Section 147

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  1. Hardik Machchhar

    Hardik Machchhar New Member

    Notice issued under section 148 within time but assessee has not received the original copy rather he received copy of notice and also it is received after 9 months from the date of issue of notice and Notice under section 142 is also received. Question is whether we can say that Assessment/Re-Assessment will not be made as the notice is received after long time and also in copy not in original? Any Case law then please mention.
  2. V K Khanna

    V K Khanna Active Member

    Apart from the issue you are looking into, once the reassessment proceedings have been launched, there are number of issues which you have to carefully look into before replying to the notice:-

    1) The Assessing Officer issuing original assessment order can only initiate reopening proceedings. This is because he alone would be in a position to form reasons to believe that some income of that particular AY has escaped assessment ( Recent judgement of Delhi High Court in the case of Dushyant Kumar Jain vs DCIT)

    2) The powers of the Assessing Officer are not plenary or unbridled. Even in a case where an assessment has been made under Sec 143(3), the AO cannot initiate action under 147 without new or fresh material or information in his possession.

    (3). As a principle of natural justice, if the assessee desires to seek reasons recorded by the AO before issuance of such notice , then the AO is bound to furnish the same within a reasonable time. On receipt of the reasons recorded, the assessee is entitled to file objections against the issuance of notice under 148 and the AO is bound to dispose the same by passing a speaking order before proceeding with the assessment ( Apex Court judgement in the case of GNK Driveshafts India Ltd vs ITO (2002) 259 ITR 19(SC)

    4. The notice u/S 148 is invalid in the absence of any new information/material in the possession of the AO.
    Sec 147 & 148 donot vest uncontrolled and arbitrary power in the AO. Sec 148(2) contains built in safeguard to disclose reasons for reassessment to the assessee. The recording of reasons u/S 148(2) is not an idle formality but is a mandatory requirement of the statute which casts a duty and obligation on the AO to record his reasons for issuing such a notice ( CIT vs Thakarlal (1981) 132 ITR 398, 400(MP)

    5. You are justified to seek reasons for issuance of notice under Sec 148. On receipt of the reply, the same should be carefully examined and if the reasons are not relevant and material, then a detailed submission be made to the AO challenging the issue of the notice. If the AO drops the proceedings, nothing further is required. If not, the AO 'S order should be challenged in appeal before the CIT (A).
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