Case Law Details
The assessee had furnished return of income for the year under consideration on 15.02.2010. Admittedly, the said return of income was not processed by the Assessing Officer. However, notice under section 148 of the Act was issued on 05.03.2010 i.e. during the period when the notice under section 143(2) of the Act could also be issued. The Assessing Officer recorded the following reasons for initiating the re-assessment proceedings under section 147 of the Act and thereafter issued notice under section 148 of the Act :
“The under signed has information in possession that Sh. Malwinder Singh has solemnized the marriage of his daughter Smt. Harpreet Kaur in the month of February 2009 and spent Rs. 15, 00,110/-. Sh. Malwinder Singh is not assessed to tax. I have therefore, reasons to believe that income to the extent of Rs. 15,00,110 chargeable to tax for the assessment year 20O9-10 has escaped assessment within the meaning of section 147 of the Income Tax act, 1961,.”
The Assessing Officer was in possession of the information that the assessee had solemnized marriage of his daughter in the month of February,2009 and there was further information that the assessee had spent Rs. 15,00,110/- on the said marriage functions and in view thereof, the Assessing Officer had reason to believe that income to the extent of Rs. 15,00,110/- had escaped assessment. Admittedly, the assessee had solemnized the marriage of his daughter during the year under consideration and during assessment proceedings, the assessee was asked to furnish sources of the said expenditure to which assessee had furnished the explanation alongwith evidences before the Assessing Officer. However, the Assessing Officer accepted part of the information/evidences but made an addition of Rs. 6,00,000/- in the hands of the assessee. The assessee during the course of assessment proceedings had not objected to the initiation of re-assessment proceedings and for the first time before the Commissioner of Income Tax (Appeals) had raised an issue against the initiation of re-assessment proceedings. The assessee before us had also agitated the said issue by way of additional ground of appeal.
The plea of the assessee against the initiation of re-assessment proceedings was that where the time period for issue of notice under section 143(2) of the Act had not expired, then notice under section 148 of the Act could not be issued.
The Hon’ble Punjab & Haryana High Court in Punjab Tractors Vs DCIT (supra) have laid down the principle that the condition precedent for proceeding under section 147/148 of the Act was that the Assessing Officer should have reason to believe that income had escaped assessment. The Hon’ble jurisdictional High Court further held, “The notice under section 147/148 issued to the petitioner was not vitiated merely for the reason that notice under section 143(2) had not been issued to it.”
Please become a Premium member. If you are already a Premium member, login here to access the full content.
