CIT vs. Baldwin Boys High School; [2014] 45 taxmann. com 33 (Karn):
The assessee trust, was running educational institution. For the relevant assessment years, the assessee had declared income ‘Nil’, claiming exemption u/s. 10(23C) (vi) of the Income-tax Act, 1961. Assessments were completed allowing the claim. Subsequently, the assessments were reopened by issuing notices u/s. 148 of the Act dated 30-01-2004, on the ground that the assessee was not registered u/s. 12A nor had requisite approval u/s. 10(23C)(vi) of the Act. The Tribunal set aside reassessment proceedings taking a view that notices u/s. 148 to reopen assessment was issued without recording reasons as contemplated by s/s. (2) of section 148 which vitiated the whole proceedings.
On appeal by the Revenue, the following question was raised:
“Whether on the facts and in the circumstances of the case and in law, the notice issued by the Assessing Officer u/s. 148 of the Income-tax Act, 1961 without recording reasons as contemplated by s/s. (2) of section 148 of the Act would vitiate the whole proceedings? In other words, whether the reasons as contemplated by s/s.(2) of section 148 of the Act, in the present cases, were recorded after issuance of notice u/s. 148 of the Act and, therefore, the whole proceedings are bad in law?”
The Karnataka High Court upheld the decision of the Tribunal and held as under:
“i) F rom bare perusal of section 148, it is clear that the Assessing Officer is obliged to record reasons before issuing notice u/s. 148. It is true that in one of the files, there was a draft of reasons purportedly prepared by the Assessing Officer on 20-01-2004. It was not signed by the Assessing Officer. The reasons recorded by the Assessing Officer were typed, as is clear from the printout of the original reasons, on 04-02-2004. The typed date was struck off with pen and the date 30-01- 2004 was written by hand with the same pen. Though the original date (typed) was struck off with pen still the typed date is visible/could be read or is clearly seen, and it was typed as 04-02-2004.
ii) Before the Tribunal, a controversy was raised that the printout of the reasons was computer generated and it was printed with the date of printing automatically by the Computer. Be that as it may, the fact remains that the typed date or the date of printout was 04-02-2004 and that it was changed to 30-01-2004 as the date of reasons recorded under s/s. (2) of section 148.
iii) Thus, the record was set right by showing that the date of the notice and the date on which the reasons were recorded was same. Why and how the date 04- 02-2004 is appearing on the original reasons recorded under s/s. (2) of section 148 is not explained by the Assessing Officer.
iv) On perusal of the original records, it is clear that the reasons were prepared on 04-02-2004 whereas the notice was sent on 30-01-2004. It is also pertinent to note that the contents of draft reasons and the original reasons recorded by the Assessing Officer do not tally.
v) Thus, from perusal of the order passed by the Tribunal and so also the other materials placed on record, it is clear that it is a finding of fact recorded by the Tribunal holding that notice was issued even before the reasons were recorded. In such circumstances, there was no reason to interfere with the finding of facts recorded by the Tribunal.”
