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TMI Blog1994 (3) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 143(1) on 22-7-1985 on a total income of Rs. 13,530 as returned by the assessee. For assessment year 1986-87, however, the return of income filed originally on 30-6-1986 admitting the total income of Rs. 11,274 was ignored and not considered as a valid return by the Assessing Officer on the ground that the income returned was below the taxable limit. Consequent on the search and detection of the seized documents as referred to above, the assessee filed fresh returns of income for the two years viz., assessment years 1985-86 and 1986-87 admitting additional income to the extent of Rs. 10,000 and Rs. 15,000 respectively. The figures of income returned as per these fresh returns were Rs. 22,860 and Rs. 26,274 for these two years respectively. These returns were filed on 23-1-1990. The returns were regularised by issue of notices under section 148 on 25-1-1990. In response to the said notices, the assessee stated that the returns already filed should be considered as returns filed in response to the notices under section 148. 2. 1 For assessment year 1987-88, however, the assessee filed the return of income originally on 23-1-1990 admitting an income of Rs. 34,520. This inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as obtained the imprimature of the court that this order has been made. The period of limitation is one intended for the benefit of the person whose property has been seized. It is open to him to waive it. We consider that to hold that the period of ninety days which is mentioned in section 132(5) is an immutable one would cause more injury to the citizen than to revenue. It is, therefore, open to the aggrieved person, as happened in this case, to agree to a fresh disposal of the case by the Income-tax Officer and thereby waive the period of limitation." The DR has also referred to the comments made in the famous treatise of Mulla on the Code of Civil Procedure at page 227 where the principle of waiver of a notice has been discussed. He has also drawn our attention to the discussions made at page 1190 of the book "The Law Practice of Income-tax" of Kanga Palkhivala, 8th edition, Volume I, on the same subject. His argument is that since the returns had already been filed and even subsequent to issue of notices u/s 148, the assessee did not file fresh returns but stuck to those returns filed already, it must be considered that the assessee had waived his right for getting a fre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce under section 148 in the instant cases will have to be decided in accordance with the amended provisions of section 148 only. Arguments put forward both by the DR as well as counsel for the assessee by quoting the newly inserted sub-section (5) of section 143, sub-section (2) of section 144 and also sub-section (2) of section 275 only support this contention. In these sub-sections, the Legislature thought it fit to make a clear mention that the provisions of the respective sections as they stood prior to the amendment shall apply to and in relation to any assessment for assessment year commencing on 1-4-1988 or earlier assessment year. Sub-section (2) of section 275 again made a clear mention that the provisions of that section shall apply to and in relation to any action initiated for the imposition of penalty on or before 31st of March 1989. But for these specific insertions, the pending proceedings even for the earlier years would also have been liable to be guided in accordance with the respective amended provisions. So far as section 148 is however concerned, no such special saving clause was inserted by the amending Act of 1987 so as to save all the assessments pertaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rate of 3% p.m. The Assessing Officer also cited certain instances from the seized documents about some transactions by way of giving loans on pawning of ornaments having been carried outside the books. In that view, the Assessing Officer, after taking into consideration that the assessee had admitted an additional income of Rs. 10,000 in the revised return for assessment year 1985-86 and also the fact that actually interest was being charged at the rate of 35% per annum, considered additional income of Rs. 30,000 by way unexplained investment in pawning business. For this year, the Assessing Officer also added back another amount of Rs. 17,857 by taking into consideration extra 1 1/2% interest per month on the closing balance of the girvi amount of Rs. 1,19,049. 7. 1 In assessment year 1986-87, the Assessing Officer stated that as per the seized document "A-6", investment of Rs. 65,130 was indicated. After taking into consideration that out of this amount, Rs. 30,000 had already been added back by him in assessment year 1985-86, he included the balance sum of Rs. 35,130 within the income of the assessee for this year by way of unexplained investment. Regarding extra interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tively are being ordered to be deleted by us. To that extent, the orders of the lower authorities are being reversed. 11. So far as, however, addition on account of extra interest is concerned, the assessee himself confessed before the Departmental authorities that actually he was charging interest on girvi items at the rate of 3% per month whereas he was accounting for the same in his books at the rate of 1 1/2% p.m. only. Although the learned counsel for the assessee has argued that interest at the rate of 3% per month was not being charged in all cases, yet in the face of such clear admission by the assessee and on account of non-availability of proper evidences to show in which cases lesser rate of interest was charged, we would like to confirm the action of the Assessing Officer in taking into consideration interest on girvi account at the rate of 3% p.m. At the same time again, we also find sufficient force in the argument of the DCIT(A) that credit must be given in respect of extra interest already declared by the assessee in the returns of income filed by him, over and above the figures shown in his books of account. We, therefore, uphold the reliefs allowed by the DCIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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