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There may be cases where the Assessing Officer does not and may not raise any written query but still the Assessing Officer in the first round/ original proceedings may have examined the subject matter, claim etc, because the aspect or question may be too apparent and obvious. To hold that the assessing officer in the first round did not examine the question or subject matter and form an opinion, would be contrary and opposed to normal human conduct. Such cases have to be examined individually.
We have gone through the Notice under Section 154 of the Income Tax Act, 1961 . We find that the said notice is totally vague. The Assessing Officer has not even indicated as to on what basis he has allowed excess set-off. Notice under Section 154 of the Act, therefore, was not maintainable.
We see no error in the observation made by the Division Bench of the High Court in the impugned judgement that once limitation period of four years provided under Section 147/149(1A) of the Income Tax Act, 1961, [for short, `the Act’] expires then the question of reopening by the Department does not arise.
Section 151(2) mandates that the satisfaction has to be of the Joint Commissioner. That expression has a distinct meaning by virtue of the definition in Section 2(28C). The Commissioner of Income Tax is not a Joint Commissioner within the meaning of Section 2(28C).
From the facts on records, it is apparent that the impugned notice under section 148 has been issued after the expiry of a period of four years from the end of the relevant assessment year in a case where earlier an assessment had been framed under section 143(3) of the Act. Under the circumstances, the proviso to section 147 would be attracted.
Once the assessment was reopened to investigate the purchase of various lands then the Assessing Officer was duty bound to make enquiries to examine the purchase of these land as well as the sources for the same. The Assessing Officer has simply issued notice under sections 142(1) and 143(2) which is standard for format of the notice.
In the present case, we notice that in two out of four reasons recorded by the Assessing Officer for reopening the assessment, he stated that he need to verify the claims. In the second ground, he had recorded that admissibility of the bad debts written off required to be verified. In the fourth ground also, he had recorded that admissibility of royalty claim was required to be verified.
Whether reassessment proceedings initiated u/s 147 to successor of business on account of omission and failure to disclose fully and truly all material facts necessary for determining the income chargeable to tax for these assessment years is valid?
On the issue of retrospective amendment, Union Finance Minister, Shri Pranab Mukherjee has said that he had given a commitment in the Parliament with regard to retrospective amendments that CBDT will issue a policy circular to clarify that in cases where assessment proceedings have become final before first day of April, 2012; such cases shall not be reopened. Now CBDT has issued a circular in this regard, the Finance Minister has stated.
The assessee had filed and furnished all details and particulars relating to the royalty payment including agreements, calculation and the approval before the Ld. AO during assessment proceedings. There was no failure on the part of the assessee to furnish true and correct all material facts. The facts were available before and were within the knowledge of the AO. The new AO as per the reasons recorded on the basis of the same facts, has observed that royalty payment should have been disallowed as it was capital in nature. This is a question of legal inference or interpretation which has been drawn from the same material facts on record. Therefore, the case falls in the category of change of opinion as at the time of original preceding the AO examined and gone into the question of royalty. Even if there was any legal error or illegality the same cannot be rectified and be made the subject matter of reassessment proceedings u/s 147/148 of the Act. The re-assessment order is also quashed.
