9911796707
TMI Blog2008 (5) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was undertaken at some business establishment, and in that process one diary was found, which showed some entry regarding purchase of plot of land by the present assessee, in village 1-a-Chhoti, for a consideration of Rs.1,66,000/-, while in the agreement, it was shown to have been purchased for Rs.45,000/-. On this basis, a notice under Section 148 was issued to the present assessee. Then query letters were also issued. The assessee appeared, and explained, that he purchased the plot from his agricultural income, and also submitted the requisite return, showing the agricultural income. Then his statements were also recorded, wherein he deposed, that he carries on agriculture and animal husbandry. However, the Assessing Officer summoned the books of accounts of the establishment, at whose premises search was undertaken, and found, that during the period 4.3.95 to 16.3.95, the assessee had deposited Rs.1,65,000/-cash, which the assessee has failed to explain, therefore, this amount was taken to be unexplained investment, and was added to income. 3. It may be observed here that the transaction relating to the purchase of land relates to October 1994. 4. Against this order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g goes, the reason for reopening also goes. Thus it was found, that action taken by the learned Assessing Officer under Section 148/147 of the Act is illegal, and notice issued under Section 148 is ab initio void and was thus, quashed. 7. Arguing the appeal, it was contended by learned counsel for the Revenue, that a look at the provisions of Section 147 shows, that once the Assessing Officer has reason to believe, that any income chargeable to tax has escaped assessment, for any assessment year, he may, subject to provisions of Section 148 to 153, assess or reassess, such income, and also any other income chargeable to tax, which has escaped assessment, and which comes to his notice subsequently in the course of the proceedings under this Section. Thus, on the language of Section 147, if in the course of the proceedings under Section 147, any other income, chargeable to tax, which has escaped assessment, comes to the notice of the Assessing Officer, subsequently, still such income could be assessed very well, and therefore, the learned Tribunal has gone wrong in passing the impugned order. It was contended, that for initiating proceedings under Section 147, the sine-q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learly established to be agricultural income, which were lying deposited with M/s. Barar & sons, wherefrom it was withdrawn by cheque, and was invested, and the Assessing Officer himself also found the investment to have been properly explained, that being the position, the jurisdiction commenced, came to an end, at that point itself, and did not confer any jurisdiction on the Assessing Officer, to further continue with the assessment proceedings, simply because, he was of the opinion, that other escaped income had come to his notice, subsequently, in the course of the proceedings. In this regard, learned counsel has relied upon a judgment of Punjab and Haryana High Court, in CIT Vs. Atlas Cycle Industries, reported in [1989]180 ITR 319, which in turn is based on the judgment of Hon'ble the Supreme Court, in Bankipur Club Ltd. Vs. CIT, reported in [1971] 82 ITR 831 as well, apart from the fact, that it does consider various judgments also. Accordingly, it is contended by learned counsel for the assessee, that the impugned order doesn't require any interference. 9. We have considered the submissions, and have gone through the judgments cited at the bar, so also the impugned judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the powers of the Assessing Officer, to put to tax, any other income, chargeable to tax, which has escaped assessment, and which subsequently comes to his notice, in the course of the proceedings, but then, the prefixing words "and also", which succeeded "any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Section 148 to 153, assess or reassess such income". This expression was found to be making clear, that existence of the income, for which the Assessing Officer formed belief, to have escaped assessment, is a precondition, for including any other income chargeable to tax, escaping assessment, and coming to the notice of the Assessing Officer subsequently, in the course of the proceedings. Thus, unless and until such income, as giving rise to form belief, for escaping assessment, continues to exist, and constitutes a subject matter of assessment, under Section 147 "no other income" coming to the notice of the Assessing Officer, during the course of the proceedings, can be roped in. Thus, though by undertaking a long drawn exercise, but then, we have been able to decipher the reasons, appear to have existed in the mind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer." 17. Likewise in Jagan Nath Singhal's case [2000] 242 ITR 554 (P&H), again, this very view was taken, that was also a case, where the initiation of proceedings was challenged. It was also held, that the affidavit of the daughter of the petitioner, formed a reasonable ground for the Assessing Officer, to entertain a prima-facie reason to believe, about the escapement of income, and therefore, it was held, that the proceedings cannot be said to be without jurisdiction. It was also clarified, that the Court was not going into the merits of the case of the assessee, the assessee was left free to lead evidence, in the re-assessment proceedings, to show, that the expenditure incurred in the daughter's marriage was up to a specified extent, and as such, no income has escaped assessment. 18. In the present case, initiation of the proceedings is not under challenge before us, by either side, and rightly so. Therefore, the two judgments cited by the learned counsel for the Revenue, are of no assistance to the appellant. 19. Then we are referred to the judgment of Hon'ble the Supreme Court, in Bankipur Club Ltd.'s case, [1971] 82 ITR 831 wherein again, the question was about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year" and that, being that situation, being available, i.e. the Assessing Officer having entertained a "reason to believe", obviously on valid grounds, he acquires the jurisdiction to assess or reassess "such income", which obviously means, the income, which was chargeable to tax, and had escaped assessment for any assessment year, according to his "reason to believe", and while so assessing or reassessing, he can also, in addition, assess or reassess "any other income chargeable to tax which has escaped assessment and which may come to his notice subsequently in the course of proceedings under Section 147". 24. The precise question, thus requiring to be considered is, as to whether, the conjunctive word used, being "and", used between the expression "such income" and "also any other income chargeable to tax, which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under Section 147" is required to be given its due, or is required to be ignored, or is required to be interpreted as "or". Obviously because, if it is to be interpreted as "or", then the language would read as under:- "147. If the Assessing Officer has reason to beli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , or to put it in other words, in our opinion, if in the course of proceedings under Section 147, the Assessing Officer were to come to conclusion, that any income chargeable to tax, which, according to his "reason to believe", had escaped assessment for any assessment year, did not escape assessment, then, the mere fact, that the Assessing Officer entertained a reason to believe, albeit even a genuine reason to believe, would not continue to vest him with the jurisdiction, to subject to tax, any other income, chargeable to tax, which the Assessing Officer may find to have escaped assessment, and which may come to his notice subsequently, in the course of proceedings under Section 147. 29. It is a different story that for such other income, the Assessing Officer may have recourse to such other remedies, as may be available to him under law, but then, once it is found, that the income, regarding which he had "reason to believe" to have escaped assessment, is not found to have escaped assessment, the Assessing Officer is required to withhold his hands, at that only. 30. To this extent, we agree with the view expressed by the Punjab and Haryana High Court, in Atlas Cycle Industries' ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
