U.S. ASSOCIATES vs. PRINCIPAL COMMISSIONER OF INCOME TAX

-1- NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR Writ Petition (T) No.254 of 2022

-2- and would therefore be outside the purview of the assessment proceedings as per circular dated 11.05.2022. 4. The contention of the petitioner is that the authorities concerned have taken into consideration the transaction of an amount of Rs.14 Lakhs made by one Smt. Rekha Soni while carrying out the assessment, but the said 14 Lakhs transaction was not the contents of the notice that was issued. Therefore, the petitioner never had an opportunity to submit his explanation at the first instance. That, it is only during the assessment proceeding that the officers of the Department had taken this aspect and have also added the said amount while passing the order under Section 148A(b)(d). This, according to the petitioner is not otherwise permissible as the authorities could have proceeded to assess in respect of a transaction which did not form part of the notices that were issued initially under Section 148 of the old Act on 29.06.2021 nor did it form part of the notice that was subsequently issued under Section 148A(b) of the new Act that was issued on 25.05.2022. 5. It is the further contention of the petitioner that if the said 14 Lakhs rupees is excluded from the proceedings then the income that has escaped assessment would be of an amount of Rs.36,99,555 which is less than 50 Lakhs rupees and in terms of the circular dated 11.05.2022 wherein it has been specifically held that notice under Section 148 could be issued only if the case is one where the amount escaping the assessment of an asseessee in that year is likely to be more than 50 Lakhs rupees. In the instant case the amount minus (-) 14 Lakhs added by the Department which did not form part of the notice would bring the total amount to less than 50 Lakh rupees. Thus, prima facie the proceedings would have been attracted by the circular dated 11.05.2022 and it could not had been initiated itself.

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“18. It is also well settled that the reasons for reopening are -4- reasons. In the present case, the reasons which are given by the IAC for reopening the assessments which are annexed to the affidavit in rejoinder of the appellants are to the effect that in respect of the Assessment Year 1967-68 to 1973-74 there are errors in the principle of allocating headquarters expenses to India which have been deducted. The net effect is that there has been an excess charge of headquarters expenses allocated to India. Each of the notices sets out the relevant error for the accounting year. The reasons, therefore, do not indicate in any manner any deliberate omission or suppression of any fact or of this error, on the part of the assessee at the time of the original assessment. Nor do these reasons allege that the assessee was in possession of the facts which it has failed to prove. In these circumstances, the provision of s. 147(a) are not attracted.

“8. It is settled by the Supreme Court in Commissioner of Customs, Mumbai Vs.Toyo Engineering India Ltd. 1 at para 16 that the department/ Revenue cannot travel beyond the show- cause notice. Thus, the argument advanced by the learned counsel appearing for the State that as a matter of fact what is sought to be revised was the reassessment order and not the original assessment order need not be considered, as the same is not permissible in view of what has been held by the Supreme Court.”