×Latest Case Laws on Income Tax by various High Courts of India
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06-12-2018, BRAHM DATT, Section 148, 132, 153A, 149, 147, HIGH COURT OF DELHI
1. The Petitioner, is aggrieved by a notice dated 24.03.2015 issued under section 148 of the Income Tax Act 1961 (hereafter “the Act”) proposing to initiate reassessment proceedings for assessment year 1998-99. It is contended that the issue has been time barred and the respondents (hereafter “the Revenue”) have no jurisdiction in the matter.
2. The petitioner is a senior citizen aged about 84 years. From Assessment Year (hereafter “AY”) 1984-85 to AY 2003-04, he was a nonresident/not ordinarily resident of India. He was previously working and residing in foreign countries, viz; Jordan and Iraq and while so, he derived income primarily from salary and professional receipts. For AY 1984-85 to 2003-04, the Petitioner filed income tax return(s) in India in the status of non-resident/not ordinarily resident, disclosing income liable to tax in India. His residential status was, undisputedly that of a „non-resident‟ in some years and a „not ordinarily resident‟ in remaining years. As a consequence, he was liable to tax in India on his Indian sources income, viz.(a) income accruing or arising or deemed to accrue or arise in India, and (b) income received or deemed to be received in India. From the year 2003 onwards, the Petitioner regularly filed his return of income as person resident in India vide Permanent Account Number ADNPD-9666-R.
3. Search and seizure operation under Section 132 was carried out in the case of the Petitioner. During the course of search, his statement was recorded on 27.09.2011 under Section 132(4) of the Act. In the statement, the Petitioner was, inter-alia, asked to clarify if he maintained foreign bank account(s). In response to the said query, he stated that though he did not maintain any foreign bank account in his individual capacity, he, however did settle an offshore trust when he was „non-resident‟. It is submitted that in the said statement recorded during the course of search as well as during the course of proceedings under section 153A read with Section 143(3)of the Act, the Petitioner repeatedly clarified that he did not maintain any account with foreign bank in his personal capacity, but had contributed an amount of approximately US$ 2-3 million at the time of settling of the Second Techna Trust, when he was a non-resident, out of his income earned from sources outside India.
4. The petitioner complains that despite such explanation, the revenue primarily relying upon his statement, issued the impugned notice dated 24.03.2015 under section 148 seeking to initiate reassessment proceedings for AY 1998-99, the year under consideration, on the suspicion that the income of the Petitioner had escaped assessment. It is, at the outset, submitted that reopening of concluded assessment for AY 1998-99 by notice dated 24.03.2015 is barred by limitation prescribed under Section 149 of the Act. In this regard, Mr. Ajay Vohra, learned senior counsel urges that Section 147 of the Act empowers the AO to initiate reassessment proceedings, if he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. Such power is, however, subject to the provision of sections 148 to 153 of the Act. Section 149 prescribes the limitation within which reassessment proceedings can be initiated under the Act. The petitioner submits that the said provision was substituted by Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989; it read thereafter as follows:
“149. (1) No notice under section 148 shall be issued for the relevant assessment year
(a) in a case where an assessment under sub-section (3) of section 143 or section 147 has been made for such assessment year,—
(i) if four years have elapsed from the end of the relevant assessment year, unless the case falls under sub-clause (ii)or sub-clause (iii) ;
(ii) if four years, but not more than seven years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees fifty thousand or more for that year;
(iii) if seven years, but not more than ten years, have elapsed from the end of the relevant assessment year, unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to more than rupees one lakh or more for that year;
(b) in any other case,—
(i) if four years have elapsed from the end of the relevant assessment year, unless the case falls under sub-clause (ii)or sub-clause (iii);
(ii) if four years, but not more than seven years, have elapsed from the end of the relevant assessment year, unless the income