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Issues Involved:
1. Scope of ITO's powers after remand by the Tribunal. 2. Validity of notice u/s 148 during pending assessment proceedings. Summary: Issue 1: Scope of ITO's Powers After Remand by the Tribunal The Tribunal remanded the case to the ITO with specific directions to reassess the profit from the sale of property to Mr. Sandhu. The Tribunal's conclusions were: 1. The assessee carried out a business deal in purchasing and selling plots. 2. Only the sale to Mr. Sandhu for Rs. 40,000 was relevant for the year under consideration. 3. Profits should be calculated by estimating the cost price of the sold plot and excluding the cost price of the building and the plot retained by the assessee, along with considering development expenditure. 4. The Tribunal agreed with the AAC regarding the other two additions made by the ITO. The ITO, however, issued notices u/s 143(3) and 142(1) for additional inquiries beyond the Tribunal's directions. The court held that the ITO was not justified in expanding the scope of inquiry beyond the Tribunal's specific directions, emphasizing that the ITO must confine himself to the directions issued by the Tribunal. Issue 2: Validity of Notice u/s 148 During Pending Assessment Proceedings The ITO issued a notice u/s 148, claiming that the petitioner's income had escaped assessment. The court noted that income cannot be said to have escaped assessment if the assessment proceedings are still pending and have not yet resulted in a final order. The court referenced the Supreme Court's decision in Ghanshyamdas v. Regional Assistant Commr. of Sales Tax, which established that income has not escaped assessment if there are ongoing proceedings that have not yet culminated in a final assessment. Consequently, the court quashed the notice u/s 148 issued by the ITO. Conclusion: Both petitions were allowed with costs. The ITO was directed to adhere strictly to the Tribunal's directions in reassessing the profit from the sale to Mr. Sandhu, and the notice u/s 148 was quashed.
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