Commissioner Of Income-tax-II, Kanpur v. M/S Mirza International Ltd
[Citation -2014-LL-0923-42]
| Citation | 2014-LL-0923-42 |
|---|---|
| Appellant Name | Commissioner Of Income-tax-II, Kanpur |
| Respondent Name | M/S Mirza International Ltd. |
| Court | HIGH COURT OF ALLAHABAD |
| Relevant Act | Income-tax |
| Date of Order | 23/09/2014 |
| Assessment Year | 2001-02 |
| Judgment | View Judgment |
| Keyword Tags | reassessment proceedings • change of opinion • reason to believe |
| Bot Summary: | On 05.05.2014, a coordinate Bench has admitted the present appeal on the following substantial question of law: Whether the Tribunal is legally justified in quashing the initiation of proceeding under section 147 on the ground that the notices were issued beyond four years without mentioning in the reason recorded by the assessing authority that there was failure on the part of the asessee to disclose fully and truly all material facts necessary for the assessment, as such the notice under section 148 is not valid We find that the return of income was furnished by the assessee on 31.10.2001 and the assessment was framed by the Assessing Officer under Section 143(3) of the Income Tax Act on 18.03.2004. The notice under Section 148 of the Income Tax Act, was issued by the Assessing Officer on 31.03.2007 after a period of four years from the end of the relevant assessment year. First, he must have reason to believe that the income of the assessee has escaped assessment and secondly, he must have reason to believe that such escapement is by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. The Court, of course, cannot investigate into the adequacy or sufficiency of the reasons which have weighed with the Income Tax Officer in coming to the belief, but the Court can certainly examine whether the reasons are relevant and have a bearing on the matters in regard to which he is required to entertain the belief before he can issue notice under section 147. It there is no rational and intelligible nexus between the reasons and the belief, so that, on such reasons, no one properly instructed on facts and law could reasonably entertain the belief, the conclusion would be inescapable that the Income Tax Officer could not have reason to believe that any part of the income of the assessee had escaped assessment and such escapement was by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts and the notice issued by him would be liable to he struck down as invalid. In Phool Chand Bajrang Lal and another Vs. Income Tax Officer and another, 203 ITR 456 the Supreme Court held:- From a combined review of the judgments of this Court, it follows that an Income-tax Officer acquires jurisdiction to reopen assessment under Section 147(a) read with Section 148 of the Income Tax 1961 only if on the basis of specific, reliable and relevant information coming to his possession subsequently, he has reasons which he must record, to believe that by reason of omission or failure on the part of the assessee to make a true ana full disclosure of all material facts necessary for his assessment during the concluded assessment proceedings, any part of his income, profit or gains chargeable to income tax has escaped assessment. Since, the belief is that of the Income-tax Officer, the sufficiency of reasons for forming the belief, is not for the Court to judge but it is open to an assessee to establish that there in fact existed no belief or that the belief was not at all a bona fide one or was based on vague, irrelevant and non-specific information. |