Case Law Details
Smt. Usha Agarwal Vs ITO (ITAT Agra)
Notice u/s 148 of the Act can only be issued if the income escaping assessment amounts to, or is likely to amount to Rs. 1 lac. Non-recording of the reason by the Assessing Officer that the escaped income was likely to be Rs. 1 lac or more was fatal to the issuance of the notice for reassessment.
Section 149(1)(b) of the Act states that no notice u/s 148 shall be issued for the relevant assessment year, if four years, but not more than six years, have elapsed from the end of the relevant assessment year, unless the income chargeable to tax which has escaped assessment amounts to, or is likely to amount to, Rs. 1 lac, or more for that year. Thus, the requirement of section 149(1)(b) of the Act clearly is that notice u/s 148 of the Act can only be issued if the income escaping assessment amounts to, or is likely to amount to Rs. 1 lac. In the reasons recorded, as a reading thereof would show, there is no mention that income amounting to 1 lac or more is believed to have escaped assessment.
In this case assessee contends that the purported reasons are no reasons in the eyes of law in the light of the fact that no amount of escapement is quantified in the so called reasons recorded, and as such, the re-opening is bad in law in view of the binding decision of the Hon’ble jurisdictional Allahabad High Court in the case of ‘Mahesh Kumar Gupta Vs. CIT’, 363 ITR 300 (All) (APB-46-50).
In Mahesh Kumar Gupta v. CIT [2014] 363 ITR 300/[2013] 215 Taxman 114/33 com409 (All) a coordinate Bench of this Court held that it is imperative for the Assessing Officer to record in his that the escaped income is likely to be Rs. 1 lac or more so that the Chief Commissioner or Commissioner may record his satisfaction u/s 151 of the Act. The Court further held that if the said reason has not been recorded by the Assessing Officer, the initiation of the reassessment proceedings after more than four years would be clearly barred by time.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
