1979 (5) TMI 95 - AT - Income Tax

Summary

Issues:
Reopening of assessment and merits of the case in relation to the assessment year 1971-72.

Analysis:
1. The original assessment for the assessment year 1971-72 was completed on December 16, 1971, with a total income of Rs. 9,010. Subsequently, a notice under section 148 was issued on October 11, 1972, and the reassessment was completed on January 31, 1973. The appeal by the Revenue pertained to both the reopening of the assessment and the merits of the case. The Income Tax Officer (ITO) invoked section 69A to bring a sum of Rs. 1 lakh to tax, which was allegedly received from the assessee's father in Malaysia but lacked evidence of remittance.

2. The assessee appealed to the Appellate Assistant Commissioner (AAC) who found that all relevant facts were disclosed during the original assessment. The AAC also imposed a penalty of Rs. 5,000 for violating the Foreign Exchange Regulation Act. The AAC ruled in favor of the assessee, stating that there was no fresh information to justify the reopening of the assessment.

3. The Revenue appealed against the AAC's decision, arguing that the assessee failed to prove the origin of the funds and that reopening was justified as new information was not disclosed during the original assessment. The Revenue submitted miscellaneous records to support their claim that the reopening was valid due to undisclosed information.

4. The Tribunal examined the records and found that the AAC should have based the decision on the information available during the original assessment. The Departmental Representative was directed to produce all relevant records, including those of the AAC.

5. The Departmental Representative presented a confidential file but failed to produce the AAC's file. The Revenue argued for upholding the reopening under section 147(b) based on previous judgments. However, the Tribunal found that the information available to the ITO during the original assessment negated the need for reopening, as the Commissioner's decision did not provide new grounds for reassessment.

6. The Tribunal upheld the AAC's decision, emphasizing that the information available to the ITO during the original assessment negated the necessity for reopening. The Tribunal concluded that the reassessment was merely a change of opinion and dismissed the departmental appeal, stating that the assessment was not validly reopened, thereby rendering the discussion on the case's merits unnecessary.