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TMI Blog2008 (10) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 143(3) on a total income of Rs. 9,73,910. The reason stated by the assessing authority to reopen the assessment is that there is a difference in gross receipts as per TDS certificates and as per books of account. According to the Assessing Officer, the difference was Rs. 10,272. When the reassessment was taken in first appeal, the first ground raised by the assessee before the Commissioner of Income-tax (Appeals) was on the validity of notice issued under section 148. The contention of the assessee was that such notice was never served on the assessee. The Commissioner of Income-tax (Appeals) accepted the above contention of the assessee and cancelled the assessment proceedings holding the notice under section 148 void ab initio. The second contention raised by the assessee before the Commissioner of Income-tax (Appeals) was on the merits of the case. The assessment was reopened on the ground of escapement of income to the extent of Rs.10,272 being the difference in gross receipts as per TDS certificates and books of account. But, according to the assessee, the said difference pointed out by the Assessing Officer for issuing notice under section 148, was not adde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preciated that the assessee in his letter dated January 5, 2005, February 9, 2005 and March 1, 2005 has mentioned that it was in the reference to the notice under section 148 dated December 3, 2004 and thus has acknowledged the issuance of notice under section 148. (5) The learned Commissioner of Income-tax (Appeals) ought to have appreciated that before the Assessing Officer the assessee has not called for reasons for the initiation of proceedings under section 147 but has chosen to respond to the notice under section 148 and has taken part in the assessment proceedings by furnishing the details as and when called for. (6) The learned Commissioner of Income-tax (Appeals) ought to have followed the decision of the hon'ble Supreme Court in the cases of CIT v. Jai Prakash Singh [1996] 219 ITR 737 and in the case of Estate of late Rangalal Jajodia v. CIT [1971] 79 ITR 505 wherein it was held that an omission to serve notice or any defect in its service may render the assessment order irregular, but not void or illegal. (7) The learned Commissioner of Income-tax (Appeals) ought to have appreciated that in the case of A. Soundararajan v. ITO V(2), Chennai in I.T. A. No. 1669-1674(Mds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may make additions of income which has come to his notice subsequently in the course of the proceedings under section 147. That means once the assessment is lawfully reopened by the assessing authority after issue of notice under section 148, the item to be assessed is not that income which was initially relied upon by the Assessing Officer alone, but also all other items of income which has come to his notice in the course of reassessment proceedings under section 147. It means all items of income may be assessed other than those which would have already been assessed in the original assessment. It does not mean that the Assessing Officer should invariably add the items of income based on which the belief of escapement was formed by the Assessing Officer. What is to be relied on by the Assessing Officer is the "belief of escapement" and not fool-proof evidence. In a case where the Assessing Officer has reason to believe that a particular item of income has escaped assessment and if that is demonstrated in the proceedings, he can issue notice under section 148. Once the assessment is reopened in that manner, the Assessing Officer cannot mechanically make an addition. He should giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 148 was served on the assessee or not. The contention of the assessee before the Commissioner of Income-tax (Appeals) was that the notice under section 148 dated October 8, 2003 was never received by the assessee. He has also submitted before the Commissioner of Income-tax (Appeals) that he never filed any return in response to the notice under section 148 and the assessment order itself does not mention that the assessee filed return in response to notice under section 148. He explained that the assessee filed a letter dated December 18, 2002, addressed to the Income-tax Officer, Business Ward III(2) intimating the change of address. He had submitted before the Commissioner of Income-tax (Appeals) that the assessee had intimated the change of address as early as on December 18, 2002. Therefore, the Assessing Officer could have despatched the notice to the new address of the assessee whereas the notice was addressed to the old address. Therefore, the assessee did not receive the notice under section 148. He also stated that the letter dated December 3, 2004 issued by the Assessing Officer in which it was stated that the notices issued posting the case for hearing on Jun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es which were not served on the assessee are available on the records of the Assessing Officer. Even though the assessee has stated that the notices were not served on him, it is a fact that the assessee had caused the appearance of his authorised representative before the Assessing Officer in the course of reassessment proceedings and difference in gross receipts pointed out by the assessing authority was explained. That is why the said differential amount was not added as income in the reassessment proceedings. The first notice, according to the assessee, was issued under section 148 was not received by him. But, at the same time, the assessee has responded to the said notice and filed the return and thereafter appeared before the assessing authority to complete the reassessment proceedings. The notice issued by the assessing authority to the new address has been served on the assessee. Certain notices issued in between to the old address were not received by the assessee. Those notices returned by the postal authorities were available on record whereas again we repeat that the original postal cover if returned by the postal authorities, is not available on record. Therefore, fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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