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TMI Blog2013 (7) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 26.03.2007, just before the limitation of time getting barred, is only to overcome the first proceedings which were not held to be valid. Thus as seen from the facts of the case it is only to circumvent the illegality committed by the AO in the fist assessment proceedings he has recorded the reasons for initiating second time on an issue which was subject matter of assessment in the first reassessment proceedings. Once a proceeding in respect of an item other than the one mentioned in the notice u/s 148 has been taken into consideration and the same is subsequently not upheld in appeal, it is not possible to restart the proceedings in respect of the same item afresh. See Smt. Anchi Devi vs. CIT [2008 (3) TMI 49 - HIGH COURT PUNJAB AND HARYANA] & Durgamba [1997 (7) TMI 49 - MADRAS High Court]. There is merit in assessee's contention that the AO cannot refer the matter to substitute 'fair market value' for 'full value of consideration received' in the assessment order as provisions of section 50C are not applicable. Be that as it may, since the entire proceedings are considered to be bad in law, there is no need to adjudicate the grounds on merits and the additional groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 147 (called first reassessment proceedings), the assessee objected to examination of this issue when the assessment was reopened on a different issue. The AO, however, rejected the contention and arrived at the capital gains by allowing indexation of cost and bringing to tax the capital gains at Rs.27,78,947/-. While doing so, he also left a note that the value of sale price would be modified subsequent to DVO's valuation report as and when the same was received, as he referred the issue to DVO. Assessee challenged the order passed on 24.05.2006 and the learned CIT(A), vide his order dated 07.02.2007, quashed the reassessment proceedings on the reason that the reasons for reopening were not valid. The Revenue did not prefer any second appeal. However, immediately thereafter, the same AO again recorded reasons under section 147 vide order sheet dated 13.03.2007 for issuance of fresh notice under section 148. In this note, the AO considered the capital gains on sale of property alone as the reason for reopening and, after obtaining permission from CIT, issued another notice under section 148 dated 26.03.2007. This notice was issued within six years from the end of the assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since these two appeals are interlinked, these are considered together and decided by this common order. 6. The learned counsel for the assessee challenged the second reopening and referred to the orders passed by the AO and the CIT(A). He also submitted detailed note on why second reassessment proceedings after the first reassessment proceeding are bad in law and to be cancelled. He relied on the following decisions:- i. CIT vs. Rao Thakur Narayan Singh 56 ITR 234 (SC) ii. Manoo Lal Kedarnath vs. Union of India 114 ITR 884 (All) iii. CIT vs. V.R. Durgamba 223 ITR 95 (Mad.) iv. CIT vs. Air Craft Radio Corporation 292 ITR 64 (P H) v. R.K. Nagpal vs. CIT 103 TTJ (Nag) 554 vi. Babulal Lath vs. ACIT 83 ITD 691 (Mum) vii. Smt. Anchi Devi vs. CIT 218 CTR (P H) 11 7. He also made submission on capital gains and also on powers of the AO to refer under section 50C and also determination of sales consideration under section 50C and also principles involved in 'full value of consideration' and 'fair market value' referred to in the Act. 8. The learned D.R. in response submitted that the first reassessment proceedings were initiated for brining to tax an amount under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present case, as the earlier reassessment proceedings under section 147(1) were quashed by the competent authorities on the view that the material on the basis of which the Income-tax Officer initiated those proceedings did not have a rational connection with the formation of the belief that the assessee had not made a true disclosure at the time of the original assessment, the same position would still be obtained in respect of the second reassessment notice. The Income-tax Officer could not on the same facts reopen the proceedings on the ground that he had new information. If he did so, it would be a clear attempt to circumvent the said order which had become final: CIT v. Rao Thakur Narayan Singh [1965] 56 ITR 234 (SC) relief on. As regards the items other than the two above-mentioned in the earlier notice under section 148 dated December 2, 1971, even those other items were considered by the Income-tax Officer in his earlier reassessment order which was set aside on appeal. An Income-tax Officer is entitled to bring to tax items of income other than those which had been included in the notice under section 148: V. Jaganmohan Rao v. CIT [1970] 75 ITR 373 (SC) relied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout jurisdiction. Subsequent to this cancellation, the Income-tax Officer issued notice under section 147(a) for the purpose of including in the assessment the sum of Rs. 3,423. It was also found that the Income- tax Officer in the reassessment under section 147(a) carried out another modification by treating the remuneration received by the assessee from company R and another company I totalling Rs. 24,000 as the income of the assessee under the head "Other sources", instead of under the head "Salary" as originally treated. The Tribunal was justified in cancelling the reassessment" 12. Similar view was also held by the Hon'ble Punjab Haryana High Court in the case of Smt. Anchi Devi vs. CIT 218 CTR 11 wherein it was held as under: - "It may be seen that the AO had no fresh material before him. A perusal of the reasons recorded by him for reopening the assessment proceedings vide notice dt. 22nd March, 2004 shows that the same reasons have been recorded which were stated in the earlier notice served under s. 148 on the basis of which the assessment was made on 14th Feb., 2003 and which was quashed being barred by limitation. Thus, from the facts itself, it is crystal clear t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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