9911796707
TMI Blog1990 (11) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; 68,699.00 1973-74 1,39,257.00 1974-75 48,000.00 1975-76 1,20,230.00 1976-77 22,062.00 ------------ Total 7,68,897.00 ------------ Thus, the total investment up to 1976-77 shown by the petitioner was in the sum of Rs. 7,68,897. Assessments for the years 1968-69 to 1973-74 were simultaneously taken up and completed by the Income-tax Officer, Special Ward, Ajmer, on May 13, 1974. In the said assessment proceedings, the petitioner submitted a letter dated April 29, 1974, detailing therein the amount of investment and sources thereof. He also submitted a valuation report from Messrs. Basant Singh and Company, Engineers, Architects ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestment was reduced from Rs. 3,26,872 to Rs. 3,14,907. Similar action was taken by the Incometax Officer in respect of the subsequent year 1975-76 for which an addition of Rs. 70,670 was made in the assessment order. The total of the two additions made for the years 1974-75 and 1975-76 came to Rs. 3,85,577 which was unexplained investment. The addition of the two amounts for these two years was the difference between the amount estimated by the valuer and the amount shown by the petitioner. Aggrieved by the order of the Income-tax Officer, an appeal was filed by the assessee which was allowed by the Commissioner of Incometax with the following observations : "....In this case, as stated earlier , the appellant had intimated the fact about the construction of the house property at Chandigarh, it had also furnished details showing the investment made by it from time to time and had also furnished details showing the amount of rent realised by it from the tenants. Now it was for the Income-tax Officer to examine them and come to a reasonable conclusion. In case he doubted the correctness of those details, he could have made necessary additions at the time of the original assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the assessee while reopening the assessment. This alone is sufficient to indicate that this question based on clause (b) of section 147 of the Act does not really arise for decision out of the Tribunal's order." Against the judgment of the High Court, an application for special leave to appeal before the Supreme Court was filed by the Revenue but that too was rejected. In this manner, the reassessment proceedings started by making additions for the assessment years 1974-75 and 1975-76 in the sum of Rs. 3,85,577 were held to be illegal and became final. It was held that neither section 147(a) nor section 147(b) applied. Subsequently, proceedings for reassessment in respect of the aforesaid four assessment years, i.e., 1970-71, 1971-72, 1972-73 and 1973-74, were taken. It is the notices issued in respect of these assessment years that are the subject-matter of decision in these writ petitions. What strikes one at the threshold is that the validity of these notices was challenged on the ground that once the attempt of the Income-tax Department to reassess the petitioner under clauses(a) and (b) of section 147 had failed, it was not open to the Department to make an effort to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of non-disclosure. This very controversy is for consideration in these years, viz., 1970-71 to 1973-74. The amount of non-disclosure was added in the aforesaid two years by the Income-tax Officer. Having failed in those two years, the Income-tax Officer intends to distribute the excess amount in the four years which are under consideration in the present writ petitions. This is on the ipse dixit of the Department and not on any concrete fact or basis. There should be a rational connection which postulates a direct nexus between the material coming to the notice of the Assessing Officer and the formation of the belief that there has been escapement of the income of the assessee from assessment in the particular year. It is not any and every material, howsoever vague and indefinite or distant, remote and far-fetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. If there is no rational and intelligible nexus between the reasons and the belief, on such reasons, no one properly instructed on facts and law could reasonably entertain the belief that the conclusion would be inescapable that the Assessing Officer coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year within which a notice under section 148 must be issued. In the cases falling under section 147(b) where there is no failure to file a return and no concealment, the limitation is four years from the end of the relevant assessment year. In this way, the period of four years in respect of each assessment year had already expired. Sri Singhal, learned counsel for the Revenue, urged that, as the rule of re judicata cannot apply to taxation proceedings, this court cannot derive any advantage for taking the view that the notices issued under section 147 were invalid. This proposition is not disputed. However, this general rule is subject to the qualification that a finding reached in the assessment proceedings for an earlier year, after due inquiry, would not be reopened in a subsequent year, if no fresh facts are found in the subsequent assessment year. This is on the principle that there should be a finality and certainty in all litigations including those arising under the Income-tax Act. (see CIT v. Bhilai Engineering Corporation (P) Ltd. [1982] 133 ITR 687 (MP)). Learned counsel for the Revenue reminded this court of its limited jurisdiction under article 226 of the Const ..... X X X X Extracts X X X X X X X X Extracts X X X X
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