Even Intimation u/s. 143(1) cannot be reopened u/s 147 without fresh material – HC

In the present case the reasons disclose that the Assessing Officer reached the belief that there was escapement of income “on going through the return of income” filed by the assessee after he accepted the return under Section 143(1) without scrutiny, and nothing more. This is nothing but a review of the earlier proceedings and an abuse of power by the Assessing Officer, both strongly deprecated by the Supreme Court in CIT vs. Kelvinator (supra). The reasons recorded by the Assessing Officer in the present case do confirm our apprehension about the harm that a less strict interpretation of the words “reason to believe” vis-à-vis an intimation issued under section 143(1) can cause to the tax regime. There is no whisper in the reasons recorded, of any tangible material which came to the possession of the assessing officer subsequent to the issue of the intimation. It reflects an arbitrary exercise of the power conferred under section 147.

IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of decision: 12^th December, 2012
ITA No. 555/2012.
THE COMMISSIONER OF INCOME TAX-V
versus
ORIENT CRAFT LTD.

 ORDER

R.V.EASWAR,J: (OPEN COURT)  The substantial question of law proposed by the Revenue in this appeal under Section 260A of the Income Tax Act, 1961 (^„Act^‟ for short) is, in short, whether the Income Tax Appellate Tribunal is right in law in holding that the reassessment proceedings under section 147 were not validly initiated.