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TMI Blog2005 (12) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... s it has been passed on the same facts as were considered by the AO by imposing his opinion over that of the AO. 2. Because the impugned order under s. 263 passed by the CIT is without jurisdiction inasmuch as the assessment framed was the subject-matter of appeal before the CIT(A) and there is no fresh matter other than the matter which was the subject-matter of appeal filed before CIT(A). 3. Because the impugned order is bad in law and without jurisdiction inasmuch as the very initiation of proceedings which resulted in the assessment order which was the subject-matter of the impugned order under s. 263 was without jurisdiction and bad in law. 4. Because the initiation of proceedings by issue of notice under s. 148 having been issued by the ITO who has no jurisdiction the entire proceedings made in pursuance thereof including the impugned order under s. 263 is bad in law and liable to be quashed. 5. Because in absence of any material to justify the inference that the appellant acquired any diamond or gold jewellery in the previous year relevant to asst. yr. 1998-99, the direction made by the CIT in taking the value of diamond and gold jewellery at the rate prevailing in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DIS, 1997 were received. These included application by Shri Inder Kumar Bachani, form under s. 65(1) prescribed under r. 3 of IT Rules, statement of voluntarily disclosed income, valuation report as on 1st April, 1987 dt. 26th Dec., 1997, affidavit of Shri Inder Kumar Bachani, return and statement of income (copies of these papers have been filed by the assessee in the paper book and are available at pp. 35 to 47). 5.3 These papers were sent from the office of CIT, Surat to ITO-III, Kanpur who issued letter dt. 7th Feb., 2002 to the assessee. As per this letter/notice, the assessee was required to appear on 12th Feb., 2002. 5.4 On 12th Feb., 2002, the Authorised Representative of the assessee appeared and the AO drew the order-sheet dt. 12th Feb., 2002, which is as under : "Order-sheet, dt. 12th Feb., 2002 Shri M.K. Shukla, advocate attended (sic-and) Sri Basant Bachani the younger brother of Shri I.K. Bachani, attended. They state that though the statements, i.e., the enclosures of the declaration have been signed by Shri I.K. Bachani but the declaration form has never been signed by him. He, i.e., Basant Bachani has also stated that someone who is rival of Shri I.K. Bachani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en filed in ITA No. 623/Lucknow/2005. 5.9 The order passed by the AO under s. 148/143(3) was examined by the learned CIT who issued a notice under s. 263 of the IT Act, dt. 21st March, 2003. The assessee filed reply to this notice on 31st March, 2003. In this reply, the assessee submitted that there is no material with the Department for alleging that the assessee had acquired any gold, jewellery or diamonds in the previous year relevant to asst. yr. 1998-99 and in absence of any material to hold that the assessee acquired jewellery or gold and diamond in the previous year relevant to asst. yr. 1998-99, income could not be assessed from undisclosed income in that year. In para (v), it was specifically submitted that the proceedings of reassessment initiated under s. 148 are unwarranted and without jurisdiction. 5.10 The learned CIT, however, passed order under s. 263 on 29th Jan., 2003 and set aside the order of AO. The relevant observations and direction of the learned CIT are being reproduced as under : "6. As already mentioned above, the assessment under s. 148/143(3) of the IT Act, 1961 was made on the basis of a set of documents forwarded by CIT-II, Surat, regarding declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he next argument of the learned counsel for the assessee was that the order passed under s. 148/143(3) was itself an invalid order because the AO had no jurisdiction to pass order under s. 148/143(3) on the basis of material before him. In this regard, it was submitted by him that although the assessee had denied to have filed any declaration under VDIS, but even presuming that any such declaration was filed by the assessee then also on the basis of that material and in absence of any other material with the Department, no basis for reopening assessment for asst. yr. 1998-99 is made out. It was explained by the learned counsel that even as per the alleged affidavit and the declaration, etc. the assessee had disclosed income on account of acquisition of diamond, jewellery, cash, etc. for asst. yrs. 1980-81, 1981-82, 1984-85 to 1997-98. In this regard, he made specific reference to statement of voluntarily disclosed income available at pp. 39 and 40 of the paper book and affidavit at p. 42 of the paper book. It was pointed out that even before the AO, the assessee challenged the proceedings on this basis but the AO had not adjudicated the issue while completing the assessment order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red the entire material. So far as the first contention of the learned counsel for the assessee regarding denial of authorship of the documents pertaining to VDIS is concerned, since the assessee has admitted his signatures on the affidavit and other documents, the burden was on the assessee to show that the signatures were obtained under fraud, coercion, mis-representation or threat. Although in the statement recorded and also in the affidavit and letters, the assessee has reiterated his version stating that the signatures were obtained by somebody with oblique motive but, in our opinion, the assessee had not been able to substantiate such version. Neither any FIR was filed by the assessee against any such fraud nor any specific details of such fraud had been given. It may be that the assessee might have prepared some documents but later on might have not filed the same and somebody else taking advantage of the situation might have sent the papers to the office of CIT, Surat. However, in absence of any strong explanation, it cannot be believed that the papers were signed by the assessee under some misrepresentation, fraud or coercion. Thus, we hold that the papers of VDIS were pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e benefit of VDIS, 1997 and accordingly I offer jewellery, cash for the tax. 3. That particulars of jewellery are mentioned in the registered valuer's report annexed herewith for the valuation as on 1st April, 1987. The summary of the jewellery and its cost of acquisition is as under : Items Year of acquisition Approx. quantity Weight (Rs.) Remarks Diamonds Between asst. yr. 1980-81 723 pcs. 36.25 Cts. 1,34,125 Diamonds Between asst. yr. 1981-82 684 pcs. 41.04 Cts. 1,68,264 Gold ornaments Between asst. yrs. 1984-85 to 1987-88 ' 81.00 Gm. 16,119 3,18,508 The above declaration is made for the purpose of making declaration under the VDIS, 1997. The above information is true to the best of my information and belief. Signed in witnesth hereof on...... day of December, 1997 at Surat. Sd/- (Inder Kumar Bachani) Karta Declarant" 8.3 It may be pointed out that except these two documents, there is no other material with the Department to hold that the assessee had acquired any jewellery or any property in the previous year relevant to the asst. yr. 1998-99. In fact, in this aspect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been issued. In our considered opinion, the material on the basis of which reopening has been made for asst. yr. 1998-99 cannot at all justify the reopening of assessment as there was no basis for doing so. On the basis of documents on which reopening has been made, it cannot be said that any income for asst. yr. 1998-99 escaped assessment because on the basis of such material, prima facie, it cannot be believed nor could there be any reason to believe that income for this assessment year has escaped assessment. The Department has no other material in its possession for having reason to believe that income pertaining to asst. yr. 1998-99 had escaped assessment. 8.6 In view of the above, we are of the considered opinion that action taken under s. 148/147 was wholly illegal because there was no basis for reopening of assessment as has been done in this case. The order was, therefore, without any jurisdiction and thus void. 8.7 Since the assessment order passed under s. 147/143(3) was itself illegal and void, learned CIT was having no justification to invoke jurisdiction under s. 263 against such void or non est order. In the case of Paul John, Delicious Cashew Co. (supra), the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant to asst. yr. 1998-99. No such finding can be recorded on the basis of the material which came to the possession of the Revenue and besides this material there was no other material collected by it to hold that the assessee was owner of any money, bullion, etc. in the previous year relevant to asst. yr. 1998-99 in the terms and conditions contained under s. 69A of IT Act. In this regard, reference can be made to the decision of Patel Cotton Company Ltd. vs. Asstt. CIT (supra) and CIT vs. Gabrial India Ltd. (supra) which fully support our findings. In the case of CIT vs. Gabrial India Ltd. (supra), the Hon'ble Bombay High Court has observed as under : "Held, that the ITO in this case had made enquiries in regard to the nature of the expenditure incurred by the assessee. The assessee had given a detailed explanation in that regard by a letter in writing. All these were part of the record of the case. Evidently, the claim was allowed by the ITO on being satisfied with the explanation of the assessee. This decision of the ITO could not be held to be 'erroneous' simply because in his order he did not make an elaborate discussion in that regard. Moreover, in the ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds raised before him. On the other hand, the learned Departmental Representative submitted that the approach of the learned CIT(A) in holding the appeal as infructuous is fully justified in law. 11. In rejoinder, the submission of the learned counsel for the assessee was that the entire matter is before the Tribunal and, therefore, the Tribunal is seized of the entire matter and the legal issue raised before it should be adjudicated. In support of his argument, the learned counsel for the assessee has placed reliance on the decision in the case of Smt. Kamini Hanskamal Grover vs. ITO (supra). 12. We have carefully considered the entire material on record. In ground Nos. 3 and 4, the averment of the assessee is that the assessment order dt. 29th Jan., 2003 passed under s. 147/143 of IT Act is liable to be quashed as void ab initio. In support of these grounds, the learned counsel advanced the same arguments which he has advanced while arguing ITA No. 486/Del/2003 and which arguments have been discussed by us while deciding that appeal. The learned counsel also placed reliance on the decision reported in the case of Smt. Kamini Hanskamal Grover vs. ITO (supra) and pointed out ..... 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