148 NOTICE followed by 142(1) notice

Since the assessee is your client, you knew the nature of the receipt that is exempt income but department will have the information of receipt of amount only.... only after the completion of inquiry, it could be ascertained whether it is taxable income or exempt income.

Thank you for the reply. My query is if the investigation shows that the 148 notice is for an exempt income, will the follow up queries in 142(1) be valid?

No inquiries would've done on 148 notice. issue 148 notice is condition precedent to initiate assessment proceedings of an early assessment year. details will be called for examination by issue of 142(1) notice only

I mean after the 148 notice, a 147 notice was sent  which explained fully the nature of income.

We find out that the Dept did not do duo diligence and check DTAA and the fact the "income which has escaped assessment is NOT taxable in India" per DTAA.

Pl let me know if the 147/148 notices are proved invalid or on incomes not taxablle in India, will the entire follow up queries under 142(1) be cancelled? Case of Jet airways vs CIT, mumbai where judge threw out the additional queries when the original 148/147 "income" was not assessed.

The amendment to 147 explanaton 3 says that if the "escaped income "mentioned in the original notice is not assessed or when it is found out that it is not taxable, judge threw out follow up queries and saidd a Fresh 148 has too be given to look into other issues ..Just want you valuable opinion .

 

There's no 147 notice. only 148 notice will be issued sir. I didn't go through the judgement cited by you. in my opinion, the 142(1) issued is valid. actually as I didn't know the facts of the case, I couldn't give you the valid opinion sir

 

Sir,

Supply of reason for re-opening u/s 147  is what the letter says about the income after sendiing the 148 Notice and asking for the filed return..

Now coming to the query, after this was issued, another 142(1) query also was issued as follow up to the ongoing 147 letter for the same AY.

Question which needs to be answered is " IF THE 147 LETTER SAYS SOME INCOME HAS ESCAPED ASSESSMENT "  and if the assessee shows it is not an income that is taxable in India, will the follow up queries be annulled ?  See the judgement of the land mark cases of Jet airways vs CIT mumbai and Ranbaxy vs CIT etc

If the income which AO says "has escaped assessment" is not at all a taxable income in India then court cases say a fresh 148 notice has to be issued if AO wants to look into other issues in the return. The ongoing proceedings have be stopped, which means the 142(1) notice issued also will have to be withdrawn..

I hope Sir now you are clear about the query.

Yeah I got it sir, the judgements cited by you speaks about the additions made on other issues apart from the one which was the reasonable cause for reassessment of income for a particular assessments year.

now coming to your query, If the assessee proves that the income was exempt income then reassessment proceedings have to be completed by passing assessment order under section 143(3) r. w. s. 147.

nine six double zero eight seven eight seven one six, sir if you wish, you can call me in this number after 11.30.. so that we both can come to a conclusion

proceedings limitation date is appproaching. Will see how they reply and we will then contact you.

Based on the two court cases, it appears AO has to stop theproceedings on other issues if the main 147 notice of income escaping assessment is not assessed or proven tax exempt and issue fresh 148 notices if he wants to continue on any other issue. PL confirm if you agree.

 

Will discuss after we hear something from the AO.

Thanks Sir for your time.