1990 (7) TMI 165 - AT - Income Tax

Summary

Issues Involved:
1. Reopening of assessment under Section 147.
2. Jurisdiction of the CIT(A) to review issues already decided by the ITAT.
3. Levy of interest under Sections 139(8) and 217 in reassessment proceedings.

Issue-Wise Detailed Analysis:

1. Reopening of Assessment under Section 147:
The original assessment was completed under Section 143(3) on March 20, 1976, with an income of Rs. 84,263. This assessment was upheld by the ITAT on April 15, 1981. On March 18, 1978, the Assessing Officer issued a notice under Section 148, suspecting that income related to deposits amounting to Rs. 31,000 in the name of the assessee's son had escaped assessment. The assessee filed a return on April 24, 1978, declaring the same income as initially disclosed. The Assessing Officer, satisfied with the evidence provided, did not make any further additions, and the original assessment stood.

2. Jurisdiction of the CIT(A) to Review Issues Already Decided by the ITAT:
The CIT(A) directed the Assessing Officer to reconsider the explanation regarding Rs. 48,691 out of Rs. 73,425, which was income from undisclosed sources. The Revenue contended that the CIT(A) exceeded his jurisdiction as the addition of Rs. 73,425 had already been confirmed by the ITAT. The Tribunal held that once the ITAT has made a final decision, it is binding on the lower authorities, including the CIT(A). The Tribunal cited the Supreme Court's decision in Rao Thakur Narayan Singh, stating that reopening an assessment under Section 147 does not empower the Assessing Officer or CIT(A) to review or reconsider the decisions of superior authorities. Thus, the CIT(A) exceeded his jurisdiction by revisiting the addition of Rs. 73,425, which had already been confirmed by the ITAT.

3. Levy of Interest under Sections 139(8) and 217 in Reassessment Proceedings:
The assessee challenged the levy of interest under Sections 139(8) and 217 in the reassessment proceedings. The Tribunal referred to its decision in ITO v. Kishanlal Gadodia, where it was held that such interest could not be charged in reassessment proceedings. Since the reassessment is not considered a regular assessment, interest under these sections is not chargeable. However, any interest charged in the original assessment would stand.

Conclusion:
The Tribunal concluded that the CIT(A) had exceeded his jurisdiction by reconsidering the addition of Rs. 73,425, which had been confirmed by the ITAT. The order of the CIT(A) was set aside, and the original order of the Assessing Officer was restored. The appeal of the Revenue was allowed. In the cross-objection, the levy of interest under Sections 139(8) and 217 in the reassessment proceedings was deleted, but any interest charged in the original assessment would remain. The cross-objection was partly allowed.