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23.01.2023

[Physical Hearing/Hybrid Hearing (as per request)]

CM APPL. 3104/2023 in W.P.(C) 8587/2022

CM APPL. 3106/2023 in W.P.(C) 12471/2022

CM APPL.3105/2023 in W.P.(C) 12635/2022[Applications filed on behalf

of the petitioner seeking interim relief]

1.

Issue notice.

1.1

Mr

Shailendra

Singh

accepts

notice

on

behalf

of

the

respondent/revenue.

2.

In view of the directions that we intend to pass, Mr Singh says that a

reply need not be filed.

3.

The above-captioned applications concern Assessment Year (AY)

2015-16 (CM APPL. 3104/2023), AY 2016-17 (CM APPL. 3106/2023) and

AY 2014-15 (CM APPL. 3105/2023).

4.

The immediate grievance of the applicant/petitioner is that although

the coordinate bench had directed that the pending rectification application

under Section 154 of the Income Tax Act, 1961 [in short, „the Act‟] should

be disposed of within the timeframe accorded, it appears that steps in that

behalf have not been taken.

Page 2 of 6

5.

Furthermore, Mr Deepak Chopra, who appears on behalf of the

applicant/petitioner, says that the trigger for the assessment/reassessment

proceedings, concededly, is the report of the Comptroller and Auditor

General of India [in short, “CAG”] dated 29.12.2020.

6.

Mr Chopra has taken us through the relevant document which is

appended as Annexure C appended to CM APPL. 3105/2023, and sought to

demonstrate that, even according to the respondent/revenue, the report on

which reliance is placed is the “draft audit report.”

7.

Mr Chopra, in support of his plea that assessment/reassessment

proceedings cannot go on till such time the rectification application is

disposed of, relies upon the judgment of the Supreme Court rendered in

S.M. Overseas Pvt. Ltd. v. Commissioner of Income Tax, (2022) SCC

OnLine SC 1809.

8.

We may point out that there is no dispute above the fact that, at the

relevant time, Section 148 [in particular, Explanation 1 Clause (ii)] reads as

follows:

“Issue of notice where income has escaped assessment.

148.

Before making the assessment, reassessment or recomputation

under section 147, and subject to the provisions of Section 148A, the

Assessing Officer shall serve on the assessee a notice, along with a copy of

the order passed, if required, under clause (d) of Section 148A, requiring

him to furnish within such period, as may be specified in the notice, a return

of his income or the income of any other person in respect of which he is

assessable under this Act during the previous year corresponding to the

relevant assessment year, in the prescribed form and verified in the

prescribed manner and setting forth such other particulars as may be

prescribed; and the provisions of this Act shall, so far as may be, apply

accordingly as if such return were a return required to be furnished under

section 139;

Page 3 of 6

Provided that no notice under this Section shall be issued unless there is

information with the Assessing Officer which suggests that the income

chargeable to tax has escaped assessment in the case of the assessee for the

relevant assessment year and the Assessing Officer has obtained prior

approval of the specified authority to issue such notice;

xxx

xxx

xxx

Explanation 1.—For the purposes of this section and section 148A, the

information with the Assessing Officer which suggests that the income

chargeable to tax has escaped assessment means:

xxx

xxx

xxx

“(ii) any final objection raised by the Comptroller and Auditor General of

India to the effect that the assessment in the case of the assessee for the

relevant assessment year has not been made in accordance with the

provision of this Act”

[Emphasis is ours]

8.

A perusal of the aforesaid provision shows that only final objection

raised by the CAG would be treated as information suggestive of the fact

that income chargeable to tax had escaped assessment, for the purposes of

Section 148 and 148A of the Act.

9.

In this case, what is available on record prima facie, shows that