1991 (8) TMI 160 - AT - Income Tax

Appellate Assistant Commissioner, Assessment Notice, Business Premises, Promissory Estoppel, Reassessment Notice

Issues Involved:
1. Reopening of Assessments under Section 147(a)
2. Validity of Reassessments for the Assessment Years 1966-67 to 1970-71
3. Alleged Assurance by the Commissioner Regarding Non-Prosecution
4. Application of the Principle of Promissory Estoppel
5. Competency of Appeals Against Admitted Assessments

Detailed Analysis:

1. Reopening of Assessments under Section 147(a)
The assessee argued that the reopening of assessments under Section 147(a) was not justified as there was no new material that came to light after the original assessments. The reassessments were based on the difference in the capital accounts of the partners, which was disclosed in the books seized during the search on 23-1-1971. The Tribunal found that the seized books and slips disclosed suspense sales omitted from the regular books for the assessment years 1968-69, 1969-70, and 1970-71. The statements of the partner and the Munim confirmed the suppression of sales. The Tribunal held that these materials justified the reopening of assessments for those years.

2. Validity of Reassessments for the Assessment Years 1966-67 to 1970-71
The Tribunal noted that the reassessments were made based on the returns filed by the assessee in pursuance of the settlement terms agreed upon with the department. The reassessments were made on the amounts disclosed by the assessee itself, and the Tribunal held that the reassessments were valid and binding against the assessee.

3. Alleged Assurance by the Commissioner Regarding Non-Prosecution
The assessee claimed that the Commissioner had assured them that no prosecution would be launched under Section 277 of the Income-tax Act. The Tribunal found no evidence to support this claim. The minutes of the settlement dated 29-9-1972 and the terms of the settlement dated 20-3-1973 did not mention any such assurance. The Tribunal concluded that the alleged assurance was not proved.

4. Application of the Principle of Promissory Estoppel
The assessee argued that the principle of promissory estoppel should apply, preventing the department from prosecuting the partners under Section 277 of the Income-tax Act. The Tribunal referred to the Supreme Court's decision in Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh, which held that promissory estoppel cannot be invoked against the exercise of legislative power or to compel the Government to do an act prohibited by law. The Tribunal found that no clear and categorical assurance was given by the department, and hence, the principle of promissory estoppel did not apply.

5. Competency of Appeals Against Admitted Assessments
The Tribunal held that since the reassessments were made based on the returns filed by the assessee voluntarily and in pursuance of the settlement, the assessee could not be said to be aggrieved by these reassessments. The Tribunal cited the decisions in Ramanlal Kamdar v. CIT and CIT v. Cochin Malabar Estates & Industries Ltd., which held that no appeal lies against admitted assessments. Consequently, the appeals filed by the assessee were incompetent.

Conclusion:
The Tribunal upheld the reassessments for the assessment years 1966-67 to 1970-71 and dismissed the appeals filed by the assessee. The Tribunal found that the reopening of assessments under Section 147(a) was justified, the reassessments were valid and binding, no assurance regarding non-prosecution was proved, the principle of promissory estoppel did not apply, and the appeals against admitted assessments were incompetent.

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