TMI Blog1986 (11) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Officer, the ITO rejected the figure of investment declared by the assessee and instead fixed it at Rs. 5,45,454. The difference in the cost accounted by the assessees and the cost determined by the ITO on the basis of Government Valuation Officer's report was equally added in the total incomes of Megha Nand and Vijay Prakash in the assessment year 1975-76. Aggrieved by the orders passed by the ITO, the two assessees filed appeal before the CIT (A). He marginally reduced the cost of construction fixed by the ITO. Still feeling aggrieved, the assessees filed appeals before the Income-tax Appellate Tribunal. ITA Nos. 3357 and 3356/Del/81 respectively filed by Megha Nand and Vijay Prakash relating to their assessments for the assessment year 1975-76 were decided by the Income-tax Appellate Tribunal by its consolidated order dated October 29, 1982. The Tribunal held after considering all the relevant facts regarding the period during which the construction of the property continued and the prevailing cost of construction that the unexplained investment was not as much as held by the AAC and that as far as the assessment year 1975-76 was concerned only a very small amount could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplementary assessments made in the cases of Megha Nand and Vijay Prakash in the assessment years 1973-74 and 1974-75, It was contended before the AAC that there was no failure or omission on the part of the assessee to disclose fully and truly all material facts necessary for their assessments and that if at all there was any escapement of income, it could not be attributed to any failure or omission on their part. It was further contended that the initiation of proceedings was illegal, without jurisdiction and barred by limitation. The AAC partly allowed the four appeals filed by the assessees (two each by Megha Nand and Vijay Prakash) relating to the supplementary assessments made on them for the assessment years 1973-74 and 1974-75. As far as the reopening of the assessments was concerned, the AAC held that that was in accordance with law and that the proceedings taken by the ITO were neither illegal nor barred by limitation. As far as the quantum of unexplained investment was concerned, the AAC reduced it after taking into account the order of the Income-tax Appellate Tribunal and the order of the CIT (A) in appeal No. 424/81-82 passed in respect of the penalty proceedings for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either any direction or a finding. According to him, the word "may" left the ITO free to take any action or not to take any action and, therefore, the effect of the Tribunal's order was that it did not give any positive finding or direction for the compliance by the ITO. According to him, the matter was left open to the ITO and that the ITO could in his discretion take any action or avoid it in respect of the assessment years 1973-74 and 1974-75 without in any way violating the findings given by the Income-tax appellate Tribunal in its order dated 29-10-1982. In support of his contentions, Mr. Malik has specifically placed reliance on the decision of the Hon'ble Supreme Court in Rajinder Nath v. CIT [1979] 120 ITR 14, on a decision of the Hon'ble Karnataka High Court in Consolidated Coffee Ltd. v. ITO [1985] 155 ITR 729 a decision of the Hon'ble Gujarat High Court reported in Tolaram Gangaram v. ITO [1985] 155 ITR 55. Some extracts of certain decisions of the Appellate Tribunal were also made a part of the paper book submitted by Shri Malik but the learned counsel did not refer to any one of those decisions in support of his contentions so far as the quantum of incomes from unexpl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be taken if 8 years have not elapsed from the end of the year in which the income escaped assessment. Similarly, where a case falls within the meaning of sec. 147(a) and the income which escaped assessment is likely to amount to Rs. 50,000 or more, action can be taken within a period of 16 years from the end of the assessment year in which the income escaped. In cases falling u/s 147(b), action can be taken within 4 years from the end of the assessment years in which the income escaped assessment. To these provisions prescribing limits for reopening of assessments and issuance of notices u/s. 148, exceptions have been provided in sec. 150 of the I. T. Act, 1961. This section is a non obstante section and it provides that a notice u/s. 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an appellate order or a revisional order. These overriding provisions of sec. 150(1) are subject to only one restriction which is spelt out in sub-sec. (2) of sec. 150. A very well settled principle of law has been incorporated in provisions of sec. 150(2) and it is that an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars that the plea had been raised successfully by the learned authorised counsel of the assessee who argued that appeal that the whole of unexplained investment was not assessable in the assessment year 1975-76 as a substantial part of investment which was found to be unexplained related to the assessment years 1973-74 and 1974-75. That plea or the question raised on the side of the assessee had been favourably decided and the Tribunal held that only to a certain extent the unexplained investment was assessable in the assessment year 1975-76 and that the rest of the unexplained investment was assessable in the assessment years 1973-74 and 1974-75. When the Tribunal said in the last sentence of paragraph 5 of its order that the ITO may take necessary steps in the earlier two years to bring to tax the unexplained investment in those years, it gave a positive finding. According to us, this was a finding which was a must and which had to be given by the Tribunal in order to decide the appeal for the assessment year 1975-76. Unless it had given a finding that part of the unexplained investment made by the two assessees, actually related to the assessment years 1973-74 and 1974-75 as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary action for assessing the unexplained investment in the assessment years 1973-74 and 1974-75. When we hold as above, we are not only supported by the decision of the Hon'ble Supreme Court in Rajinder Nath's case but also by the decisions in B. A. R. Abdual Rahman Saheb's case, Ambaji Traders (P.) Ltd.'s case, Sukhdayal Pahwa's case and N. Sastha's case. In the case of B. A. R. Abdul Rahman Saheb, the Hon'ble Andhra Pradesh High Court held that the effect of sec. 150 and sub-section (3) of sec. 153 read with Explanation 2 thereto is that if any income is deleted from the assessment by higher authority on the ground that it is not the income of that year, steps may be taken u/s. 147 to assess it as income of another year without any fetters of limitation as prescribed in sec. 149 and sec. 153. In that case, the AAC had while deciding the appeal for the assessment year 1959-60, held that the unexplained investment related to the assessment years 1956-57 and 2957-58. Pursuant to that order of the AAC, notices were issued by he ITO u/s. 148 on the 20th of March, 1969, and their Lordships the bar of limitation stood lifted in that case as per the provisions of sec. 150, section 153( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment under the head 'capital gains. The Tribunal held agreeing with the department's alternative contention that the amounts were liable to capital gains tax. Nowhere did the Tribunal give any finding that the assessment of capital gains be made in the assessment year 1963-64. In these circumstances, it was held by their Lordships of the Hon'ble Karnataka High Court that there was no finding or direction of the Income-tax Appellate Tribunal as could justifiably enable the Income-tax Authorities to reopen the assessment of the assessee for the assessment year 1963-64. In contrast with the abovementioned facts which prevailed i the case of Consolidated Coffee Ltd., the facts in the present case are that an absolutely necessary finding had been given by the Income-tax Appellate Tribunal in paragraph 5 of its order dated 27-10-1982. The Karnataka High Court decision relied upon by the learned authorised counsel of the assessee, therefore, does not go against the findings that we have given. 10. We may also incidentally mention here that the order of the Income-tax Appellate Tribunal dated.29-10-1982 had been accepted by the assessee and no reference application had been filed in res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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