M/s Malwinder Singh, Ludhiana V. ITO, Khanna

ITA 749/CHANDI/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80906 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 19-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Recovery proceedings; Opportunity of being heard; Reason to believe; Reassessment proceedings
• Section: 143(3); 142(1); 147; 246; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 749/CHD/2012 ASSESSMENT YEAR : 2009-10 M/S MALWINDER SINGH, VS THE INCOME TAX OFF ICER, KRISHNA NAGAR, WARD-II, AMLOH ROAD, KHANNA. KHANNA DISTT. LUDHIANA. PAN : BBGPS3005P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAVI SHANKAR RESPONDENT BY : SHRI MAHAVIR SINGH DATE OF HEARING : 19.08.2014 DATE OF PRONOUNCEMENT : 17.09.2014 O R D E R PER SUSHMA CHOWLA, JM THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX -II, LUDHIANA DAT ED 04.05.2012 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF TH E INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT THE ORDER OF LEARNED C.I.T. (A) IS BAD IN LAW AND ON FACTS. 2. THAT THE CIT(A) IS NOT JUSTIFIED IN UPHOLDING THE N OTICE U/S 148, ISSUED WITHOUT PROCESSING THE RETURN, JUST WITHIN 2 0 DAYS OF FILING THE RETURN; WHEREAS 'REASSESSMENT NOTICE, WITHOU T TERMINATING THE PENDING ASSESSMENT, WAS LIABLE TO BE HELD INVALID' AS PER JUDGMENT IN THE CASE OF H.E.H, 242 ITR 381 (SC). 3. THAT THE CIT (A) IS NOT JUSTIFIED IN FOLLOWING THE JUDGMENT IN THE CASE OF PUNJAB TRACTORS LTD., 254 ITR 242, WITHOUT NOTICING THE FACT THAT IN THAT CASE PROCESSING U/S 143(1) TERMINATED THE ORIGINAL ASSESSMENT AGAINST WHICH THE ASSESSEE HAD FILED APP EAL ALSO; WHEREAS IN THE INSTANT CASE NOTICE U/S 148 WAS ISSUED WITHO UT THERE BEING ANY 2 PROCESSING OR ASSESSMENT OF THE VALID RETURN THAT W AS PENDING AND 'THE TIME TO ISSUE NOTICE U/S 143(2) HAD NOT EXPIRE D' AS ADMITTED BY THE CIT(A). 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD AND DISPO SED OFF. 3. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUND OF A PPEAL WHICH READS AS UNDER : THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS E RRED IN LAW IN UPHOLDING THE INITIATION OF RE-ASSESSMENT PROCEEDIN GS WITHOUT THERE BEING ANY BASIS OR MATERIAL TO BELIEVE THAT THE ALLEGED E XPENDITURE ON MARRIAGE OF THE DAUGHTER OF THE ASSESSEE HAD LIVE LINK TO TH E ESCAPEMENT OF INCOME, WHICH IS CONTRARY TO THE VIEW TAKEN BY THIS HON'BLE TRIBUNAL IN ITA 368/CHD/2011. 4. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT THE AD DITIONAL GROUND OF APPEAL IS LEGAL ISSUE FOR WHICH NO INVEST IGATION OF FACTS WAS REQUIRED AND HENCE, THE SAME SHOULD BE ADMITTED FOR ADJUDICATION. 5. THE LD. AR FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ORIGINAL GROUNDS OF APPEAL ARE NOT PRESSED AND THE ONLY ISSU E REMAINING FOR ADJUDICATION IS THE ADDITIONAL GROUND OF APPEAL. 6. THE LD. DR FOR THE REVENUE OPPOSED THE ADMISSION OF ADDITIONAL GROUND OF APPEAL. 7. ON THE PERUSAL OF THE ADDITIONAL GROUND OF APPEAL R AISED BY THE ASSESSEE, WE FIND THAT THE ASSESSEE HAS RAISED PURE LY LEGAL ISSUE VIDE THE SAID ADDITIONAL GROUND OF APPEAL AND HENCE, THE SAME IS ADMITTED FOR ADJUDICATION. THE LD. AR FOR THE ASSESSEE HAS NOT PRESSED GROUND OF APPEAL NOS. 1 TO 3 RAISED IN THE MEMO OF APPEAL AND HENCE, THE SAME ARE DISMISSED AS NOT PRESSED. 8. THE ONLY ISSUE REMAINING FOR ADJUDICATION IS AGAINS T THE INITIATION OF RE-ASSESSMENT PROCEEDINGS. THE ALLEG ATION OF THE ASSESSEE WAS THAT THERE WAS NO BASIS OR MATERIAL TO BELIEVE THAT THE 3 ALLEGED EXPENDITURE INCURRED ON THE MARRIAGE OF THE DAUGHTER AMOUNTED TO ESCAPEMENT OF INCOME. 9. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AD FURNISHED RETURN OF INCOME ON 15.02.2010 DECLARING TOTAL INCO ME OF RS. 1,19,700/-. THEREAFTER NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 05.03.2010 AFTER RECORDING REASONS FOR RE -OPENING THE ASSESSMENT. THE ASSESSING OFFICER HAD INFORMATION THAT THE ASSESSEE HAD SOLEMNIZED MARRIAGE OF HIS DAUGHTER AN D HAD SPENT RS. 15,00,110/- AND HAD REASON TO BELIEVE THAT THE INCO ME TO THAT EXTENT HAD ESCAPED ASSESSMENT. THE ASSESSING OFFICER RECO RDED THE REASONS FOR RE-OPENING UNDER SECTION 147 OF THE ACT AND ISSUED NOTICE UNDER SECTION 148 OF THE ACT. THEREAFTER, N OTICE UNDER SECTION 143(2) AND 142(1) OF THE ACT WERE ISSUED TO THE ASSESSEE. THE ASSESSEE, INITIALLY DID NOT PUT IN APPEARANCE B UT ON A LATER DATE, THE AUTHORIZED COUNSEL FOR THE ASSESSEE FURNISHED P ART INFORMATION. THE ASSESSEE WAS REQUISITIONED TO FURNISH EVIDENCE/ DETAILS OF SOURCE OF EXPENDITURE OF RS. 15,00,110/-. THE REPLY OF THE ASSESSEE IN THIS REGARD IS REPRODUCED UNDER PARA 6 AT PAGES 6 TO 8 O F THE ASSESSMENT ORDER. THE ASSESSING OFFICER ACCEPTED THE EXPLANAT ION TO THE EXTENT OF RS. 5,51,000/- FROM DIFFERENT PERSONS AND FURTHE R ACCEPTED CONTRIBUTION OF RS. 2,00,000/- BY THE ASSESSEE AND RS. 1,00,000/- BY HIS WIFE AND MADE AN ADDITION OF RS. 6,00,000/-. 10. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), TH E ISSUE OF INITIATION OF ASSESSMENT PROCEEDINGS WAS RAISED AND IT WAS CONTENDED THAT THE NOTICE FOR RE-ASSESSMENT UNDER S ECTION 148 OF THE ACT COULD NOT BE ISSUED SO LONG AS THE ASSESSMENT P ROCEEDINGS PENDING ON THE BASIS OF RETURN ALREADY FILED WERE N OT TERMINATED. THE ASSESSING OFFICER IN THE REMAND REPORT CONTENDE D THAT THE 4 ASSESSEE DID NOT RAISE ANY OBJECTION TO THE ISSUE O F NOTICE UNDER SECTION 148 OF THE ACT DURING THE COURSE OF ASSESSM ENT PROCEEDINGS. FURTHER RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN PUNJAB TRACTORS LTD. VS DCIT 254 ITR 242 (P&H). THE COMMISSIONER OF INCOME TAX VID E PARA 3.3 HELD AS UNDER : I HAVE CAREFULLY PURSUED THE RIVAL SUBMISSION. NOT ICE U/S 147 CAN BE ISSUED FOR THE PURPOSE OF ASSESSMENT/RE-ASSESSMENT ETC. ADMITTEDLY THE TIME TO ISSUE NOTICE U/S 143(2) HAD NOT EXPIRED WHE N NOTICE U/S 148 HAD BEEN ISSUED IN THIS CASE. HOWEVER, IN VIEW OF HON'B LE PUNJAB & HARYANA HIGH COURT JUDGMENT IN THE CASE 'OF PUNJAB TRACTORS LTD. VS, DCIT, 254 ITR 242, THERE IS NOTHING WRONG IN TH E NOTICE ON THIS GROUND. THIS GROUND OF APPEAL IS ACCORDINGLY DISMIS SED. 11. THE LD. AR FOR THE ASSESSEE STRESSED THAT THERE WAS NO MERIT IN THE INITIATION OF RE-ASSESSMENT PROCEEDINGS AND THE ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT AS NO MATERIAL WAS AVA ILABLE WITH THE ASSESSING OFFICER TO ESTABLISH ESCAPEMENT OF INCOME IN THE HANDS OF THE ASSESSEE. 12. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON THE O RDER OF COMMISSIONER OF INCOME TAX (APPEALS). 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAD FURNISHED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 15.02.20 10. ADMITTEDLY, THE SAID RETURN OF INCOME WAS NOT PROCESSED BY THE ASSESSING OFFICER. HOWEVER, NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 05.03.2010 I.E. DURING THE PERIOD WHEN THE NOTIC E UNDER SECTION 143(2) OF THE ACT COULD ALSO BE ISSUED. THE ASSESS ING OFFICER RECORDED THE FOLLOWING REASONS FOR INITIATING THE R E-ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT AND THEREAFTER ISSUED 5 NOTICE UNDER SECTION 148 OF THE ACT : THE UNDER SIGNED HAS INFORMATION IN POSSESSION THA T SH. MALWINDER SINGH HAS SOLEMNIZED THE MARRIAGE OF HIS DAUGHTER S MT. HARPREET KAUR IN THE MONTH OF FEBRUARY 2009 AND SPENT RS. 15, 00, 110/-. SH. MALWINDER SINGH IS NOT ASSESSED TO TAX. I HAVE THER EFORE, REASONS TO BELIEVE THAT INCOME TO THE EXTENT OF RS. 15,00,110 CHARGEABLE TO TAX FOR THE ASSESSMENT YEAR 20O9-10 HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE INCOME TAX ACT, 1961,.' 14. THE ASSESSING OFFICER WAS IN POSSESSION OF THE INFO RMATION THAT THE ASSESSEE HAD SOLEMNIZED MARRIAGE OF HIS DA UGHTER IN THE MONTH OF FEBRUARY,2009 AND THERE WAS FURTHER INFORM ATION THAT THE ASSESSEE HAD SPENT RS. 15,00,110/- ON THE SAID MARR IAGE FUNCTIONS AND IN VIEW THEREOF, THE ASSESSING OFFICER HAD REAS ON TO BELIEVE THAT INCOME TO THE EXTENT OF RS. 15,00,110/- HAD ESCAPED ASSESSMENT. ADMITTEDLY, THE ASSESSEE HAD SOLEMNIZED THE MARRIAG E OF HIS DAUGHTER DURING THE YEAR UNDER CONSIDERATION AND DU RING ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO FURNISH SOUR CES OF THE SAID EXPENDITURE TO WHICH ASSESSEE HAD FURNISHED THE EXP LANATION ALONGWITH EVIDENCES BEFORE THE ASSESSING OFFICER. HOWEVER, THE ASSESSING OFFICER ACCEPTED PART OF THE INFORMATION/ EVIDENCES BUT MADE AN ADDITION OF RS. 6,00,000/- IN THE HANDS OF THE ASSESSEE. THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S HAD NOT OBJECTED TO THE INITIATION OF RE-ASSESSMENT PROCEED INGS AND FOR THE FIRST TIME BEFORE THE COMMISSIONER OF INCOME TAX (A PPEALS) HAD RAISED AN ISSUE AGAINST THE INITIATION OF RE-ASSESS MENT PROCEEDINGS. THE ASSESSEE BEFORE US HAD ALSO AGITATED THE SAID I SSUE BY WAY OF ADDITIONAL GROUND OF APPEAL. 15. THE PLEA OF THE ASSESSEE AGAINST THE INITIATION OF RE-ASSESSMENT PROCEEDINGS WAS THAT WHERE THE TIME PERIOD FOR ISSU E OF NOTICE UNDER SECTION 143(2) OF THE ACT HAD NOT EXPIRED, THEN NOT ICE UNDER SECTION 6 148 OF THE ACT COULD NOT BE ISSUED. 16. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN PUNJAB T RACTORS LTD. VS DCIT (SUPRA) HAVE LAID DOWN THE PRINCIPLE T HAT THE CONDITION PRECEDENT FOR PROCEEDING UNDER SECTION 14 7/148 OF THE ACT WAS THAT THE ASSESSING OFFICER SHOULD HAVE REASON T O BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT. THE HON'BLE JURISDI CTIONAL HIGH COURT FURTHER HELD, THE NOTICE UNDER SECTION 147/148 ISSUED TO THE PETITIONER WAS NOT VITIATED MERELY FOR THE REASON T HAT NOTICE UNDER SECTION 143(2) HAD NOT BEEN ISSUED TO IT. 17. THE FACTS OF THE PRESENT CASE BEFORE US ARE IDENTIC AL TO THE FACTS BEFORE JURISDICTIONAL HIGH COURT IN PUNJAB T RACTORS LTD. VS DCIT (SUPRA) AND THE SAID RATIO LAID DOWN BY THE HO N'BLE HIGH COURT IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE WHERE THE ASSESSEE HAD FURNISHED THE RETURN OF INCOME BUT HAD NOT RECEIVED ANY NOTICE UNDER SECTION 143(2) OF THE ACT. HOWEVE R, THE ASSESSING OFFICER, IN VIEW OF THE INFORMATION RECEIVED UNDER WHICH IT WAS ALLEGED THAT THE INCOME HAD ESCAPED ASSESSMENT IN T HE HANDS OF THE ASSESSEE, HAD RECORDED REASONS FOR RE-OPENING THE A SSESSMENT AND THE ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT WA S THUS VALIDLY INITIATED. WE FIND NO MERIT IN THE PLEA OF THE ASSE SSEE IN THIS REGARD. 18. ANOTHER PLEA RAISED BY THE LD. AR FOR THE ASSESSEE WAS THAT NO ADDITION WAS WARRANTED IN THE HANDS OF THE ASSESSEE IN VIEW OF SIMILAR ISSUE BEING SETTLED BY THE CHANDIGARH BENCH OF TRIBUNAL IN ITO VS DIRECTOR MAJOR GENERAL S.S.CHAUHAN IN ITA NO . 368/CHD/2011 RELATING TO ASSESSMENT YEAR 2001-02 VI DE ORDER DATED 29.03.2012. IT WAS PUT TO THE LD. AR FOR THE ASSES SEE AGAIN AND AGAIN AS TO WHY THE SAID PLEA CAN BE RAISED WHEN NO GROUND OF APPEAL AGAINST THE ISSUE ON MERITS I.E. THE ADDITIO N OF RS. 6 LACS HAS 7 BEEN RAISED EITHER IN THE ORIGINAL GROUND OF APPEAL OR IN THE ADDITIONAL GROUND OF APPEAL. THE LD. AR FOR THE AS SESSEE HAD NO REPLY TO THE SAME AND IT WAS STRESSED AGAIN AND AGA IN THAT THE RE- ASSESSMENT PROCEEDINGS WERE NOT VALIDLY INITIATED. THE HON'BLE SUPREME COURT IN ACIT VS RAJESH JHAVERI STOCK BROKE RS P.LTD. 291 ITR 500 (S.C) HAD HELD AS UNDER : SUBSTANTIAL CHANGES HAVE BEEN MADE TO SECTION 143(1 ) WITH EFFECT FROM 1-6- 1999. UP TO 31-3-1989, AFTER A RETURN OF INCOME WAS FILED, THE ASSESSING OFFICER COULD MAKE AN ASSESSMENT UNDER SECTION 143( 1) WITHOUT REQUIRING THE PRESENCE OF THE ASSESSEE OR THE PRODUCTION BY HIM O F ANY EVIDENCE IN SUPPORT OF THE RETURN. WHERE THE ASSESSEE OBJECTED TO SUCH AN ASSESSMENT OR WHERE THE OFFICER WAS OF THE OPINION THAT THE ASSESSMENT WAS INCORRECT OR INCOMPLETE OR THE OFFICER DID NOT COMPLETE THE ASSESSMENT UNDER S ECTION 143(1), BUT WANTED TO MAKE AN INQUIRY, A NOTICE UNDER SECTION 143(2) W AS REQUIRED TO BE ISSUED TO THE ASSESSEE REQUIRING HIM TO PRODUCE EVIDENCE IN S UPPORT OF HIS RETURN. AFTER CONSIDERING THE MATERIAL AND EVIDENCE PRODUCED AND AFTER MAKING NECESSARY INQUIRIES, THE OFFICER HAD POWER TO MAKE ASSESSMENT UNDER SECTION 143(3). WITH EFFECT FROM 1-4-1989, THE PROVISIONS UNDERWENT SUBSTANTIAL AND MATERIAL CHANGES. A NEW SCHEME WAS INTRODUCED AND IN THE NEW SUBSTITUTED SECTION 143(1) PRIOR TO THE SUBSEQUENT SUBSTITUTION WITH EF FECT FROM 1-6-1999, IN CLAUSE (A), A PROVISION WAS MADE THAT WHERE A RETUR N WAS FILED UNDER SECTION 139 OR IN RESPONSE TO A NOTICE UNDER SECTION 142(1) , AND ANY TAX OR REFUND WAS FOUND DUE ON THE BASIS OF SUCH RETURN AFTER ADJUSTM ENT OF TAX DEDUCTED AT SOURCE, ANY ADVANCE TAX OR ANY AMOUNT PAID OTHERWIS E BY WAY OF TAX OR INTEREST, AN INTIMATION WAS TO BE SENT WITHOUT PREJ UDICE TO THE PROVISIONS OF SECTION 143(2) TO THE ASSESSEE SPECIFYING THE SUM S O PAYABLE AND SUCH INTIMATION WAS DEEMED TO BE A NOTICE OF DEMAND ISSU ED UNDER SECTION 156. THE FIRST PROVISO TO SECTION 143(1)( A ) ALLOWED THE DEPARTMENT TO MAKE CERTAIN ADJUSTMENTS IN THE INCOME OR LOSS DECLARED IN THE R ETURN. [PARA 11] WHAT WERE PERMISSIBLE UNDER THE FIRST PROVISO TO SE CTION 143(1)( A ) TO BE ADJUSTED WERE THAT, ( I ) ONLY APPARENT ARITHMETICAL ERRORS IN THE RETURN, ACCOUNTS OR DOCUMENTS ACCOMPANYING THE RETURN, ( II ) LOSS CARRIED FORWARD, DEDUCTION ALLOWANCE OR RELIEF, WHICH WAS PRIMA FACIE ADMISSIBLE ON THE BASIS OF INFORMATION AVAILABLE IN THE RETURN BUT NOT CLAI MED IN THE RETURN AND SIMILARLY ( III ) THOSE CLAIMS WHICH WERE ON THE BASIS OF THE INFOR MATION AVAILABLE IN THE RETURN, PRIMA FACIE INADMISSIBLE, WERE TO BE RECTIFIED/ALLOWED/DISALLOWED. WHAT WAS PERMISSIBLE WAS CORRECTION OF ERRORS APPARENT ON THE FACE OF THE DOCUMENTS ACCOMPANYING THE RETURN. THE ASSESSING OFFICER HAD NO AUTHORITY TO MAKE ADJUSTME NTS OR ADJUDICATE UPON ANY DEBATABLE ISSUES. IN OTHER WORDS, THE ASSESSING OFFICER HAD NO POWER TO GO BEHIND THE RETURN, ACCOUNTS OR DOCUMENTS, EITHER IN ALLOWING OR IN DISALLOWING DEDUCTIONS, ALLOWANCE OR RELIEF. [PARA 12] THE INTIMATION UNDER SECTION 143(1)( A ) IS GIVEN WITHOUT PREJUDICE TO THE PROVISIONS OF SECTION 143(2). THOUGH TECHNICALLY TH E INTIMATION ISSUED WAS DEEMED TO BE A DEMAND NOTICE ISSUED UNDER SECTION 1 56, THAT DID NOT PER SE PRECLUDE THE RIGHT OF THE ASSESSING OFFICER TO PROC EED UNDER SECTION 143(2). THAT RIGHT IS PRESERVED AND IS NOT TAKEN AWAY. BETW EEN THE PERIOD FROM 1-4- 1989 TO 31-3-1998, THE SECOND PROVISO TO SECTION 14 3(1)( A ) REQUIRED THAT WHERE ADJUSTMENTS WERE MADE UNDER THE FIRST PROVISO TO SECTION 143(1)( A ), AN INTIMATION HAD TO BE SENT TO THE ASSESSEE, NOTWITHS TANDING THAT NO TAX OR 8 REFUND WAS DUE FROM OR TO HIM AFTER MAKING SUCH ADJ USTMENTS. WITH EFFECT FROM 1-4-1998, THE SECOND PROVISO TO SECTION 143(1) ( A ) WAS SUBSTITUTED BY THE FINANCE ACT, 1997, WHICH WAS OPERATIVE TILL 1-6-199 9. THE REQUIREMENT WAS THAT AN INTIMATION WAS TO BE SENT TO THE ASSESSEE W HETHER OR NOT ANY ADJUSTMENT HAD BEEN MADE UNDER THE FIRST PROVISO TO SECTION 143(1) AND NOTWITHSTANDING THAT NO TAX OR INTEREST WAS FOUND D UE FROM THE ASSESSEE CONCERNED. BETWEEN 1-4-1998 AND 31-5-1999, SENDING OF AN INTIMATION UNDER SECTION 143(1)( A ) WAS MANDATORY. THUS, THE LEGISLATIVE INTENT IS VE RY CLEAR FROM THE USE OF THE WORD INTIMATION AS SUBSTITUTE D FOR ASSESSMENT THAT TWO DIFFERENT CONCEPTS EMERGED. WHILE MAKING AN ASSESSM ENT, THE ASSESSING OFFICER IS FREE TO MAKE ANY ADDITION AFTER GRANT OF OPPORTUNITY TO THE ASSESSEE. BY MAKING ADJUSTMENTS UNDER THE FIRST PROVISO TO SE CTION 143(1)( A ), NO ADDITION WHICH IS IMPERMISSIBLE BY THE INFORMATION GIVEN IN THE RETURN COULD BE MADE BY THE ASSESSING OFFICER. THE REASON IS THA T UNDER SECTION 143(1)( A ) NO OPPORTUNITY IS GRANTED TO THE ASSESSEE AND THE A SSESSING OFFICER PROCEEDS ON HIS OPINION ON THE BASIS OF THE RETURN FILED BY THE ASSESSEE. THE VERY FACT THAT NO OPPORTUNITY OF BEING HEARD IS GIVEN UNDER S ECTION 143(1)( A ) INDICATES THAT THE ASSESSING OFFICER HAS TO PROCEED AFTER ACC EPTING THE RETURN AND MAKING THE PERMISSIBLE ADJUSTMENTS ONLY. AS A RESUL T OF INSERTION OF THE EXPLANATION TO SECTION 143 BY THE FINANCE (NO. 2) ACT OF 1991 W ITH EFFECT FROM 1-10-1991 AND, SUBSEQUENTLY, WITH EFFECT FROM 1-6-1 994, BY THE FINANCE ACT, 1994, AND ULTIMATELY OMITTED WITH EFFECT FROM 1-6-1 999, AN INTIMATION SENT TO THE ASSESSEE UNDER SECTION 143(1)( A ) WAS DEEMED TO BE AN ORDER FOR THE PURPOSES OF SECTION 246 BETWEEN 1-6-1994 AND 31-5-1 999, AND UNDER SECTION 264 BETWEEN 1-10-1991 AND 31-5-1999. THE EXPRESSION S INTIMATION AND ASSESSMENT ORDER HAVE BEEN USED AT DIFFERENT PLAC ES. THE CONTEXTUAL DIFFERENCE BETWEEN THE TWO EXPRESSIONS HAS TO BE UN DERSTOOD IN THE CONTEXT THE EXPRESSIONS ARE USED. THE ASSESSMENT IS USED AS MEA NING SOMETIMES THE COMPUTATION OF INCOME, SOMETIMES THE DETERMINATIO N OF THE AMOUNT OF TAX PAYABLE AND SOMETIMES THE WHOLE PROCEDURE LAID DO WN IN THE ACT FOR IMPOSING LIABILITY UPON THE TAX PAYER. IN THE SCHE ME OF THINGS, AS NOTED ABOVE, THE INTIMATION UNDER SECTION 143(1)( A ) CANNOT BE TREATED TO BE AN ORDER OF ASSESSMENT. THE DISTINCTION IS ALSO WELL B ROUGHT OUT BY THE STATUTORY PROVISIONS AS THEY STOOD AT DIFFERENT POINTS OF TIM E. UNDER SECTION 143(1)( A ), AS IT STOOD PRIOR TO 1-4-1989, THE ASSESSING OFFICE R HAD TO PASS AN ASSESSMENT ORDER IF HE DECIDED TO ACCEPT THE RETURN, BUT UNDER THE AMENDED PROVISION, THE REQUIREMENT OF PASSING OF AN ASSESSMENT ORDER HAS B EEN DISPENSED WITH AND INSTEAD AN INTIMATION IS REQUIRED TO BE SENT. VARIO US CIRCULARS SENT BY THE CBDT SPELL OUT THE INTENT OF THE LEGISLATURE, I.E., TO MINIMIZE THE DEPARTMENTAL WORK TO SCRUTINIZE EACH AND EVERY RETURN AND TO CON CENTRATE ON SELECTIVE SCRUTINY OF RETURNS. UNDER THE FIRST PROVISO TO THE NEWLY SUBSTITUTED SECTION 143(1), WITH EFFECT FROM 1-6-1999, EXCEPT AS PROVID ED IN THE PROVISION ITSELF, THE ACKNOWLEDGEMENT OF THE RETURN SHALL BE DEEMED T O BE AN INTIMATION UNDER SECTION 143(1) WHERE ( A ) EITHER NO SUM IS PAYABLE BY THE ASSESSEE, OR ( B ) NO REFUND IS DUE TO HIM. IT IS SIGNIFICANT THAT THE AC KNOWLEDGEMENT IS NOT GIVEN BY ANY ASSESSING OFFICER, BUT MOSTLY BY MINISTERIAL ST AFF. NO ASSESSMENT CAN BE DONE BY THEM. THE INTIMATION UNDER SECTION 143(1)( A ) WAS DEEMED TO BE A NOTICE OF DEMAND UNDER SECTION 156, FOR THE APPAREN T PURPOSE OF MAKING MACHINERY PROVISIONS RELATING TO RECOVERY OF TAX AP PLICABLE. BY SUCH APPLICATION ONLY RECOVERY INDICATED TO BE PAYABLE I N THE INTIMATION BECAME PERMISSIBLE. AND NOTHING MORE CAN BE INFERRED FROM THE DEEMING PROVISION. [PARA 13] SECTION 147 AUTHORISES AND PERMITS THE ASSESSING OF FICER TO ASSESS OR REASSESS INCOME CHARGEABLE TO TAX IF HE HAS REASON TO BELIEV E THAT INCOME FOR ANY ASSESSMENT YEAR HAS ESCAPED ASSESSMENT. THE WORD R EASON IN THE PHRASE REASON TO BELIEVE WILL MEAN CAUSE OR JUSTIFICATIO N. IF THE ASSESSING OFFICER HAS CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT INCOME HAS ESCAPED 9 ASSESSMENT, IT CAN BE SAID TO HAVE REASON TO BELIE VE THAT AN INCOME HAS ESCAPED ASSESSMENT. THE SAID EXPRESSION CANNOT BE R EAD TO MEAN THAT THE ASSESSING OFFICER SHOULD HAVE FINALLY ASCERTAINED T HE FACT BY LEGAL EVIDENCE OR CONCLUSION. THE FUNCTION OF THE ASSESSING OFFICER I S TO ADMINISTER THE STATUTE WITH SOLICITUDE FOR THE PUBLIC EXCHEQUER WITH AN IN -BUILT IDEA OF FAIRNESS TO TAXPAYERS. [PARA 16] THE SCOPE AND EFFECT OF SECTION 147, AS SUBSTITUTED WITH EFFECT FROM 1-4-1989, AS ALSO SECTIONS 148 TO 152 ARE SUBSTANTIALLY DIFFE RENT FROM THE PROVISIONS AS THEY STOOD PRIOR TO SUCH SUBSTITUTION. UNDER THE OL D PROVISIONS OF SECTION 147, SEPARATE CLAUSES ( A ) AND ( B ) LAID DOWN THE CIRCUMSTANCES UNDER WHICH INCOME ESCAPING ASSESSMENT FOR THE PAST ASSESSMENT YEARS C OULD BE ASSESSED OR REASSESSED. TO CONFER JURISDICTION UNDER SECTION 14 7( A ) TWO CONDITIONS WERE REQUIRED TO BE SATISFIED - FIRSTLY, THE ASSESSING O FFICER MUST HAVE REASON TO BELIEVE THAT INCOME, PROFITS OR GAINS CHARGEABLE TO INCOME-TAX HAD ESCAPED ASSESSMENT, AND SECONDLY, HE MUST ALSO HAVE REASON TO BELIEVE THAT SUCH ESCAPEMENT HAD OCCURRED BY REASON OF EITHER ( I ) OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO FILE A RETURN UNDER SECTION 139 FOR ANY ASSESSMENT YEAR WITH THE ASSESSING OFFICER OR ( II ) TO DISCLOSE FULLY OR TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT OF THAT YEAR. BOTH THE SE CONDITIONS WERE CONDITIONS PRECEDENT TO BE SATISFIED BEFORE THE ASS ESSING OFFICER COULD HAVE JURISDICTION TO ISSUE NOTICE UNDER SECTION 148, REA D WITH SECTION 147( A ). BUT UNDER THE SUBSTITUTED SECTION 147 EXISTENCE OF ONLY THE FIRST CONDITION SUFFICES. IN OTHER WORDS, IF THE ASSESSING OFFICER, FOR WHATE VER REASON, HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, IT CONF ERS JURISDICTION TO REOPEN THE ASSESSMENT. IT IS, HOWEVER, TO BE NOTED THAT BO TH THE CONDITIONS MUST BE FULFILLED IF THE CASE FALLS WITHIN THE AMBIT OF THE PROVISO TO SECTION 147. THE INSTANT CASE WAS COVERED BY THE MAIN PROVISION AND NOT THE PROVISO. [PARA 17] SO LONG AS THE CONDITIONS OF SECTION 147 ARE FULFIL LED, THE ASSESSING OFFICER IS FREE TO INITIATE PROCEEDINGS UNDER SECTION 147 AND FAILURE TO TAKE STEPS UNDER SECTION 143(3) WILL NOT RENDER THE ASSESSING OFFICE R POWERLESS TO INITIATE REASSESSMENT PROCEEDINGS, EVEN WHEN INTIMATION UNDE R SECTION 143(1) HAS BEEN ISSUED. [PARA 18] THE INEVITABLE CONCLUSION WAS THAT THE HIGH COURT H AD WRONGLY APPLIED, ADANI EXPORTS CASE ( SUPRA ) WHICH HAD NO APPLICATION TO THE INSTANT CASE, ON THE FACTS, IN VIEW OF THE CONCEPTUAL DIFFERENCE BET WEEN SECTION 143(1) AND SECTION 143(3). THUS, THE APPEAL WAS TO BE ALLOWED. 19. IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE SUPRE ME COURT IN ACIT VS RAJESH JHAVERI STOCK BROKERS P.LTD. (SUP RA) WHERE THE ASSESSING OFFICER HAD INFORMATION ABOUT ESCAPEMENT OF INCOME IN THE HANDS OF THE PRESENT CONCERN, THEN THE ASSESSIN G OFFICER IS EMPOWERED TO RECORD REASONS FOR RE-OPENING AND INIT IATE THE PROCEEDINGS BY ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT. HENCE, IN THE FACTS OF THE CASE WHERE THE ASSESSING OFFICE R HAD THE INFORMATION OF ESCAPEMENT OF INCOME IN THE HANDS OF THE ASSESSEE, 10 THE RECORDING OF REASONS BY THE ASSESSING OFFICER U NDER SECTION 147 AND ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT IS VALID INITIATION OF RE-ASSESSMENT PROCEEDINGS AND WE FIND NO MERIT I N THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE. 20. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH SEPTEMBER,2014. SD/- SD/- ( T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17 TH SEPTEMBER,2014 POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRA R/ITAT/CHD