TMI Blog1984 (3) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... come. During the year of account, he also received some cheques from foreign countries towards purchase of a vehicle to be used in his ministry. The value of those cheques being Rs. 35,913.76 is excluded from his total income since the amount received is not for his maintenance. The taxable income of the assessee is computed as per particulars shown below : Rs. Property income : This income may be taken as per previous years 1,083.00 Profession : Total receipts from foreign countriestowards his maintenance as per particulars given in a separate sheet 6,808.98 ----------------------- 7,891.98 or Total income returned 7,890.00 " ----------------------- The assessee thereafter filed a revised return on 12-9-1977. The property income returned was as before. Having regard to the income from profession, however, it was shown at Rs. 11,092. Voluntary offerings (preaching) of Rs. 1,000 was shown under the head ' Income from other sources ', thus giving a total income of Rs. 13,180. The statement of case accompanying the aforesaid revised return was as under : The assessee is a Christian pastor running the institution ' Fellowship of Indigenous Gospel Churches, Kakinad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded reasons dated 24-3-1982. He stated that he had gone through the judgment of the Supreme Court in P. Krishna Menon's case and was of the view that remittances from abroad towards acquisition of the vehicle would be taxable income which has escaped assessment. He also recorded the finding that income from house property had not been fully taxed. Proceedings under section 147(a) of the Act were, therefore, initiated. 5. In compliance with the notice issued under section 148 of the Act, the assessee filed a return of income on 30-4-1982. The income from property was shown at Rs. 1,583 instead of Rs. 1,083, which was the income shown in the revised return filed earlier. In Part III the assessee made a mention that the assessee received gift of Rs. 31,630 from abroad towards purchase of a car which is purely in the nature of personal gift. This, it was stated, had been considered by the ITO at the time of original assessment and was, therefore, not shown as income. Accompanying the return was another statement of the case which was as under : " The assessee is a Christian pastor running the institution ' The Fellowship of Indigenous Gospel Churches, Kakinada '. During the year o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Rs. 31,631 out of the foreign remittances, which was for acquiring the vehicle. He also brought to tax additional property income of Rs. 500. 6. The assessee appealed to the AAC. The assessee contested the validity of the reopening. The assessee also sought to submit one letter each from (1) Shady Grove Baptist Church (dated 1-5-1980), (2) Christian Aid Mission (dated 8-9-1976), and (3) Highway Baptist Church Academy. In these letters it was stated that the cheques in question were given for purchasing car for the assessee's personal use. The assessee sought to rely on these letters to say that there was no nexus between the vocation and the receipts of the cheques and it was pleaded that the amount should be exempted. The ITO in certain written submissions before the AAC objected to the admission of the three letters which he termed as additional evidence. He also in particular urged that there was an earlier letter on record of the Shady Grove Baptist Church dated 9-8-1976 wherein it was stated that the cheque of 500 dollars (which was the cheque referred to in the letter) was for purchase of a car for use of the ministry. Therefore, the ITO contended the entire receipts we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the Supreme Court in the case of P. Krishna Menon. 9. The learned counsel for the assessee submitted that even if some property income may have escaped assessment and proceedings for reassessment were initiated and for such initiation, escapement of property income may have been one reason, it was not open to the ITO to examine every item ' where in view of the earlier findings there was no escapement of income '. The learned counsel elucidated his argument by submitting that the assessee had earlier placed on record all facts regarding the remittances and where the ITO had considered the same and had decided not to tax the said amount consciously and had completed the original assessment without including such amount, there was no escapement of income. If subsequently the ITO decided to bring the said amount to tax then it was only as a result of change of opinion and he was not subjecting to tax any amount which had escaped assessment. According to him, therefore, legally it was not permissible to bring to tax the amount of Rs. 31,631. Apart from it on merits, the learned counsel had relied heavily on the letters filed before the AAC from different parties and submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was omitted to be shown earlier. As long as there was an omission and facts in that regard were not given earlier regarding that item, which was one of the reasons recorded by the ITO, the provisions of section 147(a) were attracted. The decision of the Full Bench of the Andhra Pradesh High Court in the case of CWT v. Subakaran Gangabhishan [1980] 121 ITR 69 has observed with reference to analogous provisions of section 17 of the Wealth-tax Act, 1957, as under : " On a careful reading of the provisions of section 17(1) of the Act, we are of the view that once an assessment is validly reopened under section 17(1) no distinction can be made between the items falling under clause (a) and clause (b) thereof, that the reassessment proceeding wipes out the original assessment which results in obtaining the same position as it was prior to the completion of the original assessment and that the assessing authority would, consequently, have jurisdiction to assess the items falling under clause (a) as well as clause (b) of section 17(1) of the Act. The expression ' and may proceed to assess or reassess such net wealth, and the provisions of this Act shall, so far as may be, apply as i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 31,631 had escaped assessment. Therefore, we hold that the reopening of the assessment was valid. The examination by the ITO whether the amount of Rs. 31,631 could be taxed was also equally competent. 11. Coming to the facts, we have set out the statement of case which accompanied the original return and the revised return. In both these statements the assessee had categorically stated that he had received some cheques from foreign countries towards purchase of a vehicle ' to be used in his ministry '. This averment in the statement of case accompanying the two returns stood corroborated by the accompanying letter dated 9-8-1976 of the Shady Grove Baptist Church which referred to a particular cheque for 500 dollars which was to be utilised for the purchase of a car ' to be used in the ministry '. 12. It was only in compliance with the notice under section 148, when the return was filed, that in the accompanying statement of case the assessee took the stand that the amount received for the purchase of the car was purely in the nature of personal gift. No doubt certain other letters which were filed before the AAC dated 1-5-1980 and 8-9-1976 and that from the Highway Bapti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of P.S. Chelladurai the Madras High Court had upheld the stand of the ITO that where an assessee who received remittances from abroad and utilised a greater part of it for running orphanages, Sunday classes and Bible classes and a part of the money for the maintenance and upkeep of the assessee and his family, that portion out of which the family was maintained could be considered as his income. The observations of the Madras High Court in the case of P.S. Chelladurai in this regard were : " We are, therefore, satisfied in this case that quite within the proprieties of his occupation, the assessee has, if it is the right expression to use, helped himself from the funds of the charity. Having regard to the nature of the occupation and the fact that all other avenues of income earning had been hermetically sealed off for him, by his own choice, the assessee must be regarded as having earned the income to the extent at least of the unquestioned expenditure which he meted out for himself and the members of his family. At the end of the discussion we must hasten to point out that we are not breaking new ground in income-tax law in whatever we have said in the foregoing paragra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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