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2009 (10) TMI 233 - HIGH COURT OF KERALAReassessment- Limitation- the partnership firm of which the respondent-assessees were partners, did not maintain any books of account and, therefore, the original assessments the firm itself were completed on estimation basis. Following the said assessments of the firm, income was assessed in the hands of the partners. However, the Department later found that the firm had furnished balance- sheets for the period ended December 31, 1985, and March 31, 1993, before the bank which disclosed massive credit balances in the current and capital accounts of the partners. Based on this and other information, the assessments of the firm were reopened and reassessments were completed under section 147 of the Income-tax Act, 1961. Following the information collected from the firm’s accounts and assessments later completed, the assessments of the partners were also reopened and completed under section 147 of the Income-tax Act. The Commissioner (Appeals) cancelled the reassessment on the ground of limitation and this was upheld by the Tribunal. Held that- (i) according to Circular No. 5 of 2008 in respect of composite order under appeal, if the tax involved at least in one of the assessment years in above the limit, then the department is entitled to maintain the appeal for all the years. (ii) that the assessee had not disclosed all material facts required for completion of their original assessments. In fact, admittedly, the income of the assesee was in the form of withdrawal from the firm of which they were partners, which admittedly carried on business without maintaining books of accounts. The reassessment completed under section 147 of the Income Tax Act, 1961, in the case of assessee were within time.
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