M. Ramaswamy Reddy, Bangalore V. Assistant Commissioner of Income Tax, Circle 10(1), Bangalore

ITA 148/BANG/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7871 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 20-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M VIJAY KUMAR
• Assessee Lawyers: K GANGADHARA SASTRY
• Keywords: Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 142(1); 143(1); 147; 145; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO S . 145 TO 149 /BANG/201 7 ASSESSMENT YEAR S : 2005 - 06 TO 2009 - 10 SHRI M. RAMASWAMY REDDY (HUF), CHANDAPURA VILLAGE, ATTIBELEHOBLI, ANEKAL TALUK, BANGALORE 560 081. PAN: AALHM3509D VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 10 (1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI K. GANGADHARA SASTRY RESPONDENT BY : SHRI M. VIJAY KUMAR, ADDL. CIT (DR) DATE OF HEARING : 01.01.2019 DATE OF PRONOUNCEMENT : 02 . 01 .201 9 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER ALL THESE FIVE APPEALS ARE FILED BY THE ASSESSEE WH ICH ARE DIRECTED AGAINST A COMBINED ORDER OF LD. CIT (A)-7, BANGALORE DATED 11 .11.2016 FOR ASSESSMENT YEARS 2005-06 TO 2009-10. ALL THESE APPEALS WERE H EARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAK E OF CONVENIENCE. 2. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2005-06 IN ITA NO. 145/BANG/2017 ARE AS UNDER. 1. COMMISSIONER OF IT(A) ORDER IS OPPOSED TO THE LA W AND FACTS OF THE CASE. 2. CIT(A) FAILED TO NOTICE THAT ASSESSMENT CAN BE M ADE U/S. 144 ONLY IF THERE IS NO COMPLIANCE U/S.143(3) .WHEN ASSESSING O FFICER INTENDS DO ASSESSMENT IT IS ONLY U/S.143(3) AND AS SUCH NOTICE U/S.143(2) IS MANDATORY AS REQUIRED U/S.143(2)(II). AS CIT(A) HAS HELD NOTICE U/S.143(2) IS NOT SERVED HENCE ASSESSMENT IS BAD IS LAW. HON'BLE ITAT MAY KINDLY DECLARE ASSESSMENT AS BAD IN LAW. 3. THE CIT(A) ERRED IN CONCLUDING THAT ASSESSMENT U /S.144 WILL NOT REQUIRE NOTICE U/S.143(2). IT IS EVIDENT THAT CIT(A ) IN PARA 5.2 HAS BROUGHT OUT SECTION 144 (C) WHICH EXPLICIT THAT ISS UE OF NOTICE U/S.143(2) IS NECESSARY. HENCE HON'BLE ITAT MAY DEC LARE ASSESSMENT AS BAD IN LAW. ITA NOS. 145 TO 149/BANG/2017 PAGE 2 OF 9 4. THE CIT(A) DECISION THAT ASSESSING OFFICER ACTIO N IN INITIATING PROCEEDINGS U/S.147 OF THE IT ACT'61 FOR THESE ASSE SSMENT YEARS IN QUESTION IS REASONABLE AND THEREFORE UPHELD IS NOT PROPER. AS THE CIT(A) HAS NOT EXAMINED APPELLANTS FACTS AND CASE L AWS MENTIONED HENCE APPELLANTS GROUNDS. HENCE ASSESSMENT IS BAD I N LAW HENCE ITAT MAY DECLARE ASSESSMENT AS BAD IN LAW. 5. APPELLANT CRAVES TO ADD OR DELETE ANY GROUNDS OF APPEAL AT THE TIME HEARING. 3. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2006-07 IN ITA NO. 146/BANG/2017 ARE AS UNDER. 1. COMMISSIONER OF IT(A) ORDER IS OPPOSED TO THE LA W AND FACTS OF THE CASE. 2. CIT(A) FAILED TO NOTICE THAT ASSESSMENT CAN BE M ADE U/S. 144 ONLY IF THERE IS NO COMPLIANCE U/S.143(3) .WHEN ASSESSING O FFICER INTENDS DO ASSESSMENT IT IS ONLY U/S.143(3) AND AS SUCH NOTICE U/S.143(2) IS MANDATORY AS REQUIRED U/S.143(2)(II). AS CIT(A) HAS HELD NOTICE U/S.143(2) IS NOT SERVED HENCE ASSESSMENT IS BAD IS LAW. HON'BLE ITAT MAY KINDLY DECLARE ASSESSMENT AS BAD IN LAW. 3. THE CIT(A) ERRED IN CONCLUDING THAT ASSESSMENT U /S.144 WILL NOT REQUIRE NOTICE U/S.143(2). IT IS EVIDENT THAT CIT(A ) IN PARA 5.2 HAS BROUGHT OUT SECTION 144 (C) WHICH EXPLICIT THAT ISS UE OF NOTICE U/S.143(2) IS NECESSARY. HENCE HON'BLE ITAT MAY DEC LARE ASSESSMENT AS BAD IN LAW. 4. THE CIT(A) DECISION THAT ASSESSING OFFICER ACTIO N IN INITIATING PROCEEDINGS U/S.147 OF THE IT ACT'61 FOR THESE ASSE SSMENT YEARS IN QUESTION IS REASONABLE AND THEREFORE UPHELD IS NOT PROPER. AS THE CIT(A) HAS NOT EXAMINED APPELLANTS FACTS AND CASE L AWS MENTIONED HENCE APPELLANTS GROUNDS. HENCE ASSESSMENT IS BAD I N LAW HENCE ITAT MAY DECLARE ASSESSMENT AS BAD IN LAW. 5. APPELLANT CRAVES TO ADD OR DELETE ANY GROUNDS OF APPEAL AT THE TIME HEARING. 4. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2007-08 IN ITA NO. 147/BANG/2017 ARE AS UNDER. 1. COMMISSIONER OF IT(A) ORDER IS OPPOSED TO THE LA W AND FACTS OF THE CASE. 2. CIT(A) FAILED TO NOTICE THAT ASSESSMENT CAN BE M ADE U/S. 144 ONLY IF THERE IS NO COMPLIANCE U/S.143(3) .WHEN ASSESSING O FFICER INTENDS DO ASSESSMENT IT IS ONLY U/S.143(3) AND AS SUCH NOTICE U/S.143(2) IS MANDATORY AS REQUIRED U/S.143(2)(II). AS CIT(A) HAS HELD NOTICE U/S.143(2) IS NOT SERVED HENCE ASSESSMENT IS BAD IS LAW. HON'BLE ITAT MAY KINDLY DECLARE ASSESSMENT AS BAD IN LAW. ITA NOS. 145 TO 149/BANG/2017 PAGE 3 OF 9 3. THE CIT(A) ERRED IN CONCLUDING THAT ASSESSMENT U /S.144 WILL NOT REQUIRE NOTICE U/S.143(2). IT IS EVIDENT THAT CIT(A ) IN PARA 5.2 HAS BROUGHT OUT SECTION 144 (C) WHICH EXPLICIT THAT ISS UE OF NOTICE U/S.143(2) IS NECESSARY. HENCE HON'BLE ITAT MAY DEC LARE ASSESSMENT AS BAD IN LAW. 4. THE CIT(A) DECISION THAT ASSESSING OFFICER ACTIO N IN INITIATING PROCEEDINGS U/S.147 OF THE IT ACT'61 FOR THESE ASSE SSMENT YEARS IN QUESTION IS REASONABLE AND THEREFORE UPHELD IS NOT PROPER. AS THE CIT(A) HAS NOT EXAMINED APPELLANTS FACTS AND CASE L AWS MENTIONED HENCE APPELLANTS GROUNDS. HENCE ASSESSMENT IS BAD I N LAW HENCE ITAT MAY DECLARE ASSESSMENT AS BAD IN LAW. 5. APPELLANT CRAVES TO ADD OR DELETE ANY GROUNDS OF APPEAL AT THE TIME HEARING. 5. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2008-09 IN ITA NO. 148/BANG/2017 ARE AS UNDER. 1. COMMISSIONER OF IT(A) ORDER IS OPPOSED TO THE LA W AND FACTS OF THE CASE. 2. CIT(A) FAILED TO NOTICE THAT ASSESSMENT CAN BE M ADE U/S. 144 ONLY IF THERE IS NO COMPLIANCE U/S.143(3) .WHEN ASSESSING O FFICER INTENDS DO ASSESSMENT IT IS ONLY U/S.143(3) AND AS SUCH NOTICE U/S.143(2) IS MANDATORY AS REQUIRED U/S.143(2)(II). AS CIT(A) HAS HELD NOTICE U/S.143(2) IS NOT SERVED HENCE ASSESSMENT IS BAD IS LAW. HON'BLE ITAT MAY KINDLY DECLARE ASSESSMENT AS BAD IN LAW. 3. THE CIT(A) ERRED IN CONCLUDING THAT ASSESSMENT U /S.144 WILL NOT REQUIRE NOTICE U/S.143(2). IT IS EVIDENT THAT CIT(A ) IN PARA 5.2 HAS BROUGHT OUT SECTION 144 (C) WHICH EXPLICIT THAT ISS UE OF NOTICE U/S.143(2) IS NECESSARY. HENCE HON'BLE ITAT MAY DEC LARE ASSESSMENT AS BAD IN LAW. 4. THE CIT(A) DECISION THAT ASSESSING OFFICER ACTIO N IN INITIATING PROCEEDINGS U/S.147 OF THE IT ACT'61 FOR THESE ASSE SSMENT YEARS IN QUESTION IS REASONABLE AND THEREFORE UPHELD IS NOT PROPER. AS THE CIT(A) HAS NOT EXAMINED APPELLANTS FACTS AND CASE L AWS MENTIONED HENCE APPELLANTS GROUNDS. HENCE ASSESSMENT IS BAD I N LAW HENCE ITAT MAY DECLARE ASSESSMENT AS BAD IN LAW. 5. APPELLANT CRAVES TO ADD OR DELETE ANY GROUNDS OF APPEAL AT THE TIME HEARING. 6. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2009-10 IN ITA NO. 149/BANG/2017 ARE AS UNDER. 1. COMMISSIONER OF IT(A) ORDER IS OPPOSED TO THE LA W AND FACTS OF THE CASE. ITA NOS. 145 TO 149/BANG/2017 PAGE 4 OF 9 2. CIT(A) FAILED TO NOTICE THAT ASSESSMENT CAN BE M ADE U/S. 144 ONLY IF THERE IS NO COMPLIANCE U/S.143(3) .WHEN ASSESSING O FFICER INTENDS DO ASSESSMENT IT IS ONLY U/S.143(3) AND AS SUCH NOTICE U/S.143(2) IS MANDATORY AS REQUIRED U/S.143(2)(II). AS CIT(A) HAS HELD NOTICE U/S.143(2) IS NOT SERVED HENCE ASSESSMENT IS BAD IS LAW. HON'BLE ITAT MAY KINDLY DECLARE ASSESSMENT AS BAD IN LAW. 3. THE CIT(A) ERRED IN CONCLUDING THAT ASSESSMENT U /S.144 WILL NOT REQUIRE NOTICE U/S.143(2). IT IS EVIDENT THAT CIT(A ) IN PARA 5.2 HAS BROUGHT OUT SECTION 144 (C) WHICH EXPLICIT THAT ISS UE OF NOTICE U/S.143(2) IS NECESSARY. HENCE HON'BLE ITAT MAY DEC LARE ASSESSMENT AS BAD IN LAW. 4. THE CIT(A) DECISION THAT ASSESSING OFFICER ACTIO N IN INITIATING PROCEEDINGS U/S.147 OF THE IT ACT'61 FOR THESE ASSE SSMENT YEARS IN QUESTION IS REASONABLE AND THEREFORE UPHELD IS NOT PROPER. AS THE CIT(A) HAS NOT EXAMINED APPELLANTS FACTS AND CASE L AWS MENTIONED HENCE APPELLANTS GROUNDS. HENCE ASSESSMENT IS BAD I N LAW HENCE ITAT MAY DECLARE ASSESSMENT AS BAD IN LAW. 5. APPELLANT CRAVES TO ADD OR DELETE ANY GROUNDS OF APPEAL AT THE TIME HEARING. 7. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT IN ASSESSMENT YEARS 2005-06 AND 2006-07, THERE ARE TWO ISSUES BEING NON- ISSUE OF NOTICE U/S. 143(2) OF IT ACT AND VALIDITY OF REASSESSMENT PROCEEDINGS U/S. 147 OF IT ACT. HE SUBMITTED THAT IN THESE TWO YEARS, HE IS NOT PRESSING GROUND NOS. 2 AND 3 IN RESPECT OF NON- ISSUE OF NOTICE BY THE AO U/S. 143(2) OF IT ACT. ACCORDINGLY THESE TWO GROUN DS IN THESE TWO YEARS ARE REJECTED AS NOT PRESSED. 8. REGARDING THE SECOND ISSUE IN RESPECT OF VALIDIT Y OF REASSESSMENT PROCEEDINGS U/S. 147, HE SUBMITTED THAT THIS ISSUE WAS DISCUSSED AND DECIDED BY CIT (A) AS PER PARA NOS. 4.4 TO 4.7 OF H IS ORDER. FOR READY REFERENCE, THESE PARAS ARE REPRODUCED HEREINBELOW F ROM THE ORDER OF CIT (A). 4.4 THE TECHNICAL ISSUES RAISED BY THE APPELLANT TH AT THE REASONS RECORDED FOR REOPENING OF THE CASE U/S 148 OF THE A CT WERE NOT PROVIDED DOES NOT STAND AS THE APPELLANT HAS NOT FI LED THE RETURN OF INCOME AND HAS NEVER ASKED FOR THE REASONS. IN THE CASE OF GKN DRIVERSHAFT (INDIA) LTD 259 ITR 19, THE HON'BLE APE X COURT HAS HELD THAT ' HOWEVER, WE CLARIFY THAT WHEN A NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT IS ISSUED, THE PROPER COURSE OF ACTI ON FOR THE NOTICES IS TO FILE RETURN AND IF HE SO DESIRES, TO SEEK REASON S FOR ISSUING NOTICES. THE ASSESSING OFFICER IS BOUND TO FURNISH REASONS W ITHIN A REASONABLE TIME. ON RECEIPT OF REASONS, THE NOTICEE IS ENTITLE D TO FILE OBJECTIONS TO ITA NOS. 145 TO 149/BANG/2017 PAGE 5 OF 9 ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOU ND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER.' IN THE INSTANT C ASES, THE APPELLANT HAS NOT BROUGHT ANY MATERIAL ON RECORD THAT THE REA SONS RECORDED WERE ASKED FOR. 4.5 THE POWER OF ASSESSMENT OR REASSESSMENT OF ANY INCOME CHARGEABLE TO TAX THAT HAVE ESCAPED ASSESSMENT HAS BEEN PROVIDED UNDER SECTION 147 RWS 148 OF INCOME TAX ACT OF 1961 . IF THE ASSESSING OFFICER HAS THE REASON TO BELIEVE THAT ANY INCOME C HARGEABLE TO TAX HAS ESCAPED ASSESSMENT THEN THE ASSESSING OFFICER MAY S UBJECT TO THE PROVISIONS OF SECTION 147 TO 153 ASSESS OR REASSESS SUCH INCOME. BEFORE ISSUING ANY NOTICE U/S 148 THE ASSESSING OFF ICER MUST HAVE REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. TO CONSTITUTE A VALID REASON TO BELIEVE THERE MUST BE SOME NEW MATERIAL COMING INTO LIGHT WITH THE ASSESSING O FFICER, MERELY A CHANGE OF OPINION CANNOT CONSTITUTE A REASON TO BEL IEVE. IF THE ASSESSEE HAS DISCLOSED BASIC AND ALL THE TRUE FACTS DURING THE COURSE OF ASSESSMENT AND THE ASSESSMENT IS COMPLETED. LATER O N NOTICE U/S 148 CANNOT BE ISSUED MERELY BECAUSE THERE IS ANOTHER IN FERENCE POSSIBLE FROM THE SAME DOCUMENTS AND-THE FACTS PLACED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT AS IT WILL AMOUNT TO CHANGE OF OPINION. THERE MUST BE SOME NEW MATERIAL COMING INT O LIGHT FOR ACTION U/S 147/148. BUT IF THE ASSESSEE HAS SUPPRESSED SOM E RELEVANT FACTS WHICH LEADS TO CONCEALMENT OF INCOME AND LATER THOS E FACTS COME BEFORE THE ASSESSING OFFICER THE NOTICE U/S 147/48 CAN BE ISSUED VALIDLY. 4.6 THE APEX COURT IN THE CASE OF ACIT VS RAJESH JH AVERY STOCK BROKERS P. LTD. REPORTED IN (2007) 291 ITR 500 AFTE R CONSIDERING VARIOUS DECISIONS RENDERED BY IT IN THE PAST, CONST RUED THE WORDS 'REASON TO BELIEVE' ;N SECTION 147 OF THE ACT AND H ELD THAT, IF THE AO HAS CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT ANY INCOME HAS ESCAPED ASSESSMENT, THEN IT COULD BE SAID THAT THE AO HAD REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAP ED ASSESSMENT. THE APEX COURT FURTHER HELD THAT THE EXPRESSION 'REASON TO BELIEVE' IN SECTION 147 OF THE ACT CANNOT BE READ TO MEAN THAT THE AO SHOULD HAVE FINALLY ASCERTAINED THE FACT BY LEGAL EVIDENCE OR C ONCLUSION. THE APEX COURT ALSO ACID THAT, AT THE STAGE OF ISSUE OF NOTI CE U/S 148 OF THE ACT, THE ONLY QUESTION TO BE CONSIDERED IS, WHETHER THER E WAS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COULD, HAVE F ORMED A REQUISITE BELIEF AND NOT WHETHER THE MATERIALS WOULD CONCLUSI VELY PROVE ESCAPEMENT OF INCOME. '16. SECTION 147 AUTHORISES AND PERMITS THE ASSESSI NG OFFICER TO ASSESS OR REASSESS INCOME CHARGEABLE TO TAX IF HE H AS REASON TO BELIEVE THAT INCOME FOR ANY ASSESSMENT YEAR HAS ESC APED ASSESSMENT. THE WORD 'REASON' IN THE PHRASE 'REASON TO BELIEVE' WOULD MEAN CAUSE OR JUSTIFICATION. IF THE ASSESSING OFFICER HAS CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT INCO ME HAD ESCAPED ASSESSMENT, IT CAN BE SAID TO HAVE REASON TO BELIEV E THAT AN INCOME ITA NOS. 145 TO 149/BANG/2017 PAGE 6 OF 9 HAD ESCAPED ASSESSMENT. THE EXPRESSION CANNOT BE RE AD TO MEAN THAT THE ASSESSING OFFICER SHOULD HAVE FINALLY ASCE RTAINED THE FACT BY LEGAL EVIDENCE OR CONCLUSION. THE FUNCTION OF T HE ASSESSING OFFICER IS TO ADMINISTER THE STATUTE WITH SOLICITUD E FOR THE PUBLIC EXCHEQUER WITH AN INBUILT IDEA OF FAIRNESS TO TAXPA YERS. AS OBSERVED BY THE SUPREME COURT IN CENTRAL PROVINCES IN CENTRAL PROVINCES MANGANESE ORE CO. LTD. V ITO (1991) 191 I TR 662, FOR INITIATION OF ACTION UNDER SECTION 147(A) (AS THE P ROVISION STOOD AT THE RELEVANT TIME) FULFILLMENT OF THE TWO REQUISITE CONDITIONS IN THAT REGARD IS ESSENTIAL. AT THAT STAGE, THE FINAL OUTCO ME OF THE PROCEEDING IS NOT RELEVANT. IN OTHER WORDS, AT THE INITIATION STAGE, WHAT IS REQUIRED IS 'REASON TO BELIEVE', BUT NOT TH E ESTABLISHED FACT OR ESCAPEMENT OF INCOME. AT THE STAGE OF ISSUE OF N OTICE, THE ONLY QUESTION IS WHETHER THERE WAS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COULD HAVE FORMED A REQUISITE BEL IEF. WHETHER THE MATERIALS WOULD CONCLUSIVELY PROVE THE ESCAPEME NT IS NOT THE CONCERN AT THAT STAGE. THIS IS ALSO BECAUSE THE FOR MATION OF BELIEF BY THE ASSESSING OFFICER IS WITHIN THE REALM OF SUB JECTIVE SATISFACTION [SEE ITO V SELECTED DALURBAND COAL CO. P. LTD. (1996) 2171TR 597 (SC); RAYMOND WOOLLEN MILLS LTD. V ITO [ (1999) 236 34(SC)]. 17. THE SCOPE AND EFFECT OF SECTION 147 AS SUBSTITU TED WITH EFFECT FROM APRIL 1, 1989, AS ALSO SECTIONS 148 TO 152 ORE SUBSTANTIALLY DIFFERENT FROM THE PROVISIONS AS THEY STOOD PRIOR T O SUCH SUBSTITUTION. UNDER THE OLD PROVISIONS OF SECTION 1 47, SEPARATE CLAUSES (A) AND (B) LAID DOWN THE CIRCUMSTANCES UND ER WHICH INCOME ESCAPING ASSESSMENT FOR THE PAST ASSESSMENT YEARS COULD BE ASSESSED OR REASSESSED. TO CONFER JURISDICTION UNDE R SECTION 147(A) TWO CONDITIONS WERE REQUIRED TO BE SATISFIED: FIRST LY, THE ASSESSING OFFICER MUST HAVE REASON TO BELIEVE THAT INCOME, PR OFITS OR GAINS CHARGEABLE TO INCOME-TAX HAVE ESCAPED ASSESSMENT, A ND, SECONDLY, HE MUST ALSO HAVE REASON TO BELIEVE THAT SUCH ESCAP EMENT HAS OCCURRED BY REASON OF EITHER OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY OR TRULY ALL MATERIAL FA CTS NECESSARY FOR HIS ASSESSMENT OF THAT YEAR. BOTH THESE CONDITIONS WERE CONDITIONS PRECEDENT TO BE SATISFIED BEFORE THE ASSESSING OFFI CER COULD HAVE JURISDICTION TO ISSUE NOTICE UNDER SECTION 148 READ WITH SECTION 147(A). BUT UNDER THE SUBSTITUTED SECTION 147 EXIST ENCE OF ONLY THE FIRST CONDITION SUFFICES. IN OTHER WORDS, IF THE AS SESSING OFFICER FOR WHATEVER REASON HAS REASON TO BELIEVE THAT INCOME H AS ESCAPED ASSESSMENT IT CONFERS JURISDICTION TO REOPEN THE AS SESSMENT. IT IS, HOWEVER, TO BE NOTED THAT BOTH THE CONDITIONS MUST BE FULFILLED IF THE CASE FALLS WITHIN THE AMBIT OF THE PROVISION TO SEC TION 147. THE CASE AT HAND IS COVERED BY THE MAIN PROVISION AND NOT TH E PROVISO. 18. SO LONG AS THE INGREDIENTS OF SECTION ARE FULFI LLED, THE ASSESSING OFFICER IS FREE TO INITIATE PROCEEDING UNDER SECTIO N 147 AND FAILURE TO TAKE STEPS UNDER SECTION 143(3) WILL NOT RENDER THE ASSESSING OFFICER POWERLESS TO INITIATE REASSESSMENT PROCEEDI NGS EVEN WHEN ITA NOS. 145 TO 149/BANG/2017 PAGE 7 OF 9 INTIMATION UNDER SECTION 143(1) HAD BEEN ISSUED.' 4.7 APPLYING THE RATIO LAID DOWN BY THE APEX COURT IN THE AFORESAID CASE, IT HAS TO BE SEEN IN THE PRESENT CASES WHETHE R THE AO HAD ANY CAUSE OR JUSTIFICATION TO FORM A REASONABLE BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE APPEL LANT HAS NOT BROUGHT ANY MATERIAL IN CONTRARY TO THIS. VIEWED IN THIS MANNER, THE AO'S ACTION IN INITIATING PROCEEDINGS U/S 147 OF TH E ACT FOR THESE ASSESSMENT YEARS IN QUESTION IS REASONABLE AND, THE REFORE, UPHELD. 9. AFTER GOING THROUGH THESE PARAS FROM THE ORDER O F CIT(A), IT WAS OBSERVED BY THE BENCH THAT A CATEGORICAL FINDING HAS BEEN GIVEN BY CIT(A) IN PARA 4.4 OF HIS ORDER THAT THIS WAS THE OBJECTION OF THE ASSESS EE RAISED BEFORE CIT(A) THAT AO HAS NOT PROVIDED THE COPY OF REASONS RECORD ED FOR REOPENING AND IN THIS REGARD, THIS IS THE OBSERVATION BY CIT(A) THAT THE ASSESSEE HAS NOT FILED RETURN OF INCOME AND HAS NEVER ASKED FOR THE REASON S AND REFERENCE WAS MADE TO THE JUDGEMENT OF HONBLE APEX COURT RENDERE D IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. AS REPORTED IN 259 ITR 19 IN WHICH, IT WAS HELD THAT AFTER THE RECEIPT OF NOTICE U/S. 148, THE ASSESSEE SHOULD FILE THE RETURN OF INCOME AND THEREAFTER, THE ASSESSEE SHALL MAKE REQU EST TO THE AO TO PROVIDE THE REASONS RECORDED BY HIM. BUT IN THE PR ESENT CASE, A CATEGORICAL FINDING HAS BEEN GIVEN BY CIT (A) THAT THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL ON RECORD THAT THE REASONS RECORDED WERE A SKED FOR. THE BENCH OBSERVED THAT UNDER THESE FACTS, IT CANNOT BE SAID THAT THERE IS ANY INFIRMITY IN THE ORDER OF CIT (A) ON THIS ISSUE. IN REPLY, T HE LD. AR OF ASSESSEE HAD NOTHING TO SAY. THE LD. DR OF REVENUE SUPPORTED TH E ORDER OF CIT(A). 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND IN VIEW OF ABOVE DISCUSSION, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) IN RESP ECT OF THE ISSUE REGARDING VALIDITY OF REASSESSMENT PROCEEDINGS ALSO AND ACCOR DINGLY GROUND NO. 4 IS ALSO REJECTED IN BOTH THESE YEARS I.E. ASSESSMENT Y EARS 2005-06 AND 2006- 07. 11. IN THE RESULT, THESE TWO APPEALS OF ASSESSEE FO R ASSESSMENT YEARS 2005-06 AND 2006-07 ARE DISMISSED. 12. IN RESPECT OF REMAINING THREE YEARS I.E. ASSESS MENT YEARS 2007-08 TO 2009- 10, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE RE IS NO DISPUTE IN THESE THREE YEARS THAT RETURN OF INCOME WAS FILED BY THE ASSESSEE AND THEREFORE, AO WAS REQUIRED TO ISSUE NOTICE U/S. 143(2) OF IT A CT. HE ALSO SUBMITTED ITA NOS. 145 TO 149/BANG/2017 PAGE 8 OF 9 THAT AS PER PAGE NO. 1 OF THE ASSESSMENT ORDER IN A LL THESE THREE YEARS, ALTHOUGH IT IS OBSERVED BY THE AO THAT NOTICE U/S. 143(2) WAS ISSUED BUT IT WAS SUBMITTED BY HIM THAT THIS IS FACTUALLY INCORRE CT AND NO SUCH NOTICE WAS SERVED ON ASSESSEE. AT THIS JUNCTURE, THE BENCH WA NTED TO KNOW ABOUT THE FINDING OF CIT (A) ON THIS FACTUAL ASPECT. IN REPL Y, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THERE IS NO FINDING GIVEN BY CIT ( A) ON THIS FACTUAL ASPECT AND THEREFORE, THE MATTER MAY BE RESTORED BACK TO T HE FILE OF CIT (A) FOR FRESH DECISION AFTER EXAMINING THIS FACTUAL ASPECT AND AFTER RECORDING CATEGORICAL FINDING ON THIS FACTUAL ASPECT. THE LD . DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT ON PAGE NO. 1 OF THE ASSESSMENT ORDER IN THESE THREE YEARS, THE AO H AS OBSERVED THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 07.12.2011 A ND NOTICES U/S. 143(2) AND 142(1) WERE ISSUED ON 13.07.2012. IN PARA 13 O F THE STATEMENT OF FACTS FILED BY ASSESSEE BEFORE CIT(A), IT HAS BEEN SUBMIT TED BY THE ASSESSEE THAT THE AO MENTIONS THAT THE NOTICE U/S. 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE WHEREAS THIS IS THE SUBMISSION OF THE ASSE SSEE THAT THERE WAS NO NOTICE U/S. 143(2) SERVED ON ASSESSEE. AS PER THE IMPUGNED ORDER OF CIT(A), LD. CIT(A) HAS NOT GIVEN ANY FINDING ON THI S FACTUAL ASPECT AS TO WHETHER NOTICE U/S. 143(2) WAS ISSUED BY THE AO FOR THESE THREE YEARS OR NOT. HENCE WE FEEL IT PROPER TO RESTORE BACK THIS MATTER FOR ALL THE THREE YEARS TO THE FILE OF CIT (A) FOR FRESH DECISION. A CCORDINGLY WE SET ASIDE THE ORDER OF CIT (A) AND RESTORE THE MATTER BACK TO HIS FILE IN THESE THREE YEARS I.E. ASSESSMENT YEARS 2007-08 TO 2009-10 WITH THE D IRECTION THAT HE SHOULD EXAMINE THE RECORDS AND GIVE A CATEGORICAL FINDING AS TO WHETHER ANY VALID NOTICE U/S. 143(2) WAS ISSUED AND SERVED BY THE AO ON THE ASSESSEE WITHIN THE PRESCRIBED TIME OR NOT. IF IT IS FOUND THAT NO SUCH NOTICE U/S. 143(2) WAS ISSUED AND SERVED WITHIN THE PRESCRIBED TIME, THEN THE ASSESSMENT WILL NOT SURVIVE AND THERE IS NO NEED TO DECIDE ANY OTHER AS PECT OF THE MATTER. BUT IF IT IS FOUND THAT NOTICE U/S. 143(2) WAS ISSUED AND SERVED ON ASSESSEE WITHIN THE PRESCRIBED TIME THEN ALL OTHER ASPECTS OF THE M ATTER SHOULD BE EXAMINED AND DECIDED AFRESH AFTER PROVIDING ADEQUATE OPPORTU NITY OF BEING HEARD TO ITA NOS. 145 TO 149/BANG/2017 PAGE 9 OF 9 BOTH SIDES. IN VIEW OF THIS DECISION, NO ADJUDICAT ION AT THE PRESENT STAGE IS CALLED FOR ON ANY OTHER ASPECT OF THE MATTER. 14. IN THE RESULT, THESE THREE APPEALS OF THE ASSES SEE FOR ASSESSMENT YEARS 2007-08 TO 2009-10 ARE ALLOWED FOR STATISTICAL PURP OSES. 15. IN THE COMBINED RESULT, THE APPEALS OF THE ASSE SSEE FOR ASSESSMENT YEARS 2005-06 AND 2006-07 ARE DISMISSED AND THE REMAINING THREE APPEALS OF ASSESSEE FOR ASSESSMENT YEARS 2007-08 TO 2009-10 AR E ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (PAVAN KUMAR GADALE) (ARUN KUMAR GARODI A) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 2 ND JANUARY, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.