TMI Blog2005 (11) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... ich have been admitted on the following questions of law: "(a) Whether, on the facts and circumstances of the case, the learned Tribunal was justified in confirming the action of the Assessing Officer (respondent No. 3) of initiating the proceedings under section 147/148 of the Act? (b) Whether, on the facts and circumstances of the case, notice under section 147 was bad in law and without jurisdiction? (c) Whether, on the facts and circumstances of the case, the provisions under section 147 without existence of conditions mentioned under clauses (a) and (b) of the said section and merely by applying clause (c) to Explanation 2 of that section justify the initiation of proceedings? (d) Whether, on the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment for both the years, the appellant-bank filed return protesting against the reopening, on the ground that it was contrary to law and also suffered impropriety in the factual matrix and wanting in jurisdiction. It was, in particular, pointed out that there was no ground for believing that any income had escaped assessment or any income had been subjected to excessive relief and all facts and sources of income had been truly and fully disclosed in the original return. It was also pointed out that exhaustive notes had been appended to the return in support of the facts and figures and the Assessing Officer had, therefore, full opportunity to frame the assessment on the basis of the material on record. The Assessing Officer, however, pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to frame the assessment and, therefore, the issuance of notices under section 148 of the Income-tax Act, in view of the provision of section 147 thereof, is fully proper, legal and justified. To appreciate the first contention of learned counsel for the assessee as the same relates to first three questions formulated and reproduced hereinabove, it would be appropriate to reproduce the provision of section 147 of the Income-tax Act obtaining during the relevant assessment year. Section 147 during the said period read as under: "Section 147. If- (a) the Income-tax Officer has reason to believe that, by reason of the omission or failure on the part of an assessee to make a return under section 139 for any assessment year to the Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eable to tax. Clause (b) contemplates the situation where though there has been no omission or failure as contemplated by clause (a), Income-tax Officer has received some information on the basis whereof he has reason to believe that income chargeable to tax has escaped assessment. In these two situations, the Assessing Officer can assess or reassess such income or recompute the loss or the depreciation allowance subject to adherence to sections 148 to 153. In order to bring the cases of underassessment, assessment at too low a rate and of excessive relief granted under the Act within the mischief of escaped assessment, the Explanation 1 appearing under section 147 includes such cases in cases of escaped assessment. Thus, by fiction the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s can be initiated against the assessee. There is no dispute that it was not on account of or as a consequence of information in his possession that the Assessing Officer harboured any reason to believe that income chargeable to tax had escaped assessment. From the letters sent by the Deputy Commissioner of Income-tax, dated September 25,1992, for the assessment year 1988-89 the reason for issuing the notices has been stated to be under: "During the course of the assessment proceedings for the assessment year 1989-90, and scrutiny of the appellate orders of the assessment years 1985-86 and 1986-87 it was noticed that while making the assessment for the assessment year 1988-89 at Rs. 9,34,23,990 on March 23, 1989 the additions/disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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