TANMAC India v. Dy. CIT

INCOME TAX ACT, 1961

--Reassessment--Notice under section 148Return processed originally under section 143(1)--Material forming basis of reopening was already a part of record--Where, after issuing intimation under section 143(1), AO did not issue a notice under section 143(2), the obvious conclusion would be that he did not consider it necessary or expedient to do so, the inference being that the return of income was in order, therefore, issuance of notice under section 148 in the absence of any new or tangible material was an arbitrary exercise of power and a review of proceedings impermissible in law.--Assesee filed return of income pursuant to which intimation dated 1-12-1998 under section 143(1)(a) was issued. Subsequently, a notice under section 148 was issued during 2002, taking advantage of extended limitation of four years to reassess income on the basis of the same materials that were available with AO as part of the record.Held: Since AO, after issuing intimation under section 143(1), did not issue a notice under section 143(2), the obvious conclusion would be that he did not consider it necessary or expedient to do so, the inference being that the return of income was in order. Having missed the bus earlier, AO could not be permitted to avail of the extended time limit in the absence of any new or tangible material, when the time for scrutiny assessment has elapsed on 31-3-2001, prior to issuance of notice under section 148. Also the intimation dated 1-2-1998 had been issued manually, being prior to the electronic era which came into force on and with effect from 2003. AO had thus, evidently applied his mind to the return and annexures even at that state. Issuance of notice under section 148 was, therefore, an arbitrary exercise of power and a review of proceedings impermissible in law.