2012 (9) TMI 1252 - HC - Income Tax

Summary

Issues Involved:
1. Validity of the notice issued under Section 148 of the Income Tax Act, 1961.
2. Jurisdiction of the Assessing Officer to reopen assessment under Section 147 of the Act.
3. Legality of reopening an assessment on issues already decided by the Commissioner (Appeals) and Tribunal.
4. Applicability of block assessment under Chapter XIV-B versus regular assessment.

Issue-Wise Detailed Analysis:

1. Validity of the Notice Issued Under Section 148 of the Income Tax Act, 1961:
The petitioner challenged the notice dated 4th February 2002, issued by the respondent under Section 148 of the Income Tax Act, 1961, seeking to reopen the assessment for the assessment year 1999-2000. The petitioner argued that the issues raised in the notice had already been decided in their favor by the Commissioner (Appeals) and confirmed by the Tribunal. The court noted that reopening the assessment on the same issues is unjustified and without authority of law, as these issues had already been scrutinized and decided by the appellate authorities.

2. Jurisdiction of the Assessing Officer to Reopen Assessment Under Section 147 of the Act:
The court examined whether the Assessing Officer had the jurisdiction to reopen the assessment under Section 147 of the Act. It was found that the reasons recorded for reopening the assessment were essentially a reiteration of the assessment order under Section 158BC. The court observed that the Assessing Officer was well aware that the Commissioner (Appeals) had deleted the addition of Rs. 55,00,866/- on merits. Hence, reopening the assessment on the same grounds was without jurisdiction.

3. Legality of Reopening an Assessment on Issues Already Decided by the Commissioner (Appeals) and Tribunal:
The court noted that the issue of gold ornaments valued at Rs. 55,00,866/- had already been examined and decided by the Commissioner (Appeals) and the Tribunal. The Commissioner (Appeals) had found that the petitioner had discharged the onus of proving the genuineness of the transactions and had deleted the addition. This decision was upheld by the Tribunal. The court held that reopening the assessment on the same grounds would amount to the Assessing Officer sitting in appeal over the order of the Commissioner (Appeals), which is not permissible.

4. Applicability of Block Assessment Under Chapter XIV-B Versus Regular Assessment:
The court referred to the leading decisions in N.R. Paper & Board Ltd. v. Dy. CIT and Cargo Clearing Agency (Gujarat) v. Jt. CIT, which clarified that the assessment of undisclosed income under Chapter XIV-B is distinct from regular assessments under Chapter XIV. The court emphasized that once an assessment has been framed under Chapter XIV-B for undisclosed income, there is no question of reopening such assessment under Section 148 of the Act. The court concluded that the reopening of the assessment in relation to an issue that was already subject matter of block assessment is without jurisdiction.

Conclusion:
The court quashed and set aside the impugned notice dated 4th February 2002, issued under Section 148 of the Act, declaring it unsustainable and without jurisdiction. The petition was allowed, and the rule was made absolute with no order as to costs.