Case Law Details
Seshasayee Paper & Boards Ltd. Vs UOI (Madras High Court)
Conclusion: Mere non quoting of the reasons for reopening by AO in the impugned notice would not vitiate the entire proceedings. Department had to furnish the reasons to assessee and on receipt of the reasons, if assessee were of the opinion that there were no additional material or new materials were available then they could submit their objections in respect of the change of opinion or reason to believe.
Held: In the present case, assessee-company challenged block assessment by contending that the very issuance of notice by AO were without jurisdiction. This apart, the notice was issued after the expiry of the time limit prescribed under the statute and therefore, the notice impugned was liable to be scrapped. AO contended that it was an admitted fact that the impugned notices were issued beyond the period of four years but within a period of six years as contemplated under Section 149(1)(b). Thus, the notice was issued informing assessee to take note of the fact that the department possesses some materials in respect of the assessment of the particular assessment years cited in the impugned notices and therefore AO had got every reason to believe to reopen the assessment. It was held mere issuance o f notice could never be construed as a final order. Initiation of proceedings were to be construed as informations to the assessee and could never be concluded as a final proceedings. The Court could not come to the conclusion that non quoting of the reasons by AO in the impugned notice would vitiate the entire proceedings. The Income Tax Department had to furnish the reasons to assessee and on receipt of the reasons, if assessee were of the opinion that there were no additional material or new materials were available then they could submit their objections in respect of the change of opinion or reason to believe. AO was directed to furnish reasons for reopening of assessment within a period of four weeks.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
The notice issued under Section 148 of the Income Tax Act, 1961 is sought to be quashed in all these present writ petitions.
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