9911796707
TMI Blog1996 (10) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... 148 and that, therefore, the assessment cannot be considered to have been completed on the returns filed by the assessee before the issue of notice under section 148. 3. Briefly stated, the facts are that the assessee is an individual. He derived income from house property and also 30% share income from the firm, M/s. Tollaram Hassomal Indore For the assessment years 1981-82, 1982-83, 1983-84 and 1984-85, the assessee had filed returns of income declaring income of Rs. 18,517, Rs. 22,180, Rs. 23,860 and Rs. 12,580 respectively. In January 1986, a search under section 132(1) was conducted at the residence and business premises of the assessee and his other relatives and business associates. On the basis of the material found in search, notice under section 148 was issued on 2-11-1988 for the assessment year 1984-85 and for other three assessment years on 21-3-1989. The notice under section 148 was served on the assessee on 18-11-1988 and for the other three years on 23-3-1989. In response thereto, the assessee filed returns for the assessment years 1981-82 and 1982-83 on 14-9-1990. For the subsequent two assessment years, no returns were filed but it was stated in letter filed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question. The Assessing Officer was bound to serve the assessment orders after completion of assessments ; whether the same resulted in no demand, refund or other liability. It was argued that as the assessment orders have not been served in pursuance of the returns filed by the assessee, the assessments are to be treated as pending and under these circumstances, no notice under section 148 could be issued. Reliance was placed on Satish Chandra Arya v. ITO [1984] 146 ITR 334/ [1983] 15 Taxman 86 (MP) and Smt. Jijeebai Shinde v. CGT [1986] 157 ITR 122 (MP). On consideration of the assessee's submission, the CIT(A) recorded the following findings in para 15 : " As per the facts available, it is clear that there is no evidence available to show that the assessment orders passed under section 143(1) for the assessment years 1981-82 to 1984-85 were served on the assessee. In spite of the fact that period of two months has been given to the Assessing Officer to rebut the contention of the assessee in this regard, it is noted that the Assessing Officer has not been able to rebut the same, as neither he attended at the time of hearing nor he has filed any written submissions even when t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned the circumstances, which go to establish that the assessments had, in fact, been made on the date(s) noted by him in the order. The Assessing Officer has pointed out the penalty proceedings under section 10 CDS and even imposition of penalty under the said section for assessment year 1982-83 against which appeal was preferred by the assessee. She vehemently argued that merely because the record of the Assessing Officer does not contain proof of service of the original assessment order(s) framed under section 143(1) for these years, the initiation of reassessment proceedings by following the procedure prescribed under law cannot be held to be vitiated. In support of her arguments, reference was made to the decision in the case of CIT v. Miss Swarn Taneja [1990] 186 ITR 348 (MP) (relevant observations at page 351). She, therefore, submitted that the order of the CIT(A) is not sustainable and deserves to be set aside. The ld. A.R., on the other hand, strongly supported the order of the CIT(A). According to him, the service of the assessment order in the manner prescribed under section 282 of the I.T. Act is essential. In this connection, he referred to Circular No. 10D of 104 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 148 of the Act for the above assessment years. According to the revenue, there are over whelming evidence on the records of the Assessing Officer which go to establish the factum of completion of assessment for all these assessment years under section 143(1) of the Act prior to issue of notice under section 148 of the Act. True, the onus of proving the service of assessment order(s) and the notice(s) of demand is on the revenue. It is, however, admitted by the revenue that there is no proof of service on the records. In the peculiar facts and circumstances of the case in hand, it is for consideration whether merely because proof of service of assessment order(s) under section 143(1) for all these assessment years are not on the records of the Assessing Officer, it necessarily follows that the said assessments had not been completed, notwithstanding the fact that there are overwhelming evidence to establish the factum of completion of assessment for these years prior to issue of notice(s) under section 148 of the Act for all these assessment years. 9. As stated earlier, it is not at all in dispute that the assessee had filed return(s) for the assessment years 1981-82 to 1984-85 un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order for the assessment year 1982-83 was made by an ITO other than the ITO who framed assessment for the assessment year 1981-82. At this stage, it may be stated that notice under section 148 was issued on 21-3-1989 by yet another incumbent who was ACIT and not ITO who had completed the assessment under section 143(1) on 23-3-1985 for the assessment year 1982-83. 11. The assessment for assessment year 1983-84 was also made under section 143(1) on 23-3-1985 accepting the income returned at Rs. 23,860. It was entered at Sl. No. 222/82 in D C.R. As per ITNS-150, the assessment had resulted in refund of Rs. 376. The assessment order and ITNS form appear at pp. 15-16 of the paper book. For the assessment year also, the notice under section 148 was issued on 21-3-1989, which was served on the assessee on 23-3-1989. 12. Assessment for the assessment year 1984-85 was made on 24-12-1985 under section 143(1) accepting the income returned at Rs. 12,580 by yet another incumbent ITO. The entry in D C.R. was made at Sl. No. 120/23. As per ITNS-150 form, the assessment had resulted in refund of Rs. 2,090 for which refund order was issued on 3-1-1986. Copy of assessment order dated 24-12-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lordships further observed that the fact that there was no assessment order as such is wholly immaterial. For the above observations, their Lordships derived support from the decision of the Supreme Court in Esthuri Aswathiah v. ITO [1961] 41 ITR 539. Their Lordships finally held that an order for making a refund on the basis of a return submitted by an assessee amounts to an order of assessment. As stated earlier in the case before us, the Assessing Officer had made an order for making a refund on the basis of return filed by the assessee for all the four assessment years involved. If the ratio of the decisions are applied to the facts of the case in hand, it has to be held that assessments for all these assessment years had been completed. The case of the revenue is on a better footing inasmuch as the assessments for all these assessment years had duly been completed under section 143(1) of the Act resulting in an order of refund in all these years. The facts narrated above go to establish that the assessments under section 143(1) had been completed for all these assessment years prior to the issue of notice(s) under section 148 of the Act. These facts are available on the record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immaterial [Emphasis supplied]. In yet another case of V.S.S. Sivalingam Chettiar v.CIT [1966] 62 ITR 678 (Mad.), the assessee had filed returns for the assessment years 1955-56 and 1956-57. On the returns filed by the assessee, the ITO had noted ' N.A.'. The orders were, however, not communicated to the assessee. The ITO sought to re-open the assessment of those years which was objected to by the assessee on the ground that the returns filed by the assessee had not been disposed of. When the matter came before their Lordships of the Madras High Court, they held that the failure of the officer to serve the orders of assessment had not the effect of rendering them invalid because they were neither preudicial to the assessee nor did they fasten any liability on them nor did they contain any finding which can be said to be prejudicial to him as an individual and a strict reading of the Act does not contemplate service of notice in such cases but only in cases where the orders passed are prejudicial to the assessee. As stated earlier, in the case in hand, the assessment orders framed under section 143(1) of the Act did not cause any prejudice to the assessee, as the income shown by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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