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TMI Blog2012 (7) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... t on assuming jurisdiction u/s 147 regarding reassessment of escaped income he would keep on making roving enquiries and thereby including different items of income not connected or related with the reasons to believe on the basis of which he assumed jurisdiction - in favour of assessee. - ITA No. 2459/Del/2004 - - - Dated:- 25-5-2012 - SHRI A.D. JAIN, SHRI T.S. KAPOOR, JJ. Appellant by : Sh. Gurjeet Singh, CA Respondent by : Sh. Surender Pal, Sr. DR O R D E R PER T.S. KAPOOR, A.M. This is an appeal filed by the assessee against the order dated 26.04.2003 for A.Y. 1990-91. Grounds of appeal read as under: - 1) That the ld. CIT(A) on an order of the Tribunal dated 08/12/2003 setting aside the issue of action u/s 148 on which no order was passed in the earlier order of the CIT(A) has confirmed the action of the ld. A.O. for issuing the notice u/s 148 for the A.Y. 1990-91 since allegedly said was notice issued on 18.03.1997 and served on the advocate, Mr. Vashveer Arya who has been presumed to be an advocate of the dissolved firm M/s Arya Cycle Works, Railway Road, Karnal, the appellant, as a valid service, is bad in law. Whereas the alleged advocate has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition of Rs. 46,017/- allegedly to be as difference in the account of M/s Atlas Cycle Industries and M/s Atlas Auto Industries being Rs. 5806/- and Rs. 40211/-. 11)That none of the aforesaid additions arises out of the reasons recorded or relatable to the income under assessed or un-assessed under the provisions of law and these were not the basis for reopening the assessment and hence need to be deleted. 12)That the appellant disputes the levy of interest u/s 234A, 234B and 234C as the same is not leviable under the facts and circumstances of the case as no order in respect of levy of the same has been passed by the ld. A.A. 2. The brief facts of the case are that the assessee is a partnership firm and had filed a return of income declaring an income of Rs. 44,280/- on 18th March, 1997. The return was filed by the appellant in response to a notice for initiation of reassessment proceedings issued by AO u/s 148 of the Act. The AO was satisfied with the explanations submitted by assessee in respect of reasons recorded and did not make any addition on the basis of any of the recorded reasons but instead made additions on certain other points by making roving enquiries a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue back to the file of CIT(A) with the direction to decide the specific grounds raised by the appellant and also to adjudicate upon the grounds by way of a speaking order after giving the appellant an opportunity of being heard. 6. To comply with the above directions of ITAT the case was fixed for hearing on various dates. The various submissions submitted before the CIT(A) are read as under: - That the assessee firm was consisting of two partners namely Hakikat Rai and Sh. Madan Lal. That the firm was dissolved by executing Dissolution Deed on 23.08.1991 and the assets and liabilities were taken by one of the partner of the firm Sh. Madan Lal. After retirement of the partner Sh. Hakikat Rai from the said firm the other partner Sh. Madan Lal constituted a partnership firm with his son Sh. Chander Mohan. Sh. Madan Lal died on 2.1.1995. On death of Sh. Madan Lal, the remaining partner Sh. Chander Mohan has joined hands with his mother to do the same business of Arya Cycle Works. Some enquiries were made for the asstt. Year 1990-91 by ADI, Branch Ambala for purchasing a draft since the ADI was not satisfied with the explanation filed by the assessee the proceedings u/s 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in response to above notice. The assessment year involved is A.Y. 1990-91 and the assessee had no right to fie valid return in respect of above year on 18.3.1997. The return filed was void ab initio and could not be acted upon in the light of invalid notice. The assessment proceedings were liable to be cancelled. 9. Aggrieved against the orders of ITAT the revenue filed an appeal before the Hon ble Punjab Haryana High Court to find an answer on substantial question of law which is as follows: - Whether on the facts and in the circumstances of the case the Hon ble ITAT was right in law in canceling the assessment by holding that the service of notice u/s 148 in which no assessment year has been mentioned, on Authorized Representative of the assessee is not legal and valid inspite of that fact that the assessee filed the return in response to the notice on the very same date and during reassessment proceedings or even before CIT(A), no objections were raised regarding validity of notice or its service? 10. The Hon ble High Court has decided the matter in favour of the revenue and directed the parties to appear before the Tribunal to adjudicate on the merits of the case on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t vide its order dated 23rd July, 2010 has decided the matter in favour of the revenue and hence, grounds of appeal no. 1 to 6 are already decided by the Hon ble High Court and do not require further adjudication. 14. The grounds of appeal relating to points 7 to 11 relates to various additions made by AO during reassessment proceedings, which we have observed that these were not part of the reasons recorded. The judgment of Hon ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. Vs. CIT (2011) 336 ITR 136 (supra) and 242 CTR 117 has held that though AO had jurisdiction to reassess the income other than the income in respect of which proceedings u/s 147 were initiated, but he is not justified in doing so when the very reasons for initiation of those proceedings seized to survive. The Hon ble Delhi High Court further observed that legislature could not be presumed to have intended to give blanket powers to the AO that on assuming jurisdiction u/s 147 regarding reassessment of escaped income he would keep on making roving enquiries and thereby including different items of income not connected or related with the reasons to believe on the basis of which he assumed jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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