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TMI Blog2016 (1) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... during the course of search and seizure operations. The submission and reply made by the assessee was considered and thereafter the Assessing Officer passed an assessment order on 31.03.1994 making addition in the income of the assessee. The assessee thereafter preferred an appeal, which was partly allowed by the Appellate Authority on 17.02.1995, pursuant to which the appeal effects were given. 2. For the assessment year 1992-93 an assessment order was made on 31.03.1995. The assessee, being aggrieved filed an appeal. The Ist Appellate Authority passed an order on 12.01.2004 and, while disposing of the appeal for the assessment year 1992-93, made certain observations for the assessment year 1991-92. The extract of the observation made by the Appellate Authority is extracted hereunder: "13. The appellant surrendered a sum of Rs. 1000000/- in assessment year1991-92. The A.O. in his assessment order dated 31.3.94 noted that the appellant had inflated purchases to the tune of Rs. 289698/- and further the A.O. Gave credit of Rs. 346477/- and for the balance amount, addition of Rs. 653523/- was given. The A.O.has generally discussed these bill books and has nowhere meticulously gone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts necessary for making an assessment and, therefore, held that the notice issued under Section 148 of the Act beyond the period of four years from the end of the assessment in question was invalid. The Department, being aggrieved, has filed the present appeal under Section 260-A of the Act. The appeal was admitted on the following substantial question of law: "(1) Whether on the facts and circumstances of the cased, the Hon'ble Tribunal erred in law in quashing the assessment completed u/s 143(3)/148 by observing that the issue of notice u/s 148 was beyond the period of four years from the end of relevant assessment year without appreciating that the notice u/s 148 was issued by the AO in consequence to the directions given by the Ld. CIT (A) and as per the provisions of section 150(1) of the Act. There is no bar of limitation for issue of notice u/s 148 in consequence of or to give effect to such directions of the appellate authorities? (2) Whether on the facts and circumstances of the case, the Hon'ble Tribunal erred in law in quashing the assessment made u/s 143(3)/148 by observing that there was no failure on the part of the assessee to disclose fully and truly all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. The Learned Senior Counsel however, conceded that the notice issued under Section 148 of the Act was a valid notice issued within the period of limitation specified under Section 149 of the Act but submitted that the provision of Section 150(1) of the Act was not applicable in the facts and circumstances of the instant case. 10. Having heard the learned counsel for the parties, we find that the reasons recorded by the Assessing Officer before issuance of notice under Section 148 of the Act is as under: "M/s Hemkunt Timber Ltd. C-11 Panki Industries Area Site No.1, Kanpur Status:Company Asstt. Year 91-92 10.4.2001 A search and seizure operation was conducted on 12.3.92 at the business and residential premises of the assessee group u/s.132 of the IT Act. Apart from other incriminating materials, certain blank bill books were also found which were seized vide Annexure PMB-14,15,16,17,18 and 19 to the panchnama at the residence. The return of income for the present assessment year was filed on 31.12.91 declaring total income Rs. 1,88,,483/-. After examination of the seized material the assessment was completed u/s. 143(3) on 31.3.94 on a total income of Rs. 16,14,200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reason to believe that there was an omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. We find that the original assessment order dated 31.03.1994, considered all the seized documents, which were observed in the reasons to believe. Explanation given by the assessee, was also considered in the original assessment proceeding. The Assessing Officer, after considering the explanation, observed in the original assessment order as under: "(4) (I) Since the time-barring assessment was pending the assessee could furnish the details and information for assessment purpose for A.Y.1991-92. It was also required vide this office letter dated 29.3.93 and finally on 7.3.94 giving specific papers to be explained and get them verified from the regular books of account which pertained to the assessment year 1991-92. The assessee com.has furnished details etc. and also furnished explanation from time to time in respect of seized papers detailed in letter dated 7.3.1994 which have been duly considered and discussed. During the course of assessment proceedings, alongwith other details the assessee was asked to give the details of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial facts necessary for making the assessment. The notice, in our view, issued under Section 148 of the Act was invalid. 16. In so far as the period of limitation is concerned, the present dispute relates to the assessment year 1992-93 and as per the then existing provision of limitation specified under Section 149 of the Act, the period of limitation was 10 years. Accordingly, the reassessment notice could be issued on or before 31.05.2001 whereas in the instant case reassessment notice under Section 148 of the Act was issued on 11.04.2001, which was within the period of limitation. Consequently, we are of the opinion that the notice issued under Section 148 of the Act was issued within the period of limitation. 17. In the light of the aforesaid, the question of invoking the provision of Section 150(1) of the Act does not arise and it is not necessary for us to dwell on this aspect of the matter. We may however, observe that Section 150 of the Act provides that the power to issue a notice under Section 148 of the Act in consequence of or giving effect to any finding or direction of the Appellate or Revisional Authority or the Court is subject to the provisions contained in Se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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