38. Principal CIT vs. Govind Gopal Goyal [2020] 423 ITR 106 (Guj.) Date of order: 15th July, 2019 A.Y.: 2011-12
Reassessment – Sections 124(3), 142(1),
143(3), 147, 148 of ITA, 161 – Notice u/s 148 – Assessment proceedings pursuant
to notice u/s 142(1) pending and time for completion of assessment not having
lapsed – Issue of notice u/s 148 not permissible – That assessee had not
objected to jurisdiction of A.O. not relevant; A.Ys. 2011-12
The Directorate of Revenue Intelligence
received information that the assessee had undervalued the import price of polyester films during the A.Y. 2011-12. At the relevant point of time, it was noticed that the assessee had not filed
his return of income for the A.Y. 2011-12. Therefore, a notice dated 1st December, 2011 u/s
142(1) was issued against the assessee to furnish his return of income for the A.Y. 2011-12 by 9th December, 2011. The assessee did not file his return of income and submitted a letter dated 3rd January, 2012,
stating that his books of accounts and other records were seized by the Directorate of Revenue Intelligence and that he had
applied to be provided with a copy of the books of accounts and other records
and informed the A.O. that he would file his return of income once he was
provided with the books and other records. While the assessment proceedings
initiated u/s 142(1) were pending, the A.O. issued a notice dated 16th January,
2013 u/s 148 against the assessee to file his return of income for the A.Y.
2011-12. The assessment proceedings were completed, making an addition on
account of unexplained expenditure u/s 69C and estimating the net profit.
The Tribunal held that when the assessment
proceedings were already initiated by issuing of notice u/s 142(1) calling for
the return of income, no notice u/s 148 should have been issued and the
assessment was required to be completed within the time limit allowed u/s
143(3) or section 144.
On appeal by the Revenue, the Gujarat High
Court upheld the decision of the Tribunal and held as under:
‘i) It is settled law that unless the return
of income filed by the assessee is disposed of, notice for reassessment u/s 148
cannot be issued, i.e., no reassessment proceedings can be initiated so long as
the assessment proceedings are pending on the basis of the return already filed
(and) are not terminated.
ii) If an assessment is pending either by
way of original assessment or by way of reassessment proceedings, the A.O.
cannot issue a notice u/s 148.
iii) Section 142(1) and section 148 cannot
operate simultaneously. There is no discretion vested with the A.O. to utilise
either of them. The two provisions govern different fields and can be exercised
in different circumstances. If income escapes assessment, then the only way to
initiate assessment proceedings is to issue a notice u/s 148.
iv) Income
could not be said to have escaped assessment u/s 147 when the assessment proceedings
were pending. If the notice had already been issued u/s 142 and the proceedings
were pending, a return u/s 148 could not be called for. The Tribunal had
applied the correct principle of law and had passed the order holding that the
assessment order passed u/s 143(3) read with section 147 was bad in law and
could not be sustained. Section 124(3) which stipulates a bar to any contention
about lack of jurisdiction of an A.O. would not save the illegality of the
assessment in the assessee’s case.’
