TMI Blog2006 (5) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has not produced any evidence to show that return of income was filed in response to notice u/s 148 dated 24-2-1993. Thus inaction on the part of Assessing Officer to complete assessment u/s 144 in the absence of return of income would not amount to forming of an opinion, that there was no escapement of income. When assessee has not filed a return of income, it is not correct on the part of assessee to say that Assessing Officer has formed an opinion in the reassessment proceedings initiated by issue of notice u/s 148 dated 24-2-1993. The Assessing Officer can issue any number of notices u/s 148 provided the conditions stipulated in. section 147 are satisfied and the same is within the period specified u/s 149 read with section 151. However, if an assessment is pending either by way of original assessment or by way of reassessment proceedings, the Assessing Officer cannot issue notice u/s 148. But if no proceedings are pending either by way of original assessment or by way of reassessment, he can issue notice u/s 148 within the time allowed under the Act. On the date of issue of second notice no reassessment proceedings were pending. The reassessment proceeding based on n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 24-2-1993. No action thereafter was taken by him. Again notice under section 148 was issued on 13-10-1995 for same reasons after obtaining approval of Addl. Commissioner of Income-tax. The Assessing Officer the basis of notice issued under section 148 dated 13-10-1995, completed assessment under section 143(3)/147 on 31-3-1997. 3. The matter was agitated before ld. CIT(A) on the ground that reassessment made was time-barred by limitation as Assessing Officer did not make any assessment with reference to notice issued under section 148 on 24-2-1993. The consequent assessment should have been completed by 31-3-1995. No assessment was, however, made by 31-3-1995. The Assessing Officer issued a fresh notice under section 148 on 13-10-1995. This notice was bad in law as it was based on the same ground i.e. provision of warranty receipts not included in the sale. Consequently the assessment completed on the basis of invalid notice was bad in law. Before ld. CIT(A) the Assessing Officer submitted that the assessee's case was covered under section 149(1)(iii) and time was available up to ten years from the end of the relevant assessment year. That a notice was issued on 24-2-1993 and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice under section 148 dated 24-2-1993 in support of her contention that notice was issued and served on assessee. However, when a query was raised by the Bench as to whether any return of income was filed in response notice under section 148, Mrs. Anita Sumanth, the ld. AR of the assessee failed to answer the query. No evidence was filed to prove that return of income was filed in response to notice issued under section 148 on 24-2-1993. Further it is seen from order sheet that Assessing Officer did not take any action in the matter probably due to oversight. After issue of notice under section 148, when no return is filed by the assessee, the Assessing Officer could have issued notice under section 142(1) requiring the assessee to file return of income. No such action was taken. Ultimately the reassessment proceedings initiated got barred by limitation on 31-3-1995. 7. The assessee has not produced any evidence to show that return of income was filed in response to notice under section 148 dated 24-2-1993. Thus inaction on the part of Assessing Officer to complete assessment under section 144 in the absence of return of income would not amount to forming of an opinion, that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d appreciation of facts is necessary. This lacks in the case before us. In our view it is not a case of change of opinion. 8. Under law there is no bar to issue second notice. The case is to be examined whether conditions for reopening of assessment on second occasion did exist or not. Once conditions precedent is satisfied, the Assessing Officer will be justified in initiating reassessment proceeding within the time-limit specified under section 149. There is no restriction as to number of proceedings that can be taken to reopen the assessment by way of reassessment. The Assessing Officer can issue any number of notices under section 148 provided the conditions stipulated in. section 147 are satisfied and the same is within the period specified under section 149 read with section 151. However, if an assessment is pending either by way of original assessment or by way of reassessment proceedings, the Assessing Officer cannot issue notice under section 148. But if no proceedings are pending either by way of original assessment or by way of reassessment, he can issue notice under section 148 within the time allowed under the Act. On the date of issue of second notice no reassessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This principle was laid down by Hon'ble Supreme Court in the case of Indian Molasses Co. Ltd v. CIT [1959] 37 ITR 66. 12. There is a distinction between an actual liability in praesenti and liability de futuro which, for time being, is contingent. The former is deductible but not the later. However, Hon'ble Supreme Court in the case of Bharat Earth Movers Ltd held that if a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should also be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied, the liability is not a contingent one. The liability is in praesenti though it will be discharged at a future date. It does not make any difference if the future date on which the liability shall have to be discharged is not certain. In the case before us the assessee could not produce any basis on which the provision for warranty was determined. The actual expenditure incurred was at Rs. 2,80,131 as against the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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