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TMI Blog1972 (6) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate Assistant Commissioner, who allowed the same on 24th September, 1962, and directed the Income-tax Officer to give the petitioner the benefit of registration for the assessment year 1959-60. The Commissioner of Income-tax started, proceeding under section 33B of the Income-tax Act, 1922, to cancel the assessment order of 23rd December, 1959, and ultimately cancelled the order of assessment by memo. dated 26th October, 1961. The petitioner preferred an appeal before the Income-tax Appellate Tribunal, Calcutta, and the same was allowed by the Tribunal on 16th October, 1962, and the Commissioner's order under section 33B was set aside. Thereafter, the income-tax department applied for reference under section 66(1) of the Income-tax Act to the Tribunal which was pending at the time of issue of the rule on 5th December, 1966. We are, however, informed by Mr. Lahari and it is not denied by Mr. Bhattacharjee, that the same was not pressed by the department before the Tribunal. The Income-tax Officer, who in this case is successor to the original assessing officer, issued the notice under section 148 on 17/18th October, 1961, on the ground that he had reason to believe that income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ch. Dey, no evidence, whatsoever, could be produced. Only they were represented to be well acquainted with the assessee and to have their own shop and/or other sources of income having substantial financial capacity to justify the deposits made by them. The assessment was completed under section 23(3) on December 23, 1959, on a total income of Rs. 58,530. Subsequent enquiries revealed that the facts represented and particulars furnished by the assessee in the course of the assessment proceedings in support of the aforesaid cash credits are not correct and complete, (Copy of the inspector's report dated March 4, 1961, is enclosed). From a perusal of the inspector's report it appears that 4 persons out of the 7 persons were not traceable at the time of enquiry and that none of the persons had capacity to make the alleged cash deposits with the firm and the assessee-firm had brought in its own concealed income in the garb of the cash deposits in the rianied of third parties. I therefore reason, to believe that the amount of cash credits of 48,500 represent the assessee's income from undisclosed sources which escaped assessment by reason of the assessee's failure to disclose the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner's accounts. But, the order must have been passed prior to February 4, 1961, when the inspector recorded the statements of two depositors. The Commissioner's order discloses a contention made by the petitioner before him in the following terms: " It is further contended by the learned representative that subsequent enquiries made by the Income-tax Officer were invalid and no cognisance should be taken of the statement or report obtained in the course of invalid proceedings. I have carefully considered this contention too and I hold that there is some force in the argument of the learned representative of the assessee since there were no assessment proceedings. " It is clear that the enquiry and the report referred to in the above extract are none other than those conducted by the income-tax inspector which must have been forwarded by the Income-tax Officer to the Commissioner, who heard the case on October 5, 1961. The reasons given by the Income-tax Officer in submitting his report to the Commissioner also referred to the subsequent enquiries and to the report of the inspector dated March 4, 1961. It is clear that action under section 147(a) was initiated basing on the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors were "not known" and he recorded the statements of two depositors and furnished some information with regard to the third. Earlier, at the time of the original assessment, the Income-tax Officer conducted an enquiry with regard to the cash depositors and recorded the statements of two of them. The Income-tax Officer accepted their statements as well as those of the assessee with regard to the other depositors. It is, therefore, obvious that the succeeding Income-tax Officer only took a different view of the matter from the one earlier entertained by his predecessor. The provisions of section 147(a) are, therefore, clearly not attracted in this case and the impugned notice under section 148 read with section 147(a) is without jurisdiction. This view receives support from the decision of the Supreme Court in Commissioner of Income-tax v. Bhanji Lavji. Mr. J. P. Bhattacharjee, the learned counsel for the department, drew our attention to a decision of the Andhra Pradesh High Court in Anne Nagendran and Bomma Reddi Venkayya Co. v. Commissioner of Income-tax and he relies upon the following passage: "Where the Income-tax Officer, in our view, after considering the cash credi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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