Case Law Details
Ravindra Kumar (HUF) Vs CIT (Patna High Court)
The Income Tax Officer fairly mentions in the ‘reasons’ supplied that the assessee had not produced certain evidences in support of agricultural income and in absence of which the claim towards agricultural income could not be substantiated. We completely fail to appreciate as to how such admission by the Assessing Officer regarding absence of material, could lead to a formation of belief that the disclosure was incorrect and chargeable to tax under Section 147 of ‘the Act’. The reason is two fold. Firstly such opportunity was much available to the Assessing Officer at the stage of filing of the returns when in exercise of powers under Section 142/143, such directions could have been issued for production of records and a failure of the petitioner to satisfy the Assessing Officer on such count could have led to a best judgment assessment under Section 144 at the stage of original assessment but having not done so, such recourse cannot be adopted by relying upon the statutory provisions of Section 147 of ‘the Act’. Secondly such enabling powers is only to be exercised only where there is tangible material available at the hands of the Assessing Officer and not in absence thereof. The judgments relied upon by Mr. Pathy has been contested by Mr. Sinha on grounds that they relate to the preamended provisions of Section 147 but in our considered opinion, in view of the position settled by the Supreme Court in the case of Kelvinator of India (supra) after taking note of the transitory change in Section 147, the legal position as to the prerequisites for such exercise, has not undergone a change and which is that, there had to be tangible material at the disposal of the Assessing Officer for reopening of such proceedings and which power cannot be exercised for initiating a roving enquiry.
For the reasons and discussions that we have made above and in view of the clear fact situation available on the record where such reopening is simply founded on the advisory dated 10.03.2016 issued by the department and where the reasons so present for the formation of belief is not resting on any tangible material, in possession of the Assessing officer as confirmed from the discussions above, in our opinion, the entire exercise is illegal and de hors the provisions of Section 147/148 of ‘the Act’.
Since the entire exercise is held de hors the statutory prescriptions, we do not consider it necessary to express our opinion on the expanded scope of Explanation 3 attached to Section 147 and leave it open for discussion in an appropriate case.
FULL TEXT OF THE HIGH COURT ORDER / JUDGEMENT
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