Commissioner of Income-tax v. Vaibhav Casting Pvt. Ltd
[Citation -2017-LL-0718-4]

Citation 2017-LL-0718-4
Appellant Name Commissioner of Income-tax
Respondent Name Vaibhav Casting Pvt. Ltd.
Court HIGH COURT OF ALLAHABAD
Relevant Act Income-tax
Date of Order 18/07/2017
Judgment View Judgment
Keyword Tags regular assessment • change of opinion • reason to believe • revised return • reopening of assessment • issuance of intimation • income escaping assessment
Bot Summary: 2 Thereafter, a notice under Section 148 of the Act was given on 30.01.2001 on the ground that the income of the respondent- assessee has escaped assessment and therefore, proceedings for re-assessment are necessary. Thereafter, the Assessing Officer proceeded to pass re-assessment order on 19.03.2002 under Section 143(3) of the Act. The submission of Sri Gaurav Mahajan, learned counsel for the appellant, is that the question of change of opinion does not arise inasmuch as there was no order of regular assessment under Section 143(3) and that the acceptance of the return under Section 143(1) is in the nature of acknowledgment wherein no opinion is expressed by the Assessing Officer. The Tribunal in recording the finding that it was a case of change of opinion and therefore, the proceedings are bad in law observed that the Assessing Officer while preparing the intimation under Section 141(1) of the Act has considered the material and that there was no fresh material for recording the reason to believe that the income has escaped assessment. In Assistant Commissioner of Income Tax Vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd., 2007 ITR 500, the Supreme Court had considered the provisions of Section 143(1) of the Act and has held that the notice of intimation under Section 143(1) of the Act is given without prejudice to the provisions of Section 143(2) of the Act and it does not preclude the right of the Assessing Officer to proceed under Section 143(2) of the Act. In view of the aforesaid authority, it is clear that the intimation under Section 143(1) of the Act has been treated to be an acknowledgment given by the ministerial staff of the Department and is not an order of assessment passed by the Assessing Officer. In the above facts and circumstance, the Tribunal has manifestly erred in law in holding that there was a change of opinion and therefore it was not open for the authorities to have proceeded under Section 147/148 of the Act for re-assessment.


Court No. - 3 Case :- INCOME TAX APPEAL No. - 569 of 2012 Appellant :- Commissioner Of Income Tax Respondent :- M/S Vaibhav Casting Pvt. Ltd. Counsel for Appellant :- Gaurav Mahajan Hon'ble Pankaj Mithal,J. Hon'ble Umesh Chandra Tripathi,J. Heard Sri Gaurav Mahajan, learned counsel for appellant. No one appears for respondent despite service by publication. Therefore, Court has no option but to proceed ex-parte against respondent-assessee. This Income Tax Appeal under Section 260-A of Income Tax Act, 1961 (hereinafter referred as Act ) has been preferred by Revenue against order of Income Tax Appellate Tribunal dated 26.03.2010. Tribunal by said order has allowed appeal of assessee-respondent and has held that proceedings under Section 147 of Act for re-assessment of respondent-assessee are illegal inasmuch as they are based upon change of opinion. appeal was admitted on following question of law:- Whether ITAT was correct in law in holding that there was change of opinion (wrongly typed as difference of opinion) and therefore, action under Section 147 could not be taken, ignoring changes made in Section 147 of Act ? respondent-assessee filed return for assessment year 1997-98 and same was accepted under Section 143(1) of Act. Even revised return so filed by him was accepted under Section 143(1) of Act. There was no regular assessment proceedings as contemplated by Section 143(3) of Act. 2 Thereafter, notice under Section 148 of Act was given on 30.01.2001 on ground that income of respondent- assessee has escaped assessment and therefore, proceedings for re-assessment are necessary. respondent-assessee was supplied with reasons to believe on basis of which opinion for re-assessment was found. respondent-assessee had filed objections against notice for re-assessment and reasons to believe so supplied to him. objections were disposed of and were not challenged any further by means of writ petition as contemplated vide GKN Driveshafts (India) Ltd. Vs. Income Tax Officer and others, 2003 (259) ITR 19 (SC). Thus, controversy with regard to initiation of proceedings under Section 147/148 were set to rest. Thereafter, Assessing Officer proceeded to pass re-assessment order on 19.03.2002 under Section 143(3) of Act. said assessment order was challenged in appeal before Commissioner of Income Tax. appeal was dismissed on 24.11.2004. Then, further appeal was preferred before Tribunal. Tribunal allowed appeal by impugned order holding that re-assessment proceedings are bad in law as they could not have been initiated on basis of change of opinion. submission of Sri Gaurav Mahajan, learned counsel for appellant, is that question of change of opinion does not arise inasmuch as there was no order of regular assessment under Section 143(3) and that acceptance of return under Section 143(1) is in nature of acknowledgment wherein no opinion is expressed by Assessing Officer. Secondly, once objections of respondent-assessee against notice for re-assessment have been turned down and have attained finality, it was no longer open for Department to have gone into correctness of re-assessment proceedings. It is acceptable to parties that there was no order of regular assessment under Section 143(3) of Act and as such, 3 no opinion on merits of return was expressed by Assessing Officer. Tribunal in recording finding that it was case of change of opinion and therefore, proceedings are bad in law observed that Assessing Officer while preparing intimation under Section 141(1) of Act has considered material and that there was no fresh material for recording reason to believe that income has escaped assessment. In Assistant Commissioner of Income Tax Vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd., 2007 (291) ITR 500 (SC), Supreme Court had considered provisions of Section 143(1) of Act and has held that notice of intimation under Section 143(1) of Act is given without prejudice to provisions of Section 143(2) of Act and it does not preclude right of Assessing Officer to proceed under Section 143(2) of Act. legislative intent is very clear from use of word intimation in place of assessment and scheme of things compels to hold that use of word intimation under Section 143(1) cannot be treated to be order of assessment. Even acknowledgment of filing of return is deemed to be intimation under Section 143(1) of Act where either no sum is payable by assessee or no refund is due to him. Acknowledgment is not done by Assessing Officer but mostly by ministerial staff. In view of aforesaid authority, it is clear that intimation under Section 143(1) of Act has been treated to be acknowledgment given by ministerial staff of Department and is not order of assessment passed by Assessing Officer. In such situation, there is no expression of any opinion by Assessing Officer on return submitted by assessee. In view of aforesaid facts and circumstances, in present case as no order of assessment had been passed by Assessing Officer, simply on basis of intimation contemplated 4 under Section 143(1), it cannot be said that any opinion was expressed by Assessing Officer, which could have been changed for purposes of giving notice for re-assessment. Thus, when there was no expression of opinion earlier at any stage by Assessing Officer, there cannot be change of opinion in giving notice under Section 148 of Act as has been held by Tribunal. In addition to above, very fact that objections of respondent-assessee against notice for re-assessment and reasons to believe were disposed of by Assessing Officer by detailed order and said order was allowed to attain finality, matter with regard to validity of notice and proceedings had come to rest. Tribunal therefore had no jurisdiction in law to allow appeal on technical ground that proceedings were invalid for reason that they were initiated on basis of change of opinion rather than on any valid ground. In above facts and circumstance, Tribunal has manifestly erred in law in holding that there was change of opinion and therefore it was not open for authorities to have proceeded under Section 147/148 of Act for re-assessment. Accordingly, we answer above question in favour of Revenue and against respondent-assessee holding that order of Tribunal dated 26.03.2010 is set aside. appeal is allowed. Order Date :- 18.07.2017 Nadim Commissioner of Income-tax v. Vaibhav Casting Pvt. Ltd
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