| S. 147/ 148: Failure to comply with the procedure prescribed in G.K.N. Drive Shaft (India) Ltd. vs. ITO 259 ITR 19 (SC) renders the assessment order invalid & void ab initio |
In the first round of the appeal, the ITAT set aside the matter to the file of the AO with the direction to dispose of the objections raised by the assessee to the jurisdiction of the AO for issuance of notice u/s. 148 of the Act first by passing a speaking order in view of the decision of the Hon'ble Supreme Court in G.K.N. Drive Shaft (India) Ltd. vs. ITO 259 ITR 19 (SC). However, though the assessee raised objection on the issue of jurisdiction for issuance of notice u/s 148 of the Act, the AO while disposing of the said objection also proceeded to pass the reassessment order instead of restricting itself for the disposal of the objection passing a separate order. On appeal by the assessee to the Tribunal HELD:
The ratio of G.K.N. Drive Shaft (India) Ltd. vs. ITO 259 ITR 19 (SC) and General Motors India Pvt. Ltd vs. DCIT 353 ITR 244 (Guj) is that the Assessing Officer is mandated to decide the objection to the notice u/s 148 of the Act and supply or communicate it to the assessee. Thereafter, the assessee gets an opportunity to challenge the order in a writ petition. Thereafter, the AO may pass the reassessment order. It is not open to the AO to decide the objection raised against notice u/s 148 by a composite assessment order. Thus, the Assessing Officer was required to first decide the objection of the assessee filed u/s 148 and serve a copy of the order on assessee. And after giving some reasonable time to the assessee for challenging his order, it is open to him to pass an assessment order. Since such compliance has not been made by the Assessing Officer in the present case, we hold the impugned assessment order as not valid and the same is held as void ab initio.
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- Bharat Sewa Sansthan vs. DCIT (ITAT Lucknow) In the instant case, undisputedly the return was not filed under section 139(1) of the Act, it was rather a belated return as it was filed on 19.1.1995 and due date for filing of return was 31.10.1993. The return of the assessee was, however, processed under section 143(1) of…
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PFA
This is for information to all that purposefully I give another relevant Judgments for knowledge ........ So as to be easier for his case and representation
| S. 147/ 148: If the recorded reasons show contradiction and inconsistency it means necessary satisfaction in terms of the statutory provision has not been recorded at all. The Court cannot be called upon to indulge in guess work or speculate as to which reason has enabled the AO to act in terms of s. 147 |
(i) Though the power to reopen is much wider, but the interpretation that the words "reason to believe" must receive an interpretation which is in consonance with the scheme of the law. There cannot be arbitrary powers to the Assessing Officer to reopen assessment on the basis of mere change of opinion. The Assessing Officer has no power to review. He has only a power to reassess. In the garb of reopening the assessment review cannot take place.
(ii) If the assessee has not made full and true disclosure of income and its particulars in the return or during the assessment proceedings, then, we do not see how these figures have been derived by the Assessing officer. In one breath he says that he has perused the records and which reveals the above position. At the same time, he holds that the petitioner has not made full and true disclosure of income and its particulars in the return or during assessment proceedings. This contradiction and inconsistency in the reasons would indicate that the necessary satisfaction in terms of statutory provision has not been recorded at all. This would be further clear if one refers to the other reason viz. that the income has escaped assessment and also in view of sub-clause (I) of clause (c) of Explanation-2 to section 147 of the Act if income chargeable to tax has been underassessed. Such recording of reasons can never be termed as satisfactory. There is either a satisfaction based on the income escaping assessment by virtue of it being chargeable to tax and, therefore, reassessment and in terms of substantive provision is required. The satisfaction can also be said to be that the case is covered by the deeming fiction and the income chargeable to tax has escaped assessment by virtue of Explanation 2 clause (a), (b), (ba) and (c) and (d). However, if one refers to the failure on the part of the assessee to make full and true disclosure of income, then, what the Assessing Officer has in mind is the first proviso to section 147. That enables reassessment after expiry of four years from the end of the relevant assessment year if the income chargeable to tax has escaped assessment for such assessment year by reason of failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year. In the present case, both are referred viz. the first proviso to section 147 and Explanation 2 thereof. However, this is not a case where action under section 147 is taken after the expiry of four years from the end of the relevant assessment year but it is within four years period. Thus, this proviso cannot be of any assistance. At the same time, the Assessing Officer says that he has reason to believe that income has escaped assessment and also in view of sub-clause (1) of clause (c) of Explanation-2. The Court cannot be called upon to indulge in guess work or speculate as to which reason has enabled the Assessing Officer to act in terms of this section. If more than one reason is assigned as in this case then the Court can sustain the notice only if it is of the opinion that an erroneous reference to a statutory provision has been made but still there is an income chargeable to tax which has escaped assessment and on account of which issuance of notice is justified. Which ground is sufficient to sustain the notice is something which must be indicated in clear terms and should not be a matter of speculation or guess work.
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I had seen some several years back Mr Laxminarayan T Thakkar in Safron Clothes....on road side of Ahmedabad in Navrangpua !!!
The Income Tax department has adopted the aggressive strategy of 'naming and shaming' some large tax defaulters by publishing names of 18 entities who owe over Rs 500 crore tax to the exchequer.
The step is aimed to publicise and put these names in public domain so that the common man can come forward to help the department in knowing the whereabouts of these. The step is to enhance public awareness against these entities who are acting against law. These names have been put up on the department's website.
The Government's aggressive approach includes the names of 18 tax defaulters. The names in the list are Goldsukh Trade (Rs 75.47 cr), Somani Cements (Rs 27.47 crore), Blue Information Technology (Rs 75.11 cr), Appletech Solutions (Rs 27.07 cr), Jupiter Business (Rs 21.31 cr), Hirak Biotech (Rs 18.54 cr), Icon Bio Pharma & Healthcare Ltd (Rs 17.69 cr), Banyan & Berry Alloys (Rs 17.48 cr), Laxminarayan T Thakkar (Rs 12.49 cr), Virag Dyeing & Printing (Rs 18.57 cr), Poonam Industries (Rs 15.84 cr), Kunvar Ajay Food Pvt Ltd (Rs 15 cr), Victor Credit & Construction (Rs 13.81 cr), Noble Merchandise (Rs 11.93 cr) and G K Dharne (Rs 38.31 crore).
If you know the whereabouts of these wilful defaulters, please contact the nearest income-tax office.
Dismisses complaint against Suzuki Motorcycles alleging restrictive conditions imposition on two-wheelers sale |
CCI rejects two-wheeler seller's complaint against Suzuki Motorcycle India Pvt Ltd ('Suzuki') alleging imposition of restrictive conditions on sale of two wheelers, thereby denying access to local auto garage owners; Holds that in relevant market of manufacturing & sale of two wheeler vehicle in India, there are many players like Hero MotoCorp Ltd., Honda Motorcycle and Scooter India (Pvt.) Ltd., Bajaj Auto Ltd etc, thus Suzuki has no dominant position; Thus, concludes that, "no prima facie case of contravention of the provisions of section 4 of the Act is made out against the Opposite Party" :CCI |
CCI approves divestment of 7 products to Emcure for Sun Pharma- Ranbaxy merger |
Pursuant to its directions to Sun Pharmaceuticals Industries Ltd (Sun Pharma) and Ranbaxy Laboratories Ltd (Ranbaxy) to divest certain products for their merger, CCI approves Emcure Pharmaceuticals Limited ('Emcure') as purchaser of their 7 divested products; Relying on Monitoring Agency's (PwC) report, concludes Emcure as a viable, independent and effective competitor in relevant markets, having no connection with parties and meeting the 'Purchaser requirements' stipulated by CCI; Observes insignificant market share of Emcure in overlapping products and states that horizontal overlap, if any, is not likely to cause any appreciable adverse effect on competition; In relation to vertical foreclosure, states "it could raise competition concerns only if the purchaser (i.e. Emcure) would have the ability as well as the incentive to substantially foreclose access to inputs"; Orders parties to transfer legal title of Divested Products to Emcure within six months and submit compliance report:CCI |
Rejects 'abuse of dominance' complaint against Tamil Nad Mercantile Bank, absent evidence |
CCI dismisses timber seller's complaint against Tamil Nad Mercantile Bank Ltd (opposite party – 'OP') alleging its abusive conduct by imposing unfair terms and conditions in its loan agreements/ sanction letters; Observes that in relevant market for 'provision of working capital facilities by banks in the state of Tamil Nadu', many banks including SBI participate, thus, OP is not in dominant position; Also observes that, "Moreover, no material has been placed on record to show that the Opposite Party operates independently of the competitive forces prevailing in the relevant market or that it can affect its competitors or consumers or the relevant market in its favour":CCI |
CCI approves USA based automotive component co's acquisition by German co. |
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Approves Shasun-Strides merger, observes insignificant market share & impossibility of vertical foreclosure |
CCI approves merger of Shasun Pharmaceuticals Limited ('Shasun'), engaged in development & selling of active pharmaceutical ingredients (APIs) and formulations, into Strides Arcolab Limited ('Strides'), engaged in development of generic pharmaceutical products; Observes that though parties have overlaps in relation to business activities pertaining to medicinal formulations, their combined market share is insignificant and unlikely to raise any competition concerns; With respect to vertical foreclosure, notes that there were other API suppliers for entities engaged in downstream market of formulations, however, observes that, "the merged entity would neither have the ability nor the incentive to substantially foreclose access to its inputs for these entities. Thus, the proposed combination is not likely to result in any vertical foreclosure in any of the relevant markets of these three APIs" :CCI |
Family arrangement MoU can't obliterate Board Resolution; Dismisses 'dressed-up' Sec 397/398 petition |
CLB dismisses oppression mismanagement petition alleging that a board resolution, whereby a unit of company was closed and its liabilities were distributed to other two units, was in contravention of MoU, under which petitioner had independent autonomy over one of the units; Holds that the unit was not a personal fiefdom of petitioner and MoU was only a family arrangement which could not bind a company, as management of company rests solely in its Board of Directors; Also observes that a suit praying for similar relief was pending before Delhi HC, thus, instant matter was sub-judice, holds that, "the petition is not only an act of forum shopping but also amounts to abuse of process of this Board"; Rejects petitioner's contention that proceedings before HC were without jurisdiction, observes that, "in absence of any express or implied bar it cannot be said that sections 397, 398 of Companies Act, 1956 excludes jurisdiction of ordinary courts"; Also holds that instant petition was 'dressed-up' and consent of other 187 consenters to file such petition was mechanically obtained without application of their mind, which is in contravention of Sec. 399, thus states, "conduct of the petitioners in filing this petition lacks probity"; Noting that consent was obtained with regard to averments, allegations with respect to oppression / mismanagement and not with respect to the relief prayed for in instant petition, holds that consenters must specifically consent to seeking of reliefs claimed by petitioners, relies on Madras HC ruling in M.C. Duraiswami vs Sakhti Sugars Ltd:New Delhi CLB |
The order was passed by Justice D.R. Deshmukh, Chairman, CLB. Senior Advocate U.K. Chaudhary alongwith Advocates Manisha Chaudhary, Himanshu Vij and Avanti T. Chandele argued on behalf of the petitioners. Respondents were represented by Advocates Sudhir K. Makkar, Arun Kathpalia, Anil Airi, Meenakshi Singh and Nitish Kumar. |
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