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2007] 291 ITR 500 [2007] 161 TAXMAN 316 (SC) SUPREME COURT OF INDIA Assistant Commissioner of Income-tax v Rajesh Jhaveri Stock Brokers (P.) Ltd. ARIJIT PASAYAT AND D. K. JAIN, JJ. CIVIL APPEAL NO. 2830 OF 2007 MAY 23, 2007 Section 143 of the Income-tax Act, 1961 (Position prior to 1-6-1999) - Assessment - Whether intimation under section 143(1)(a) cannot be treated to be an order of assessment - Held, yes Section 147, read with section 143, of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts - Assessee filed loss return which was processed under section 143(1) - Subsequently, on basis of audit objection relating to debit of certain amount as bad debt, Assessing Officer re-opened assessment by issuing notice in terms of section 148 - On writ petition filed by assessee against aforesaid notice, High Court, following decision of Gujarat High Court in Adani Exports v. Dy. CIT (Assessment) [1999]240 ITR 224 allowed writ petition - Whether since Adani Exports' case (supra) was related to section 143(3), while instant case was related to section 143(1) and there is conceptual difference between section 143(1) and section 143(3), High Court wrongly applied Adani Exports' case (supra) - Held, yes Words and phrases : 'Reason to believe' as occurring in section 147 of the Income-tax Act, 1961 FACTS The assessee-company filed its return of income for the assessment year 2001-02 declaring loss. The return was processed under section 143(1) by accepting the loss returned by the assessee. The revenue audit raised an objection relating to debit of certain amount as bad debt. Since the conditions stipulated under section 36(1)(vii), read with section 36(2), were not fulfilled, the Assessing Officer reopened the assessment by issuing a notice in terms of section 148 on the ground that he had reason to believe that the income assessable to tax had escaped assessment within the meaning of section 147 by accepting the return under section 143(1). Thereafter, a return of income declaring the loss at the same figure, as declared in the original return, was filed by the assessee under protest. Copy of the reasons recorded was furnished by the…

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