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TMI Blog1977 (6) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 of the 5th and 6th Schedule to the Act for such special treatment as had been given in the original assessments. In the result, he withdrew the higher development rebate and also the relief under s.80-I earlier given. 3. In the appeals that the assessee preferred before the Appellate Asstt. Commissioner, the reassessments were challenged, not only as invalid in law, but also as unwarranted on merits. The Appellate Asstt. Commissioner upheld both the contentions of the assessee holding that the original assessments were reopened in these cases not on the basis of any subsequent information obtained by the Income-tax Officer and, therefore, in framing the reassessments, the Income-tax Officer had exceeded the jurisdiction vested in him under s.147(B) and also that the goods manufactured by the assessee were in fact classifiable under the head 'petro-chemicals' to well fall within item 18 of the 5th and 6th Schedule to the Act and, thus, the interference with the earlier assessment orders was bad, even on the identical grounds taken by the department in its memoranda: (1) The orders of the AAC is opposed to law and facts of the cases. (2) The AAC erred in annulling the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e general grounds, which are usually found in any memorandum of appeal, would entitle the appellant to attack the order under appeal on all fronts. 6. There was also the oral prayer then made by the learned departmental representative for leave to raise the contention against that particular finding of the Appellate Asstt. Commissioner as an additional ground. These appeals were filed on 15th Sep, 1976. There is no valid reason given why such a ground was not taken even then. By allowing the same at this stage would be depriving the assessee of a vested right in the form of the finding its favour given by the Appellate Asstt. Commissioner which, for the reason that it had not been appealed against till now, has become final, to its advantage. 7. That takes us to the other question whether the reassessment proceedings initiated in these cases are valid in law. As already mentioned, it is under the provisions of s.147(b) that the Income-tax Officer has reopened the original assessments in all these cases. It is well settled that before invoking the provisions of s.147(b), two conditions precedent must be satisfied viz. (i) the Income-tax Officer should have reason to believe th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and Vasisht Bhargav vs. ITO(2) it was argued that the directions and advice given by his superior officers for guidence constituted in the hands of the Income-tax Officer, who was partly an administrator and partly quasi-judicial authority, would constitute 'information' as contemplated in s. 147 (b). Even assuming this to be the correct position, the fact remains that the reasons for the reopening of the original assessments are necessarily to be recorded as compelled by sub-s. (2) of s. 148, as pointed out by the Patna High Court in C.N. Rajgaria vs. CIT(3). Though the communication of any such reason to hold the belief to the assessee may not be necessary but the same had to be disclosed to the Court. The Income-tax Officer must be confined to the recorded reason which constituted the basis on which he assumed jurisdiction. The question whether the Income-tax Officer had reason to believe or not is not a mere question of limitation only but is a question of jurisdiction. The reasons recorded under s. 148 (2) must be such as attaching the terms in which s. 147 (b) is set out so far as the assessee is concerned. It is, looking into these reason that a Court will have to decide w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r priority industry were urea formalism, phenol formaldehyde, phenol dehyde resin from urea and formaldehyde. It may thus be seen that there was nothing in the Board's circular concerning any of the articles manufactured by the assessee and for which relieves had been granted in the original assessments. The same can be said about the letter issued from the Commissioner's office. After reiterating what had been opined by the Board in its circular dated 31st Oct, 1974, the Commissioner in his letter observed as follows:— "It is quite likely that manufacturers of other products like detergents and synthetic rubber etc. Might have made a similar claim of priority industry and even succeeded in obtaining tax benefits not due to them. It is, therefore, necessary that all such cases also should be looked into and appropriate remedial action taken without delay." We fail to see how even this can be taken as having given any subsequent information to the Income-tax Officer regarding to the real nature and character of the resins manufactured by the assessee for him to come to the belief that none of them fell within item 18 5th and 6th schedule. However much the reasons for belief re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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