9911796707
TMI Blog1983 (10) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... 1971-72. A. P. Menon, had two brothers, Kannakutty Menon and Echukutty Menon and three sisters Ambika R. Menon, Devaki Thampuran and Ammalukutty Amma. Kannakutty Menon is no more and he is now represented by his son, Krishnankutty Menon, the assessee in IT Appeal No. 588 and his widow, Kamalam K. Menon (the assessee in IT Appeal No. 589). Shri Echukutty Menon is the assessee in IT Appeal No. 38 and the sister Ambika R. Menon is the assessee in IT Appeal No. 39. Devaki Thampuran is represented by A. Achuthankutty Menon, who is the assessee in IT Appeal No. 37. Echukutty Menon first filed a return on 25-9-1971 with a covering letter, wherein it was stated that the legal heirs of Shri A. P. Menon are Kannakutty Menon, Echukutty Menon, Ambika R. Menon, Devaki Thampuran and the children of Smt. Ammalukutty Amma who had predeceased A. P. Menon. It was, therefore, stated in the letter that the land acquisition compensation amount was divisible into five shares between the brothers and sisters and that each of them was entitled to a one-fifth share. Returns were filed on this basis by Krishnankutty Menon and Kamalam K. Menon (the legal heirs of Shri Kannakutty Menon) on 10-1-1971, and by A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred only to the additional compensation factor. The notice was served on the three assessees on 11-4-1975. In pursuance of the same the three assessees filed returns. But no further action was taken in pursuance to the notice issued and the returns filed. The AAC has recorded a finding in his order that the notice under section 148, referred to above, was one under section 147(b). This finding was not questioned before us by the learned departmental representative, who argued the case on the basis that the notice was one under section 147(b). 6. Another factor to be noted in this connection is that even prior to the issue of the section 148 notice on 31-3-1975, the ITO had a discussion with the advocate for Echukutty Menon. This was on 24-2-1975. Even on that day the advocate had given a written submission to the ITO where he stated that under the Hindu Succession Act, A. P. Menon had only four legal heirs and that they would be entitled to a one-fourth share each. It was thereafter that the ITO recorded the reason for reopening as the additional compensation factor and issued the section 148 notice on 31-3-1975. 7. The ITO, subsequently issued another notice under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em of information before the ITO. Since the assessment under the first notice became barred by limitation and as no new material was available before the issue of the second notice, the reassessment proceedings initiated by the second notice are not valid. It may be noted that there has been issue of two notices only in the case of Achuthankutty Menon, Echukutty Menon and Ambika R. Menon [IT Appeal Nos. 37, 38 and 39]. The AAC, therefore, cancelled the reassessments in the case of these three persons. As stated earlier, with regard to Krishnankutty Menon and Kamalam K. Menon [IT Appeal Nos. 588 and 589], the only notice issued was what has been referred to above as the second notice. With regard to these assessees the AAC held that there is no bar to the reassessment proceedings on account of any earlier assessment proceedings having been initiated. With regard to these assessees, be also held that there has been furnishing of wrong information by them at the time of the original assessment with regard to the share and that the reopening of the assessment in their cases under section 147(a) on the basis of the information regarding the correct share is, therefore, valid. He, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct legal position regarding the shares of the various assessees, that this is a case of the ITO not caring to verify the correctness of the shares mentioned by the assessees, that even assuming that the assessees had made an erroneous or exaggerated claim, it will be no ground for reopening the assessment as it was the duty of the ITO to ascertain the correct claim and that the reassessments are, therefore, bad in law. 14. We have carefully considered the matter. The AAC has recorded a clear finding that the reopening of the assessment as per the first notice was under section 147(b). This was not disputed before us by the learned departmental representative. It would also appear that the department cannot claim that the first reopening was under section 147(a) because the second reopening was expressly stated to be under section 147(a) and a second reopening under the same clause after having not pursued the first reassessment proceedings will be bad in law. For this reason also the department cannot but claim that the first reopening is under section 147(b). If so, the further contention of the learned departmental representative that the reassessment made will be within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alive would fall under Class II of the Schedule to the Hindu Succession Act and they will, therefore, take a one-fourth share each. The children of a predeceased sister would fall only under the subsequent class. Even assuming that the assessees were aware of the correct legal position, it would be a case of the assessees making an excessive or exaggerated claim, the correctness of which the ITO should have verified. We are, therefore, of the view that the assessees had placed before the ITO all material particulars even at the time of the original assessment and that the assessment cannot be reopened on the ground that the assessees had not disclosed fully and truly all the material facts necessary for making the assessment. The reopening of the assessment under section 147(a) cannot. therefore, be sustained. 16. It was then contended by the learned departmental representative that the reopening can be sustained on the ground that at the time of the original assessment the assessees had not disclosed fully and truly all the material facts with regard to the additional compensation factor. It is true that at that time the assessees had not mentioned anything about the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the learned departmental representative on the ground that in those cases the original assessments had not been completed. In our opinion the ratio of the decisions will clearly apply even when the matter has been reopened and a return had been filed. In this view of the matter also the reassessment on the basis of the additional compensation factor cannot be sustained. 17. What we have stated above will be fully applicable only with regard to appeal Nos. 37, 38 and 39 wherein only two notices were issued. In the case of IT Appeal Nos. 588 and 589 only one notice, which has been dealt with earlier in this order as the second notice has been issued. But with regard to the same we have already held that the reopening under, this notice is only with regard to the share factor and that with regard to the same, it cannot be said that the assessees had failed to disclose fully and truly all material factors at the time of the original assessment. The reassessments in these cases also cannot, therefore, be sustained. 18. In the result, appeal Nos. 588 and 589 (Coch.) of 1981 by the assessees are allowed and appeal Nos. 37, 38 and 39 (Coch.) of 1981 by the department are dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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