in the absence of any new material, the Assessing Officer was not empowered to reopen an assessment irrespective of the fact whether it was made under section 143(1) or 143(3). As per the rulings of the Apex Court in this regard, there must always be a speaking order whereas the respondent had neither chosen to adduce any reason nor found any fresh material to re-open the assessment’

In the absence of any new material, the Assessing Officer is not empowered to re-open an assessment irrespective of the fact whether it is made under Section 143(1) or 143(3) of the Act. As per the rulings of the Apex Court in this regard, there must always be a speaking order whereas the respondent has neither chosen to adduce any reason nor found any fresh material to re-open the assessment.

Gkn Driveshafts (India) Ltd. vs Income Tax Officer
We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under Sed
ction 148 of the Income Tax Act is issued, the proper course of action for the notice is to file return and if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the notice is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order.

Kindly give your view on the findings

Guest

Guest (Expert)

10 February 2011 Mr. expert where is the question of assessment proceeding u/s 143(3) in the query.

Querist : Anonymous

Querist : Anonymous (Querist)

11 February 2011 In the query it is mentioned that appeal against order u/s 143(3) is pending , so in that case , if appeal is pending can notice of reassessment u/s 148 be issued or not ?
If yes tell me some case laws ,as, the cases which i ve mentioned it is stated that no notice of reassessment u/s 148 during pendency of appeal .

Guest

Guest (Expert)

14 February 2011 [2004] 140 TAXMAN 16 (BOM.)
HIGH COURT OF BOMBAY
Ador Technopack Ltd.
v.
Dr. Zakir Hussein, Deputy Commissioner
V.C. DAGA AND J.P. DEVADHAR, JJ.
WRIT PETITION NO. 2228 OF 2003
MARCH 31, 2004 is no more relevant as in this case, assessment proceeding is pending, not the appeal proceeding.

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Guest

Guest (Expert)