9911796707
TMI Blog1983 (1) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... Adoni Groundnut Seeds and Oil Merchants' Association. Its business consists of speculation in groundnut oil and groundnut seeds with members as well as non-members of the Association either for purchase or for sale. So far as non-members are concerned, the assessee charges commission on transactions entered into with them. In the return filed for the assessment year 1958-59, the assessee returned a net loss of Rs. 11,159 in ready and speculation business. The ITO, however, while making the assessment, separately assessed the income from speculation business and ready business and determined the net loss in speculation business at Rs. 39,206. Following the order of the AAC in an appeal relating to an earlier order, the ITO allowed the loss a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oper or permissible and on that basis completed the reassessment. Before the ITO, the assessee contended that the assessment having been reopened on a sole ground falling under s. 147(a) of the Act, it is not open to the ITO to shift to the ground under s. 147(b) of the Act. In other words, the argument was that having found that the payments which were alleged by him to be bogus, were not bogus, but were genuine, the ITO had no jurisdiction to complete reassessment on a different ground not alleged in the notice under s. 148. Admittedly, it must be stated, the disallowance of setting off mentioned above, on the basis of the decision of the Supreme Court, falls under s. 147(b) of the Act. Against the order of the ITO, the assessee filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reassessment proceedings initiated should be within the period of four years mentioned in that section ". But, a Full Bench of our court has taken a different view in CWT v. Subakaran Gangabhishan [1980] 121 ITR 69. Indeed, the reference to the Full Bench of our court was necessitated by the conflict between the aforesaid decision of the Madras High Court and the earlier decisions of this court in Pulavarthi Viswanadham v. CIT [1963] 50 ITR 463 and CIT v. Jeskaran Bhuvalka [1970] 76 ITR 128. The decision of the Full Bench has been rendered with reference to s. 17(1) of the W.T. Act which is ill pari materia with s. 147 of the I.T. Act. The Full Bench has held that at once the assessment is validly reopened under section 17(1) of the Act, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fall under cl. (b). In other words, colourable exercise of power is not to be countenanced. It is not open to the ITO to make pretence of issuing the notice under cl. (a), when in fact and in truth, he is seeking to reopen an assessment on a ground failing under cl. (b) alone. Following the decision of the Full Bench, it must be held that inasmuch as in this case notice under s. 147(a) of the Act has been held to have been validly issued-indeed the validity of the notice has not been questioned by the assessee as recorded by both the appellate authorities-it must be held that completion of reassessment on the basis of the ground falling under cl. (b) is permissible and competent even though made beyond four years. The decision of the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee no reason to doubt the correctness of this statement. Indeed, if this statement were not correct, as it is now alleged, one would have expected the assessee to say so expressly in his grounds of appeal. At least, before the Tribunal, the assessee ought to have contended that the above statement is not correct, and that no such withdrawal was made and that the validity of the notice is still being challenged by it. Even in the grounds of appeal before the Tribunal, there is no specific ground stating that the issuance of the notice is a colourable exercise of power or that it was merely a pretence. The only ground now relied upon before us is the one which says that the notice was bad in law. We are, however, not prepared to agree that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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