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II. Direct Taxes Case Laws:
1. Indu Lata Rangwala Vs. Dy. CIT, W.P.(C) 1393/2002, Date of Judgment: 18.05.2016, High Court of Delhi
Issue:
Whether
the reassessment u/s 147 of the Income Tax Act, 1961 can be opened on
the basis of “reasons to believe” based on documents already filled
before the AO during processing of return u/s 143(1) of the Act.
Held- Yes
Brief Facts:
The assessee was a partner in a partnership firm which was taken over
by the petitioner as a sole proprietorship concern. The loss returns
were filed by the assessee & the partnership firm for the relevant
period. Both these returns were filled along with statement of accounts,
audit report etc. These returns were processed u/s 143(1) which was
duly accepted by authorities and the acknowledgment of the same was
issued. Later, on the basis scrutiny of the documents submitted along
with return, Ld. A.O. initiated assessment u/s 147. Assessee contended
that reasons to believe as recorded by Ld. A.O. are on the basis of
documents already submitted during assessment u/s 143(1) and there was
no new tangible material. Therefore this is merely change of opinion.
The
Hon’ble High Court held that an intimation u/s 143(1)(a) cannot be
treated to be an order of assessment. There being no assessment u/s
143(1)(a), the question of change of opinion does not arise and where
the initial return is processed u/s 143(1) of the Act and an intimation
is sent to the Assessee, the reopening of such assessment no doubt
requires the AO to form reasons to believe that income has escaped
assessment, but such reasons do not require any fresh tangible material.
Therefore, it was held that the assessment proceeding u/s 147 can be
carried forward.
(Please click here for judgment)
2. M/s Nut ‘n’ Spices Vs. ACIT, I.T.A. No. 545/Mad/2016, Date of Pronouncement: 20.05.2016, ITAT - Chennai
Issue:
Whether for the purpose of calculation of Interest u/s 234B of the
Income Tax Act, 1961 subsequent to assessment of income u/s 147 of the
Act made after the processing of return u/s 143(1) of the Act, the
provisions of sub-section (1) of Section 234B are to be applied and not
sub-section (3)?
Held: Yes
Brief facts:
The assessee filed its return of income which was processed u/s 143
(1). Subsequently, a survey u/s.133A of the Act was conducted and the
case was reopened u/s 147 of the Act. The assessment was made for the
first time and was completed u/s 143 (3) r.w.s. 147 which resulted in
tax demand. Interest u/s 234B was worked out as per the provisions of
sub-section (1) of section 234B. The Assessee contended that the
interest u/s 234B should have been calculated as per sub-section (3) and
not as per sub-section (1). The Ld. CIT(A) upheld the order of AO.
Aggrieved by the order of the CIT(A), the assessee is in appeal before
the Hon’ble ITAT.
Held:
The Hon’ble ITAT held that intimation u/s.143(1) is not an assessment
and thus, the case of “Assessment ” for the first time in the hands of
assessee u/s.147 will fall under sub-section(1) of section 234B. As per
Explanation-2 it is clarified that where, an assessment is made for the
first time u/s 147 or section 153A, the assessment shall be regarded as a
regular assessment for the purposes of this section and the interest
u/s 234B must be calculated as per the provisions of section 234B(1).
Therefore, the contention of the assessee that the interest should have
been calculated under sub-section (3) of section 234B is rejected by the
Hon’ble ITAT.
(Please click here for judgment)
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