TMI Blog2005 (9) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... r of India, Central Vigilance Officer, New Delhi complaining about the conduct of the officer and the manner in which he was compelled to sign the blank papers, are available in second PB alongwith proof of despatch of such letters by registered post. No material is brought on record by the ld. D.R. that the said DDIT took any steps to negate the allegation made by the assessee. The stand of the assessee regarding forcefully signing certain blank papers in this regard gets corroborated from the fact that copy of the allegedly signed statement, which was supplied to the assessee at the instance of the Hon'ble High Court consisted of only six pages and was incomplete due to exhaustion of blank signed papers before it could be concluded. Non-availability of page 7 of the statement, which is admittedly a continued statement up to page 6, coincides with the assessee's version that few blank papers were got signed from the assessee by the DDIT and the assessee had not given any statement before him. In such circumstances, we are not inclined to give any weightage to the alleged statement of the assessee, on the basis of which the Assessing Officer has estimated the income. If thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The assessee furnished reply dated 30-4-2001 requesting the Assessing Officer to treat the revised return as a return in response to notice under section 148. Books of account were produced during the course of reassessment proceedings. The Assessing Officer, inter alia, taking assistance from the report and statement of the assessee recorded by the DDIT, computed total income for this year at Rs. 6,02,650. In the first appeal, the assessee challenged the initiation of reassessment proceedings but without any success. The ld. CIT(A) allowed nominal relief to the assessee by substantially retaining the additions. 3. First issue raised by the assessee through various grounds is the challenge to the legality of the issuance of notice under section 148 and consequential assessment. 4. At the outset, it was contended by the ld. A.R. that this case has a chequered history wherein the assessee had to approach the Hon'ble Jurisdictional High Court repeatedly. By referring to pages 1 and 2 of the PB, it was stated that on challenge to notice under section 148, the Hon'ble High Court allowed the Assessing Officer to proceed with the assessment but refrained from passing final orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned huge income not disclosed to the revenue. By referring to pages 41 to 46 of the PB being the alleged statement supplied to the assessee, it was put forth that this statement comprised of six pages which was unconcluded and since the blank papers got signed from the assessee got exhausted, the statement remained incomplete. The ld. D.R. was directed to produce the records and show us the alleged statement of the assessee in entirety. The case was adjourned and on the next date of hearing, the ld. D.R. placed on record a copy of the letter dated 18-8-2005 written by the concerned Income-tax Officer, Ward 1, Sriganganagar, intimating that only pages from SI. Nos. 1 to 6 of the assessee's statement were available and though at the end of page 6, it was mentioned as 'Contd. [7]', but no such page 7 was available. In the light of these facts the ld. A.R. submitted that the assessment order passed by the Assessing Officer was illegal and deserved to be quashed. Per contra, the ld. DR. strongly relied on the impugned order. Her further submissions were the reiteration of reasoning recorded by the lower authorities in support of their action. 5. We have heard the rival submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... believe that income chargeable to tax has escaped assessment. However, we find that this is no more a good law as having been reversed by the Hon'ble Supreme Court in the case of ITO v. Purushottam Das Bangur [1997] 224 ITR 362 holding that the Income-tax Officer was justified in reopening assessment under section 147(b) on the basis of letter written by the DDI (Inv.) to the jurisdictional IAC containing relevant facts of information without any further investigation. We find that apart from it, the Hon'ble Supreme Court in the case of ITO v. Selected Dalurband Coal Co. (P.) Ltd. [1996] 217 ITR 597 considered a situation in which a report was made by the Government department and notice issued under section 148 on the basis of such report was held to be validly issued. On the same line is another decision by the Hon'ble Delhi High Court in the case of Ratan Gupta v. Union of India [1998] 234 ITR 220 in which reassessment proceedings were initiated on receipt of a letter from ACIT (Inv.). It was held that initiation of reassessment proceedings on the basis of such letter was valid. All these decisions are authorities for the proposition that a report made available by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income furnished. The details of income returned admitted in his statement and deposits found in his bank accounts are as below: A.Y. Returned Income Income Admitted Deposits in Bank 1994-95 44,130 3,53,550 2,56,000 3. The assessee failed to explain the source of bank deposit. Having considered the entire facts brought on record as a result of investigation, the income chargeable to tax of Rs. 3,08,420 escaped assessment within the meaning of section 147 of the Income-tax Act for the assessment year 1994-95. Notice under section 148 of the Income-tax Act is issued. It is an undisputed position that the very foundation of the issuance of notice under section 148 is the reason to believe by the Assessing Officer that the income chargeable to tax has escaped assessment. Hence the edifice of the order passed under section 148 stands on the validity of the reasons to believe that income has escaped assessment vis-a-vis its nexus with the escaped income. Now we would examine the reasons recorded by the Assessing Officer, which have been emphatically assailed on behalf of the assessee. First para of the reasons refers to the TEP containing the allegation that the assessee owned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee was running school from which he had monthly income of Rs. 1 lakh. Position is similar on this count as well. Neither any addition has been made nor there is any evidence to show that the assessee was earning monthly income of Rs. 1 lakh from running of schools. 10. Para 2 of the reasons recorded by the Assessing Officer states that various allegations made against the assessee were found by the DDIT, Bikaner to be more or less correct. We are unable to trace out any basis for this statement in the reasons. That apart, we have analyzed each and every allegation made against the assessee separately but are helpless to find any addition having been made even on a single score. These facts indicate that neither the TEP nor the report of the DDIT could have led the Assessing Officer to believe that income chargeable to tax has escaped assessment. It is true that there is no bar on issuing notice under section 148 on the basis of DDI's report, but the condition is that such report should contain some solid basis indicating the escapement of income. It is not every and any suspicion that can justify the reassessment. If such a situation is allowed, it would open th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to his notice in the course of proceedings'. However, the important words prefixing are and also which succeed to any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income. On a plain reading of the section, it becomes abundantly clear that existence of income for which the Assessing Officer formed belief to have escaped assessment is pre-condition for including any other income chargeable to tax escaping assessment and coming to the notice of the Assessing Officer subsequently in the course of proceedings. Unless and until such income as giving reasons to form belief for escaping assessment continuous to exist and constitutes the subject-matter of assessment under section 147, no other income coming to the notice of the Assessing Officer during the course of proceedings can be roped in. The obvious reason is the distinction in the ambit of regular assessment under section 143(3) and reassessment under section 147. Whereas the former section empowers the Assessing Officer to make assessment when the return is filed under section 139 or in response to notice under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce or coercion does not support the standpoint of the person retracting. The burden to disprove the admission has to be discharged by placing cogent material and evidence on record, which leads the court to positively believe the latter version in preference to the original admission. The Hon'ble Andhra Pradesh High Court in [1953] Cri LJ 951 has held that the Court has to determine in the first instance whether a retracted confession is voluntary or has been improperly induced. If upon weighing of the circumstances, the prisoner's denial and probabilities it appears to the judge that the confession had been improperly induced, no matter how true it may be, he is bound to exclude it. 13. Adverting to the facts of the instant case, it is found that the DDIT, Bikaner sent his report in which the assessee had allegedly accepted having earned income from X-ray, clinic, lab tests, etc. which was not fully disclosed. It is the case of the assessee that the said DDIT got signed blank papers from him on which he himself recorded facts at the back of the assessee, which were totally incorrect. If it had been a mere assertion by the assessee, we would have not taken a minute to reje ..... X X X X Extracts X X X X X X X X Extracts X X X X
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