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TMI Blog1981 (12) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... on the relevant dates with the desired date. 5. That the assessment order is not self-speaking and is based on the previous assessment which has since been annulled by the AAC on 23rd June, 1978. No reassessment can again be framed under law on the same grounds." 2. From mere reading of the grounds, it gives an idea that the issue is complicated but sum and substance of the grounds is that the assessment framed by the ITO under s. 144 and set aside by the AAC, should have been annulled and it is only in that view that all these grounds are raised and many more contentions in the course of arguments by the ld. counsel for the assessee Sh. D.K. Gupta were raised before us at the time of hearing. 3. Before we deal with the issue, detailing out of the facts giving rise to the dispute will not be only of assistance but the issue would be better appreciated by that. 4. For the first time, the assessee filed her return for asst. yr. 1971-72 showing rental income from godowns situated in Amloh. On 27th March, 1974, the ITO not only impounded the rokar-khata for asst. yr.1971-72 but also for 1970-71 and on the same date asked the assessee to explain and furnish proof of : "(i) F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, therefore, to its assessability in the hands of her brother Biru Mal, I make a protective assessment on the assessee after including unexplained investment at Rs. 25,000." 6. When the matter came before the AAC, the assessment order was annulled as the reasons for initiating proceedings under s. 147(a) were not recorded. 7. The ITO did not keep silent after that and reinitiated proceedings, again under s.147(a) with the following reasons for his belief that the income had escaped assessment: "Smt. Jalwanti Devi invested Rs. 40,000 (In two years) in the construction of two godowns and six shops in Amloh. She has no known source of income to explain this investment by her. She did not file return of income for the asst. yr. 1970-71 not notice under s. 139(2) was issued. Therefore, the income of Rs. 25,000 for the asst. yr. 1970-71 has escaped assessment, due to non-filing of return. I have, therefore, reasons to believe that for the failure on the part of the assessee to file the return of income for the asst. yr. 1970-71, income of Rs. 25,000 escaped assessment. Your kind approval is solicited to initiate proceedings under s. 147(a)." On the said notice under s. 148 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee and the revenue on their respective paper books originally and also those which were placed in response to requirement of the same by the order of the ld. Member announced on 7th July, 1981 (in the open court), when the instant case was posted before Single Member Bench. He vehemently argued that in the reasons which were never put to him, the mention of six shops and two godowns is made which nowhere existed. He also took us through the statement of the lady assessee in details and challenged that nowhere a single question regarding 'Istri Dhan' was put to her which was shown to be the source of her investment as per correspondence places on the assessee's compilation. He drew our attention to page 19 of the paper book in which the assessee's contentions were detailed in the form of a letter and submitted that even if anything was damaging in the assessee's statements which were recorded earlier were annulled with the annulment of the earlier assessment framed under s. 147(a). He submitted that the assessment was framed on 1st Mar, 1980 and the ITO declined to confront the assessee with the reasons for reopening on 5th Feb, 1981 and framed the assessment only on the basis th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read as a whole. Even if it is tentative belief it has to be related to material. The assessee was a benami of one Biru Mal, her brother, according to the ITO, but it was never put to her. According to him, reliance of the ld. Deptl. Rep. on the case cited by him was misplaced. He submitted that no second hearing should have been granted to the ITO by the AAC who set aside the case. 14. After taking into consideration the rival submissions and perusing the facts on record which we have summarised above by able assistance of both the parties, and looking into record, we are unable to confirm, the order of the AAC in setting aside the assessment. When we read the finding of the AAC himself which also we have extracted and placed above saying that: "..................The appellant had every right to be confronted with the material in the possession of the ITO " denial of the same being made to the assessee or refusal to give the reasons, was enough for the annullment of the assessment. There is no controversy about the facts stated above, which may be briefly summarised, that the assessee filed her voluntary return for 1971-72 showing rental income from the said properties and in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prabhudayal Agarwal has reported in the form of short notes that : "It is not permissible for the income-tax authorities to reopen the assessment without disclosing the material which had led them to the conclusion that there was a case of escaped assessment. Though that was only a petition regarding s. 148 in which the question posed was "whether notice issued under s. 148 for re-assessment is invalid if no reasons for reopening of the assessment is furnished despite request from the assessee. Their Lordships replied in the affirmative, i.e. "Yes, notice under s. 148 for reassessment is invalid if no reasons for reopening of the assessment is furnished despite request from the assessee". " We have for our guidance even the Punjab and Haryana High Court's decision in the case of Sham Lal wherein the ITO subjected the assessee to tax in respect of certain amounts in his income on the basis that he was a partner in a firm. On appeal, the AAC annulled the assessments because he found that the assessee was not a partner in the firm and the ITO had relied on certain material, which had not been put to the assessee, for coming to the conclusion that he was a partner. The Tribunal while ..... X X X X Extracts X X X X X X X X Extracts X X X X
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