Dy. CIT v. Sambhav Energy Ltd.

SUBSCRIBE FOR FULL CONTENT


The Tax Publishers2017 TaxPub(DT) 1142 (Raj-HC) : (2017) 295 CTR 0460 Dy. CIT v. Sambhav Energy Ltd. INCOME TAX ACT, 1961 --Reassessment--Reason to believeIncome escaping assessment----Where AO though was not having fresh material for the purpose of formation of belief that income of any particular assessment year had escaped assessment, but with all bona fides we noticed that certain documents escaped consideration and that resulted into escapement of income chargeable to tax, re-opening was justified.--A search and survey were simultaneously conducted by investigation wing of IT department at business/residential premises of 'A' group which covered assessee. Assessment was completed under section 153A read with section 143(3). AO, while recording reasons issued notice under section 148 which was responded by assessee with certain objections. In a writ petition, Single Judge accepted assessee's version with finding that notice did not satisfy prerequisites. Revenue filed appeal before Doable Bench of High Court. *Held:* From perusal of the notice, it was apparent that the reason to believe that the income chargeable to tax had escaped assessment, was not mere suspicion but was based on good faith. The AO had given complete details of the documents which were not taken into consideration earlier. The documents referred to in the notice were also sufficient to show the direct nexus between the information in possession and conclusion withdrawn by the AO. The AO though was not having fresh material for the purpose of formation belief that the income of any particular assessment year had escaped assessment, but with all bona fides he noticed that certain documents escaped consideration and that resulted into escape of income chargeable to tax. Court opined that Single Bench had not looked into the notices under section 148 so minutely. It was held that AO had adequate reason to believe to issue notice under section 148. Single Bench failed to appreciate the notice concerned in the light of scope and spirt of pre-conditions of issuing a notice under section 148. Writ petitions preferred by assessee were dismissed. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2017 TaxPub(DT) 1142 (Raj-HC) : (2017) 295 CTR 0460

Dy. CIT v. Sambhav Energy Ltd.

INCOME TAX ACT, 1961

--Reassessment--Reason to believeIncome escaping assessment----Where AO though was not having fresh material for the purpose of formation of belief that income of any particular assessment year had escaped assessment, but with all bona fides we noticed that certain documents escaped consideration and that resulted into escapement of income chargeable to tax, re-opening was justified.--A search and survey were simultaneously conducted by investigation wing of IT department at business/residential premises of 'A' group which covered assessee. Assessment was completed under section 153A read with section 143(3). AO, while recording reasons issued notice under section 148 which was responded by assessee with certain objections. In a writ petition, Single Judge accepted assessee's version with finding that notice did not satisfy prerequisites. Revenue filed appeal before Doable Bench of High Court. Held: From perusal of the notice, it was apparent that the reason to believe that the income chargeable to tax had escaped assessment, was not mere suspicion but was based on good faith. The AO had given complete details of the documents which were not taken into consideration earlier. The documents referred to in the notice were also sufficient to show the direct nexus between the information in possession and conclusion withdrawn by the AO. The AO though was not having fresh material for the purpose of formation belief that the income of any particular assessment year had escaped assessment, but with all bona fides he noticed that certain documents escaped consideration and that resulted into escape of income chargeable to tax. Court opined that Single Bench had not looked into the notices under section 148 so minutely. It was held that AO had adequate reason to believe to issue notice under section 148. Single Bench failed to appreciate the notice concerned in the light of scope and spirt of pre-conditions of issuing a notice under section 148. Writ petitions preferred by assessee were dismissed.