TMI Blog2004 (10) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... eafter notices under section 148 were issued for assessment year 1996-97 on 22-5-2001 and for assessment year 1997-98 on 14-5-2001. The reasons have been recorded for reopening, which have been discussed in Para-3.2 at Page 5 of the order of the ld. CIT(A). The appellant had filed returns under section 148 withdrawing the excess claim of interest paid to Rajasthan Financial Corporation (RFC). The reasons recorded were disclosed to the appellant vide Assessing Officer's Office Letter No. 1591 dated 10-2-2003. The ld. CIT(A) had given the finding at Page-6 Para 3.3 of his order. The point regarding furnishing of the reasons was discussed with the ld. A/R by the ld. CIT(A) with reference to the reasons recorded-by the Assessing Officer and it was observed by the ld. CIT(A) that whatever reasons have been recorded, the escaped income in respect of those reasons have already been disclosed by the appellant. Therefore, having regard to the facts of the case, we are of the opinion that the reasons have properly been recorded and copies of reasons recorded had also been supplied to the assessee. Thus, we find that the order of the ld. CIT(A) is not laconic in any manner. The order of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the Hon'ble Calcutta High Court had quashed the enquiry notice issued under section 133(6) by the Assessing Officer on the basis of writ filed by the assessee. Therefore, it is clear that such an action on the part of the Assessing Officer can be challenged only through writ. The ld. A/R had submitted that the information was not called for with the prior approval of the Commissioner. We are of the opinion that even if the information is called for in contravention of the legal provisions, the material obtained thereby can still be used by the Department against the person concerned in the light of the decision of the Apex Court in the case of Pooran Mal v. Director of Inspection (Investigation) [1974] 93 ITR 505 and Dr. Pratap Singh v. Director of Enforcement [1985] 155 ITR 166. No such plea has been raised before the lower authorities. Therefore, this ground raised for the first time before us by the appellant is hereby dismissed. 10. The Ground No. 2, common in both the appeals filed by the assessee, is regarding confirmation of disallowance of depreciation claimed through returns filed in response to notices under section 148. 11. The Assessing Officer had allowed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed to be so set off because in the original assessment proceedings, no "set off" was claimed or permitted and the original assessment had acquired finality when the appeal against the order of assessment failed before the Appellate Assistant Commissioner and the assessee took no further steps to agitate the issue." 14. We find that the ld. D/R (IT) had rightly placed reliance on the judgment of the Apex Court in the case of Chettinad Corpn. (P.) Ltd. wherein it was held that reopening an assessment could only be for the benefit of the Revenue and all items of disallowance or relief claimed by the assessee which are not relevant to the items which are the subject-matter of the enquiry during reassessment cannot be considered at the stage of reassessment. 15. The ld. A/R had placed reliance on the decision in the case of Mahendra Mills. From the perusal of the contention raised by the ld. A/R, it is evident that this judgment of the Apex Court helps the Revenue rather than helping the appellant. 16. In the case before us, depreciation of Rs. 9,840 for assessment year 1996-97 and Rs. 14,890 for assessment year 1997-98 was claimed in the original returns. However, in the retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose, he discussed all the decisions for and against the issue whether the whole of the assessment is reopened or not. Ultimately, he relied on the following case laws: (a) ITO v. Mewalal Dwarka Prasad [1989] 176 ITR 529 (SC) (b) ITO v. K.L. Srihari [2001] 250 ITR 193 (SC) (c) CIT v. Indian Rare Earth Ltd. [1990] 181 ITR 22 (Bom.) (d) CWT v. Sandeep Jajodia [2004] 268 ITR 494 (Cal.) (e) CWT v. D.R. Vadera [2000] 246 ITR 348 (Delhi) 24. The ld. D/R (IT) also contended that when the returns are processed under section 143(1)(a), it cannot be said that the matter has attained finality. For this purpose, he relied on the decisions in the case of Pradeep Kumar Har Saran Lal v. Assessing Officer [1998] 229 ITR 46 (All.) and Jorawar Singh Baid v. CIT [1992] 198 ITR 47 (Cal.). Ultimately, he submitted that the Assessing Officer can make even trading addition while making reassessment in pursuance of the notices issued under section 148 of the Income-tax Act. The ld. CIT(A) erred in deleting the additions, thus, made by the Assessing Officer. 25. The ld. A/R submitted that the declared trading results had been accepted by the Assessing Officer in the original assessment pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee can seek reopening of the whole assessment and claim credit in respect of items finally concluded in the original assessment." 29. It was held in the case of Vipan Khanna that in view of the amendment made in section 147 of the Act with effect from April 1, 1989, the Assessing Officer could not only assess or reassess the escaped income in respect of which proceedings under section 147 have been initiated but also any other income chargeable to tax which may have escaped assessment and which comes to his knowledge subsequently in the course of such proceedings. 30. We do not agree with the contention of the ld. D/R that the whole of the assessment can be made de novo. The reassessment can be made only on the items mentioned above in this order. The ld. D/R had relied upon the decision of Hon'ble Apex Court in the case of Mewalal Dwarka Prasad where it was held that it was not for the High Court to examine the validity of the notice under section 148 in regard to two of the items of cash credits if it came to the conclusion that the notice was valid at least in respect of the remaining items. This does not help the Revenue. We are of the opinion that the ratio of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y qua items of under assessment or escaped income. The finality of assessment proceedings on other issues remains undisturbed. 33. The ld. D/R relied upon the cases of Pradeep Kumar Har Saran Lal and Jorawar Singh Baid's and submitted that the scope for initiating reassessment proceedings in an assessment made under section 143(1)(a) is wider than in an assessment under section 143(2), read with section 143(3). The power that can be exercised under section 143(2) to correct the assessment made under section 143(1) does not exclude the power of the Assessing Officer to reopen the assessment under section 147 if the ingredients of section 147 are satisfied. 34. We find that the matter regarding trading results had attained finality when the Assessing Officer could not issue notice under section 143(2) for scrutiny of return filed within the stipulated period. When the stipulated period for issue of notice under section 143(2) had already expired, the matter has attained finality as held in the cases of Vipan Khanna and M.P. Iron Traders. 35. After appraisal of the facts of the case, we find that the matter regarding declaration of trading results had attained finality when the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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