Page 19 - DTPA Journal Aug 18

DTPA - J | 2017-18 | Volume 3 | August 2018

500 (Delhi)] approved by SC) Notice to dead person Notice based solely on such instruction not valid.
invalid;
b. Whether notice issued within time limit (refer Nokia
India Pvt Ltd vs. DCIT [W.P.(C) No. 1773/2016
(Del.)] and ST MicroElectronics Pvt Ltd vs. DCIT 12. Key aspects to object:
[W.P.(C) No. 3648/2014 (Del.)] and UPSRTC vs. i) Reasons do not sprout and give rise to any income
Kusum Gupta [First Appeal from Order No. 1272 escaping assessment per se and reasons cannot
of 1992 (All.)]); stand on its own legs, Return filing aspect missed;
c. Whether notice issued by jurisdictional and proper (CIT vs. RNG Polyvinyl (I) Ltd. [(2017) 396 ITR
officer having jurisdiction over the case (vs PAN 5(Del)] )
Database) (refer SC in Raza Textiles case); ii) Reasons based on borrowed satisfaction and
d. Whether notice can be vague or it should be suffers from lack of application of mind (PCIT vs.
specific (refer Manish Maheshwari vs. ACIt [(2007) Meekashi Overseas Pvt Ltd [(2017) 395 ITR 677
289 ITR 341 (SC)] and New Delhi Auto Finance Pvt (Del)])
Ltd vs. JCIT [(2008) 300 ITR 83 (Del.)]); iii)Highlight weakness in information referred in
e. Right to receive reasons with sanction (read them reasons that same is scanty, vague ; not actionable
properly & before filing objections must seek all and is inchoate and said information is not
information referred in reasons by separate incriminatory in nature;
letter) GKN Driveshaft (India) Ltd. vs. ITO [(2003) iv)If reasons want to make protective assessment
259 ITR 19(SC)]; challenge it by saying no protective assessment
f. When aforesaid exercise is completed then draft permissible u/s 147;
comprehensive objections (like proviso disclosure v) Condition of section 149 when reopening made
aspect, application of mind aspect and live nexus after four years fulfilled check;
aspect; sanction aspect etc.);
13. Change of opinion
g. Objections must be disposed by separate
speaking order with application of mind (at this stage Both under the law as it stood prior to assessment year
assessee can go for writ). 1989-90 and law as it stands from assessment year
1989-90 it can be said that a mere change of opinion
11. Reason to believe of the AO cannot be a reason for reopening an assessment. In
The Apex Court in the case of Calcutta Discount Co. ITO & Anr. vs. Sirpur Paper Mills Ltd [1978] 113 ITR
Ltd. vs. ITO [(1961) 41 ITR 191 (SC)] analysed the 393 (AP) has held that the department cannot be
Phrase "reason to believe" and observed that "It is for permitted to bring fresh litigation because of new views
him to decide what inferences of facts can be they entertain on same facts or new vision that they
reasonably drawn and what legal inferences have present as to what should be the proper inference on
ultimately to be drawn.” the facts disclosed. If this is permitted they held that
litigation could have no end except when legal ingenuity
It is not for somebody else to tell the assessing authority is exhausted and would multiply litigation. In this
what inferences, whether of facts or law, should be context, it has been held that reassessment is not valid
drawn.
in the following circumstances:
In the case of CIT vs. Greenworld Corporation ? Having second thoughts on the same material and
[(2009) 314 ITR 81 (SC)] it was held that the the omission to draw the correct presumption during
assessment order passed on the dictates of the higher original assessment.
authority being wholly without jurisdiction, was a nullity.
? Ignorance of the legal position on the part of the
Reopening of assessment on basis of letter of Assessing Officer even though relevant facts and
Commissioner (Appeals) containing identical facts materials were available.
stated by assessee was held not valid. [United
Shippers Ltd. vs. ACIT (2015) 371 ITR 441 (Bom.)] ? Ignorance of board circulars.
In the case of Sun Pharmaceutical Industries Ltd. vs. ? Where primary facts were available at the time of
DCIT [(2016) 381 ITR 387 (Delhi)] - The notice under original assessment, omission to notice the same.
section 148 was issued as a result of Instruction No. 9 of ? Facts available before predecessor and taken note of
2006 dated November 7, 2006 issued by the Central an original assessment and successor holding a
Board of Direct Taxes. These audit objections were not different view.
accepted by the Assessing Officer. CBDT instruction
directing remedial action in case of audit objections – ? Reopening on the basis of Supreme Court decision.

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