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The Tax Publishers2013 TaxPub(DT) 0560 (Kol-Trib) : (2013) 051 (II) ITCL 0219 : (2013) 151 TTJ 0545 : (2013) 081 DTR 0386 INCOME TAX ACT, 1961 --Reassessment--Reason to believe Absence of rational belief--Assessment was reopened by assessing officer on the ground that the discrepancy between professional income declared by the assessee and the professional income as per TDS certificates was at variance, and it, therefore, requires verification to find out whether any taxable income has escaped assessment for assessment year 2005-06 and 2006-07 both. *Held:* Was not justified as there was nothing in the reasons to indicate that there was an escapement of income, but at the most, need to verify that the reasons of discrepancy between income from profession as per return of income vis-a-vis as per the certificates of TDS. The mere fact that matter needs to be verified and deserves to be examined can never be a reason good enough to believe, even if it was a good reason to suspect so, that income has escaped assessment, and therefore, a reason not good enough to invoke the reassessment proceedings. The condition precedent for invoking section 147 not satisfied. regard to assessment year 2006-07, Therefore, the professional receipts as per the P&L a/c were far more than aggregate of professional receipts as per TDS certificates. In this view of the matter, it is difficult to understand as to how can anyone form belief, or even a suspicion, that an income has escaped assessment. The income which is offered to tax is clearly more than the income as per the TDS certificates. It is, therefore, a clear case of non-application on this aspect of the matter and, in any case, the reassessment proceedings have been initiated on need for verification of cannot be a legally sustainable reason for reopening a completed assessment even under section 143(1). Income Tax Act, 1961 Section 147 In the ITAT, Kolkata B Bench Pramod Kumar, A.M. & Mahavir Singh, J.M. Meheria Reid & Co. v. ITO ITA Nos. 53 & 54/Kol/2010 A.Y. 2005-06 & 2006-07 28 December, 2012 Income-tax Act, 1961, s. 147; In favour of: Assessee Appellant by : A.K. Tibrewal Respondent by : R. P. Nag ORDER *Pramod Kumar, A.M.* This is second round of proceedings, in these cases, before this Tribunal. Originally, all these appeals, along with Revenues appeal for the assessment year 2006-07 i.e., ITA No. 119/Kol/2010, were disposed of vide order dated 24-2-2012 by a Bench consisting of brothers Shri N. Vijaykumaran, JM (as he then was), and Shri C. D. Rao, AM (as he then was). However, aggrieved by the order so passed by the Tribunal, assessee carried the matter in further appeal before the Honble Calcutta High Court, and their Lordships were pleased to remit the matter back to this Tribunal vide judgment dated 1-5-2012 wherein their Lordships have, inter alia, observed as follows : 'After going through the impugned judgment and order of the learned Tribunal, we have noticed that the learned Tribunal has not decided the question of jurisdiction at all. There was no discussion or reason. The question of jurisdiction admittedly goes to the very root of the matter. We feel, as has rightly been pointed out by Mr. Khaitan, that this question has to be decided first. After deciding the said question first, if the learned Tribunal feels that the matter may be decided on merit, the Tribunal can do so. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 0560 (Kol-Trib) : (2013) 051 (II) ITCL 0219 : (2013) 151 TTJ 0545 : (2013) 081 DTR 0386

INCOME TAX ACT, 1961

--Reassessment--Reason to believe Absence of rational belief--Assessment was reopened by assessing officer on the ground that the discrepancy between professional income declared by the assessee and the professional income as per TDS certificates was at variance, and it, therefore, requires verification to find out whether any taxable income has escaped assessment for assessment year 2005-06 and 2006-07 both. Held: Was not justified as there was nothing in the reasons to indicate that there was an escapement of income, but at the most, need to verify that the reasons of discrepancy between income from profession as per return of income vis-a-vis as per the certificates of TDS. The mere fact that matter needs to be verified and deserves to be examined can never be a reason good enough to believe, even if it was a good reason to suspect so, that income has escaped assessment, and therefore, a reason not good enough to invoke the reassessment proceedings. The condition precedent for invoking section 147 not satisfied. regard to assessment year 2006-07, Therefore, the professional receipts as per the P&L a/c were far more than aggregate of professional receipts as per TDS certificates. In this view of the matter, it is difficult to understand as to how can anyone form belief, or even a suspicion, that an income has escaped assessment. The income which is offered to tax is clearly more than the income as per the TDS certificates. It is, therefore, a clear case of non-application on this aspect of the matter and, in any case, the reassessment proceedings have been initiated on need for verification of cannot be a legally sustainable reason for reopening a completed assessment even under section 143(1).

Income Tax Act, 1961 Section 147

In the ITAT, Kolkata B Bench

Pramod Kumar, A.M. & Mahavir Singh, J.M.

Meheria Reid & Co. v. ITO

ITA Nos. 53 & 54/Kol/2010

A.Y. 2005-06 & 2006-07

28 December, 2012

Income-tax Act, 1961, s. 147; In favour of: Assessee

Appellant by : A.K. Tibrewal

Respondent by : R. P. Nag

ORDER

Pramod Kumar, A.M.

This is second round of proceedings, in these cases, before this Tribunal. Originally, all these appeals, along with Revenues appeal for the assessment year 2006-07 i.e., ITA No. 119/Kol/2010, were disposed of vide order dated 24-2-2012 by a Bench consisting of brothers Shri N. Vijaykumaran, JM (as he then was), and Shri C. D. Rao, AM (as he then was). However, aggrieved by the order so passed by the Tribunal, assessee carried the matter in further appeal before the Honble Calcutta High Court, and their Lordships were pleased to remit the matter back to this Tribunal vide judgment dated 1-5-2012 wherein their Lordships have, inter alia, observed as follows :

'After going through the impugned judgment and order of the learned Tribunal, we have noticed that the learned Tribunal has not decided the question of jurisdiction at all. There was no discussion or reason. The question of jurisdiction admittedly goes to the very root of the matter. We feel, as has rightly been pointed out by Mr. Khaitan, that this question has to be decided first. After deciding the said question first, if the learned Tribunal feels that the matter may be decided on merit, the Tribunal can do so.