TMI Blog1995 (1) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... he Addl. District Judge in case No. 302 of 1983. Hence, the Assessing Officer observed that he had reasons to believe that on account of omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of income of Rs. 1,37,270 and Rs. 40,98,650, being the assessee having declared the compensation at Rs. 39,853 in his return filed on 29th Sept., 1988, chargeable to tax has escaped assessment for the assessment year in question. Accordingly a notice under s. 148 of the Act was issued to the assessee on13th Feb., 1991. The assessee submitted in his letter dt. 28th July, 1992, that as he has complied with the terms of notice under s. 148, the proceedings have become quasi judicial and requested that he might be intimated the reasons recorded for initiation of proceedings and materials relied upon to enable him to place further details or materials on record which might safeguard his interest from any further prejudice. It is stated in the order of assessment that the assessee was accordingly informed the reasons for issue of such notice under s. 148 of the Act and that in response thereto the assessee filed his reply dt.4th Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer for reopening the assessment, which he is bound to furnish being obligatory as per law. Reliance is also placed on the decision in the case of New Bank ofIndiavs. ITO, cited infra. At no stage the assessee has been confronted with the reasons recorded by the Assessing Officer. The paper contained in the paper book would reveal, namely at page 12 of the paper book, which is supposed to be the reasons for initiating the proceedings under s. 148, that is also, as is seen, not signed by the Assessing Officer. In this connection reliance is also placed on the decision in the case of Chhugamal Rajpal vs. S.P. Chaliha Ors., cited infra. It would be, therefore, crystal clear that reasons have to be necessarily recorded before initiating the proceedings under s. 148 of the Act and that too only in the file in which the proceedings have been initiated. Further, there is also no allegation made by the Assessing Officer any where to the effect that the assessee has failed to furnish the particulars fully and correctly. In this connection reliance is also placed on the decisions in the cases of Calcutta Discount Co. Ltd. vs. ITO as well as of Indian Oil Corpn. vs. ITO, both cited i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee to the CIT(A). The decision in the case of Rama Bai vs. CIT, citied infra, is also referred to in the said assessee's letters at page 71 of the paper book.. It is not only the case of enhancement but also calculation itself is wrong. The decision in the case of CIT vs. Anand Prasad Ors., cited infra, is also relied upon. In case calculation of capital gain is taxable, it is a long-term asset and further that interest on capital gains does not arise. 5. On the other hand, the learned representative for the Revenue countered that: When the assessee purchased it was a notified land subject to acquisition. It is incorrect to say that no reason was recorded by the Assessing Officer for reopening, i.e., for initiating proceedings under s. 148. On 29th Sept., 1989, for the asst. yr. 1988-89 the assessee declared income at Rs. 40,500 and there is a specific column in the return as Annexure 'E' which has not been filled up by the assessee. Computation of income and statement of affairs are unsigned. Page 2 of the paper book which is the capital account furnished as on31st March, 1988of the assessee, may be seen, in which the assessee has of course furnished the note. This retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . District Judge in connection with which pages 8 to 25 of the paper book may be seen, particularly at paras 6 and 7 thereof in pages 21 and 22 of the paper book. Just because the State has filed the appeal, it cannot be said that the dispute is substantial. Pages 39 to page 42 of the paper book may also be seen which is the petition filed before the High Court by the Union of India, particularly at item No. 4 in page 40 thereof. Sec. 45(5) refers to 'receipt' and not what ultimately became receivable. Reliance is also placed on the decision in the case of CIT vs. Oriental Rubber Works, cited infra. The additional compensation awarded by the Addl. District Judge is also withdrawn unconditionally. The right in appeal is only inchoate and not for the award and the right of theUnionto get the money is only inchoate and not of the assessee. There are conflicting decisions of the Tribunal on the point. The decision in the case of Harish Chandra Ors. vs. CIT, cited infra, is also relied upon. The instant case is more akin to the case of Shah Vrajlal Madhavji vs. CIT cited infra. Reliance is also had on the decision in the case of CIT vs. Rohtak Textile Mills Ltd., cited infra. The deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding the concerned pages of the paper book as well as the case laws relied upon by the parties respectively. In effect, to sum up, we may say that the stand of the assessee is as follows: The CIT(A) erred both in law and on facts in upholding the action of the Assessing Officer in completing the reassessment by taking recourse to s. 147/148 of the Act. The findings recorded by the CIT(A), according to the assessee, are based on misconception of facts and misinterpretation of the relevant provisions of law and thus the same are untenable. While upholding that the reassessment proceedings under s. 148 as having been validly initiated the CIT(A) has failed to appreciate, according to the assessee, that the entire information relating to the receipt of enhanced compensation was furnished by the assessee in the documents accompanying the return of income and the reassessment proceedings originally initiated were dropped by the Assessing Officer vide order sheet entry dt.31st Dec., 1992. The finding that the proceedings have not been dropped by the Assessing Officer has been arrived at on complete misconception of facts, as urged by the assessee. The proceedings initiated stood dropped ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugamal Rajpal vs. S.P. Chaliha Ors. (1971) 79 ITR 603 (SC); (c) Calcutta Discount Co. Ltd. vs. ITO (1961) 41 ITR 191 (SC); (d) Indian Oil Corpn. vs. ITO (1986) 58 CTR (SC) 83 : (1986) 159 ITR 956 (SC); (e) J.K. Synthetics Ltd. vs. ITO (1976) 105 ITR 864 (All) (f) J.K. Synthetics Ltd. vs. ITO; (g) AIR 1944 (Del) 88; (h) Smt. Madhu Jain vs. ITO (1993) Case Digest/ITAT 113 (dt.18th Jan., 1992) (Del); (i) Asstt. CIT vs. Devinder Prakash Jain ITA No. 2647 (Asst. yr. 1974-75 decided on16th Aug., 1991by Delhi Bench of the Tribunal.; (j) Jehangir P. Vazifdar vs. ITO (1992) 42 ITD 67 (Bom); (k) CIT vs. Hindustan Housing Land Development Trust Ltd. (1986) 58 CTR (SC) 179 : (1986) 161 ITR 524 (SC); (l) E.D. Sassoon Co. Ltd. vs. CIT (1954) 26 ITR 27 (SC); (m) Rama Bai vs. CIT (1990) 84 CTR (SC) 164 : (1990) 181 ITR 400 (SC); (n) CIT vs. Anand Prasad Ors. (1981) 128 ITR 388 (Del) (o) M.B. Abdulla vs. CIT (1990) 82 CTR (SC) 362 : (1990) 183 ITR 96 (SC); (p) Panchanan Hati vs. CIT (1979) 9 CTR (Cal) 228 : (1978) 115 ITR 336 (Cal); (q) Jamna Lal Kabra vs. ITO (1968) 69 ITR 461 (All); and (r) ITO vs. Lakhmani Mewal Das (1976) 103 ITR 437 (SC) 9. On the othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of compensation had escaped assessment. The word "accurate" used therein by the Assessing Officer is not mentioned in the relevant section but only the words "material facts". Further, neither it is alleged nor is it attributed by the Department that the note is not fully and truly disclosing but the assessee has given a sketchy account of the amount in the suspense account and in our opinion such comment of the Assessing Officer has no meaning at all. If a perusal of page 12 of the paper book is had it could be clearly seen without any ambiguity or doubt that the information furnished therein are not at all reasons for initiating proceedings under s. 148 even though it is captioned so. It simply states to the extent as to why capital gains may not be charged on the compensation of Rs. 40,98,650 received from the Addl. District Judge, Delhi order No. 302 of 1983 dt.21st Jan., 1980. By no stretch of imagination this could be co-related with the caption given to it, i.e., to say as reasons for initiating proceedings under s. 148. It simply states to explain. It does not even say as to who has to explain, rather as to whether the Assessing Officer himself. That apart above, the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this connection the decision in the case of Indian Oil Corpn. vs. ITO is also worthwhile to be noted wherein the Hon'ble Supreme Court has dealt with the decisions in the case of Hazi Amir Mohd. Mir Ahmed vs. CIT 1977 CTR (P H) 203 : (1977) 110 ITR 630 (P H) in which case at page 634 thereof referring to the Calcutta Discount Co's case, the learned Judge drew a distinction between primary facts and inferential facts and held that the duty of the assessee extended only to disclose the primary facts fully and truly. This view was also reiterated by the Hon'ble Supreme Court in ITO vs. Lakhmani Mewal Das and observed that it was the duty of the assessee to disclose fully and truly all primary facts and further that before action is taken under s. 147(a) there must be a reason to believe that there was failure or omission on the part of the assessee to disclose fully and truly all primary facts. In this connection the observations of the Hon'ble Supreme Court in the case of Sheo Nath Singh vs. AAC 1973 CTR (SC) 484 : (1972) 82 ITR 147 (SC) has also been referred to in the decision of the case in Hazi Amir Mohd. Mir Ahmed, cited supra. Therefore, in the instant case, in our opinion, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee before us that the words "Dy. CIT's approval" as well as "if approved" have been inserted into it perhaps as an afterthought on account of change of mind and such impression is also strengthened from the placement or the positioning of the said words as well as the impression of the ink with which the aforesaid quoted words are introduced being evidently different from the rest of the lines in the order sheet endorsement flowing fluently and differently from that of the aforesaid quoted words. It was further submitted that assuming that the aforesaid words were not introduced as an afterthought, it is not known as to whether the Assessing Officer sought any approval from the Dy. CIT and also granted accordingly or not and further that there is also no provision under the Act which authorised the Assessing Officer to seek approval of his proposal of dropping the proceedings initiated under s. 148 where he is otherwise satisfied that the assessee had disclosed all the material facts necessary for the purpose of making assessment. These submissions made on behalf of the assessee, cannot be lightly brushed aside. 10.3 Be that as it may, as has already been discussed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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