9911796707
TMI Blog1983 (12) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Officer had reopened the, assessment of the assessee for the assessment year 1962-63 under sections 147 and 148 of the Income-tax Act, 1961 ? " The statement of case relates to the assessment year 1962-63, the accounting period ending on March 31, 1962. The assessee is an individual being sole proprietrix of M/s. Sharda Trading Co. The assessee filed a return of income showing the same at Rs. 15,365 and claimed a loss of Rs. 52,208 as having been carried forward from the assessment year 1961-62. The return was filed before the ITO, Special Circle IV, New Delhi. The name of the assessee as mentioned in the return was M/s. Sharda Trading Company, Proprietrix Smt. Sharda Devi, 6, Rohtak Road, Delhi. The ITO made futile attempts to se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice under s. 263, inasmuch as the ITO had initiated proceedings under s. 147/148 of the Act, and those proceedings were pending. It was urged that no proceedings could be held by the Commissioner under s. 263 concurrently with the proceedings for reassessment of income alleged to have escaped assessment. The Tribunal came to the conclusion that the mere issue of a notice under s. 1471148 does not and cannot have the effect of cancelling or Tendering non est the earlier order of assessment and so long as there is an Order of assessment, it is capable of revision by the Commissioner. The Tribunal relied upon the case of Amritlal Bhogilal Co. [1958] 34 ITR 130 (SC), wherein it was argued before the Supreme Court that an order under s. 33B o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had not only the jurisdiction but it was his duty to levy tax on the entire income that had escaped assessment during that year. Reliance is also placed on CIT v. Assam Oil Company Ltd. [1982] 133 ITR 204 (Cal), wherein it was held that in view of the scheme of the Act, once a reopening is made, the entire assessment is set aside and the income which has escaped assessment, even though there is nothing to show the escapement of assessment, it should be examined and even in case where the assessee is entitled to any deductions which were not granted in the original assessment, the assessee would be so granted the deduction. The earlier view taken by the Calcutta High Court in Sun Engineering Works Pvt. Ltd. v. CIT [1978] 111 ITR 166 (Cal), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded. It would be noticed that sub-s. (2) provides that the Commissioner cannot revise an order of reassessment made under s. 147 of the Act. The ITO had merely initiated proceedings under s. 147 and no order of reassessment was made under s. 147. The intention of the legislature is clearly decipherable, viz., to give a power of revision when the Commissioner after examination of the record of any proceedings under the Act considers that any order passed therein by the ITO is erroneous and prejudicial to the interest of the Revenue. As long as the order stands, it is open to the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said purpose, be will have necessarily to take into account not only the escaped income in respect of which a notice under s. 148 read with s. 147 has been issued but also the entire income that has escaped assessment during that year. In other words, once an assessment is validly reopened and the ITO proceeds to make reassessment, the initial order of assessment stands automatically cancelled. The order of reassessment would take the place of the original order of assessment and till that is done, the original order of assessment would still be operative. None of these authorities cited by the counsel for the petitioner lays down that mere reopening of the assessment has the automatic effect of cancellation of the (original) assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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