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TMI Blog1989 (3) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... he subject of income-tax assessments and assessments under the Wealth-tax Act, 1957. In the assessments, the valuation date was March 31, 1971. Long after the assessments were concluded, the Special Survey Squad at Calcutta appears to have informed the Revenue that the building was undervalued in the assessments. Thereafter, the Revenue obtained a report from the District Valuation Officer. Based upon the report of the District Valuation Officer, fifteen notices were served on the assessees to reopen the assessment orders. The notices thus served on the assessees are assailed in the fifteen writ petitions. In the case of the Hindu undivided family of Gulabrai, the income-tax assessments for 1969-70, 1971-72 and 1972-73 are sought to be reopened. In the case of the Hindu undivided family of Keshoram Radheshyam, the income-tax assessments for 1969-70, 1971-72 and 1972-73 are sought to be reopened. Similarly, in the case of wealth-tax assessment of Keshoram Radheshyam, assessments for 1971-72, 1972-73, 1973-74, 1974-75 and 1975-76 are sought to be reopened. (It is not shown as to why Gulabrai's wealth-tax assessment for 1975-76 is not sought to be reopened). Now, we may set out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Keshoram Radheshyam for the assessment year 1971-72 is dated December 23, 1971, reasons were recorded on February 29, 1980, and notice was issued on March 22, 1980. As respects assessment year 1972-73, the order was passed on November 5, 1973, reasons were recorded on March 13, 1981, and notice was issued on March 13, 1981. As respects assessment year 1973-74, the assessment order is dated November 5, 1973, reasons were recorded on May 27, 1981, and notice was issued on May 27, 1981. As respects assessment year 1974-75, the assessment order is dated July 24, 1975, reasons are recorded on May 27, 1981, and notice was issued on May 27, 1981. As respects assessment year 1975-76, the assessment order is dated November 5, 1975, reasons were recorded on May 27, 1981, and notice was issued on May 27, 1981. It is seen in the course of all these proceedings that the assessees submitted returns and relevant to the valuation of the building as on March 31, 1971, the Authorised Valuation Officer's report dated October 28, 1972, was submitted and in that the plinth area of the three-storeyed building was shown as 13,319 sq. ft., garage and mezzanine 778 sq. ft., left room area 878 sq ft. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons will be disclosed in the court. At one point of time, the Revenue threatened to claim privilege though it was not pressed later. Thereafter, having regard to the decision of the Supreme Court, the Revenue argued that the assessee need not be informed of the reasons at the notice stage of the proceedings. In our view, the better course of procedure for the Revenue is to inform the assessee of the grounds on which the assessments are sought to be reopened. The grounds, if they are assailed in the court, under article 226, the tenability or otherwise of the grounds will be adjudged in the court. Adoption of this procedure will result in an orderly proceeding. In this regard, the decision of the Madras High Court in Presidency Talkies Ltd. v. First Addl. ITO [1954] 25 ITR 447 was referred to by the Revenue where it is held that the grounds need not be informed to the assessee at that stage of the proceedings. That court observed (at page 448): "The requirement regarding the communication of the reasons to the Commissioner is, in our opinion, intended to safeguard the interests of the assessee against any hasty action on the part of the Income-tax Officer under section 34 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quad's complaint or thereafter and/or at the report of the District Valuation Officer, to reopen the concluded issue. This aspect is covered by the numerous decisions of the Supreme Court and it is not necessary to cover all of them in the instant case. One of us (Chief Justice) considered the relevant cases in Abdul Rab Abdul Salam v. ITO [1988] 174 ITR 424 (Gauhati), and what is stated in that case covers the issue in the instant cases. In that case, it is held (at p. 427) : "The principle in such cases is culled out from the words in clause (a) of section 147 of the Income-tax Act. The words are whether the assessee disclosed 'fully and truly all material facts necessary for assessment'. Once the assessee does that, what inferences are to be drawn is in the hands of the Income-tax Officer. It is open to the Income-tax Officer not to act on the representation of the assessee, call for additional information or further investigate facts and pass the assessment order. In doing so, he may totally reject the case of the assessee or partially accept the representation of the assessee or fully agree with the case of the assessee. Once the assessment order is finalised or issues in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly and truly all material facts necessary for its assessment. The assessee discharged his obligation so it was held, when he tendered books of account and evidence from which material facts could be discovered. It was for the Income-tax Officer to decide whether the documents produced by the assessee were genuine or false. All the aspects considered in the two earlier cases were explained and followed. Thus, once the assessee disclosed the necessary material facts and assessment is finalised, later, on a different conclusion on the same facts, the assessment cannot be reopened. If this was not the law, as held by the Privy Council case from Australia in Hoystead v. Commissioner of Taxation [1926] AC 155, 'litigation will never end'. The assessee can never rest in peace. The Revenue can always reopen and such a power to reopen the orders can be wielded to harass the assessee. Litigation can never be concluded finally. All assessments can be reopened with a view to 'obtain another judgment upon a different assessment of facts'. The Privy Council further held (at page 165) : 'Parties are not permitted to begin fresh litigations because of new views that they may entertain of the law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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