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TMI Blog1990 (7) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 had been issued by the Assessing Officer, as in his opinion, the income in respect of deposits amounting to Rs. 3 1,000 in the name of assessee's son in Punjab National Bank, Karol Bagh, New Delhi had escaped assessment. In response to the notice u/s 148, the assessee filed the return on24th April, 1978declaring the same income as originally disclosed. During the course of reassessment proceedings the assessee filed evidence regarding the source of deposits amounting to Rs. 31,000 in the name of asssessee 's son. On being satisfied with the explanation and evidence placed by the assessee before the Assessing Officer, the proceedings initiated u/s 148 were filed. The assessing officer stated in the order that the assessment originally made on20th March, 1976on an income of Rs. 84,263 shall stand. Since a brief order has been passed by the Assessing Officer, we would like to reproduce the same for ready reference : " The assessment in this case was completed on20-3-1976on a tow income of Rs. 84,263 u/s 143(3) of the Income-tax Act, 1961. This assessment was also upheld by the ITAT. This assessment was, however, reopened by issuance of notice u/s 148 on18-3-78. This notice was iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same and in adjudicating upon the additions made by the Assessing Officer in the original assessment. The learned counsel vehemently contended that once the assessment is re-opened the original assessment is set aside and it is open to the assessee to agitate the additions in an appeal when the reassessment is completed by the Assessing Officer. In this connection, the learned counsel relied upon the decision of the Hon'ble Supreme Court in the case of Kundan Lal Srikishan v. CST [1987] 32 Taxman (Tax - Mag.) 280 and the decision of the Rajasthan High Court in the case of Kishan Gopal Prabhu Dayal v. Addl. CIT [1987] 35 Taxman 271. The learned counsel also relied upon the following decisions : 1. S.S. Kanwar (HUF) v. ITO [1983] 4 ITD 120 (Delhi). 2. Smt. Gulabbai M. Khinvasara v. ITO [1983] 17 TTJ 64 (Pune) 3. Liyaquat A. Rangoonwala v. ITO [IT Appeal No. 227 Bom. of 1984.] 4. CIT v. Rangnath Bangur [1984] 149 ITR 487 (Raj.) 5. Sun Engg. Works (P.) Ltd. v. CIT [1978] 111 ITR 166 (Cal.). 8. In reply the learned Departmental Representative Smt. Neena Kumar contended that it is not open to the Assessing Officer to review the final decisions of the superior authorities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to review the orders of superior authorities. In our view, the contention of the learned counsel for the assessee that once the assessment is reopened the original assessment is set aside and it is open for the assessee to even agitate against the additions which had been confirmed by the appellate authority is not well founded. The contention that the order of the ITAT on 15th April was a nullity as the proceedings had been reopened for re-assessment on18th March, 1978is also not well founded. Under section 147, the assessing officer is empowered to re-open an assessment for definite purpose of assessment or re-assessment of income having escaped assessment. The purpose of re-opening of an assessment is not to review the order passed earlier by the Assessing Officer. Section 147 also does not empower the assessing officer to sit in judgment against the orders passed by his superior authorities such as the Commissioner of Income-tax (Appeals) or the Income-tax Appellate Tribunal. Similarly the CIT(A) is also not empowered to sit in judgment against the order of the ITAT. If the contention of the learned counsel for the assessee were to be accepted then the assessing officers would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be read as a whole and not in piecemeals. The reference to setting aside and starting of fresh proceedings is for a definite purpose of bringing to tax the escaped income and not for purposes of reviewing the earlier decisions of the superior authorities. 14. In the case of Sharda Trading Co. v. CIT [1984] 149 ITR 19/17 Taxman 49 the Jurisdictional High Court of Delhi had to consider the issue as to whether by reopening of an assessment the original order is set aside and whether the Commissioner had the jurisdiction in such circumstances to invoke his powers u/s 263. In this case it was held that merely by reopening an assessment or by issue of notice the entire assessment is not set aside. Once an assessment is validly reopened and the ITO proceeds to make re-assessment the initial order of assessment stands automatically cancelled. The order of re-assessment would take place of original order of assessment and till that is done the original order of assessment would still be operative. Referring to the decision of the Supreme Court in Jaganmohan Rao's case Lordships of the Delhi High Court held that the decision lays down that once an assessment is re-opened, the ITO will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... look at Section 152 of the Income-tax Act, 1961, which is reproduced hereunder : " 152(1) : In an assessment, re-assessment or recomputation made u/s 147, the tax shall be chargeable at the rate or rates at which it would have been charged had the income not escaped assessment. (2) Where an assessment is re-opened u/s 147, the assessee may, if he has not impugned any part of the original assessment order for that year either u/s 246 to 248 or u/s 264, claim that the proceedings u/s 147 shall be dropped on his showing that he had been assessed on an amount or to a sum not lower than what he would be rightly liable for even if the income alleged to have escaped assessment had been taken into account, or the assessment or computation had been properly made. Provided that in so doing he shall not be entitled to reopen matters concluded by an order u/ss 154, 155, 260, 262 or 263." 18. If contention of the assessee's counsel were to be accepted as correct, Section 152 could not have found a place in the statute book as it would in such circumstances be redundant. Section 152 gives an option to the assessee to contest the claim in re-assessment proceedings which had not been impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee to claim the deduction during re-assessment proceedings u/s 34 of the Income-tax Act, 1922. This decision is also not applicable to the facts of this case. 20. The decision of the Income-tax Appellate Tribunal referred to by the learned counsel for the assessee in cases of Smt. Gulabbai M. Khinvasara and Liyaquat A. Rangoonwala were also in different contents. The decision of the Pune Bench of the Tribunal in the case of Smt. Gulabbai M. Khinvasara was with regard to the powers of Commissioner u/s 264 whereas the decision of Bombay Bench of the Tribunal in the case of Liyaquat A. Rangoonwala was with regard to the power of the Assessing Officer in the matter of assessments reopened u/s 146. Thus the decisions referred to by the learned counsel for the assessee are apparently inapplicable to the facts of this case. The decision of the Hon'able Supreme Court in the case of Kundan Lal Srikishan is with regard to the provisions of U.P. Sales Act, 1948. In this case the issue before the Supreme Court was, that in a case where after original assessment, proceedings u/s 21 of the U.P. Sales Act, 1948 are taken against the assessee and an order u/s 21 passed, period of limit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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