TMI Blog2007 (4) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... "We have considered the facts of the case and rival submissions. Prima facie, notice under section 143(2) has not been issued within the statutory period prescribed in proviso to section 143(2). The decisions of the Hon'ble ITAT, Delhi is that the procedure in reassessment proceeding is the same as in original assessment proceedings and, therefore, the mandatory provisions of section 143(2) will have to be adhered to. However, full records were not produced before us and we are not in a P9sition to give a categorical finding that the impugned notice was the first notice issued to the assessee and no other notice under section 143(2) was issued to the assessee prior to issuance of the impugned notice. Therefore, it will be in fitness of situation that this matter is restored to the file of the learned CIT(A) with a direction to examine the full facts and decide whether the impugned notice was barred by limitation or not. While arriving at the conclusion, he shall take into account the decision of Hon'ble ITAT in the case of Raj Kumar Chawla and any other case which may be brought to his notice during the course of hearing in the appeal. In view of this finding, it is not necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e become members of the 'AoP' by volition. There was also no material suggesting that there existed violation on the part of the alleged members to form and continue with the 'AoP'. In the absence of all this the status of 'AoP' cannot be thrusted on the assessee. The status of 'AoP' is challenged. Therefore, the assessment in the Status of 'AoP' is bad in law and it be annulled. 6. On the facts and in the circumstances of the case and in law there is no evidence nor any material to prove that the 'AoP' earned any income taxable under the Act. This is 'Sine qua non' for the formation and continuation of the AoP. There was also no consensus ad idem between the alleged Members of the AoP. In the absence of that the assessment in the status of AoP also is bad in law and it be annulled." 9. The facts of the case in brief are that the four members of a family-father and his three sons - S/Shri Peersaheb Kokani, Shahnawaz P. Kokani, Zakir P. Kokani and Hussain P. Kokani, were carrying on the business of dairy farming. A survey was conducted under section 133A of the Act at their business premises on 3-8-2000, and on the basis of the statement given by one of them - Shri Zakir P. Koka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b Kokani. - that there exist separate electric connections, water connections, borewells, electric motor etc. - that cattle belonging to individual members of the family could be identified with the help of badges affixed around their neck/ears. - that the employees received remuneration from the respective employer members and confirmation letters from the employees to this effect were filed. - that only a small quantity of milk was sold by one of the members against the milk card mentioned by the Assessing Officer in his order. - that the photographs of borewells, milk cans and the buffaloes wearing the badges, belonging to individual members were filed. 12. Shri Atul Pranay, the ld. DR placed reliance on the orders of the lower authorities. He vehemently argued saying that the order of the CIT(A) needed to be upheld. 13. We have considered the rival submissions in the light of material on record and precedents cited. Before proceeding further it appears necessary to examine the legal position under the Income-tax Act, 1961 with regard to the formation of an AoP. The section 4 of the Income-tax Act of 1961 is the charging section, which reads as under:- "(1) Where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent assessed them in the status of an AoP for all the six years in relation to income from property and income from dividends. 17. The Supreme Court held, in the above case, that for forming an AoP, the members of the association must join together for the purpose of producing an income. An AoP can be formed only when two or more individuals voluntarily combine together for a certain purpose. Hence volition on the part of the members of the association is an essential ingredient. In the above case the members had specifically stated themselves that they were no more functioning as AoP for assessment years 1959-60 to 1962-63. In the case of AoP it is always open to its members to withdraw from the same. No one can be compelled to continue as a member of an association. 18. Now we proceed to examine the facts of this case in the light of the legal position enumerated in the above paragraphs. The Assessing Officer and the CIT(A) were of the view that the assessee-AoP, engaged in the dairy business, was constituted by four members - father and his three sons as under:- (i) S/Shri Peersahib H. Kokani (ii) Shahnawaz P. Kokani (iii) Zakir P. Kokani and (iv) Hussainsahib P. Kok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted by the department. 21. Also, copies of documentary evidence have been filed to show that that registrations were available in the names of individual members under the Bombay Shops and Establishment Act, 1948, that the members of the family were enrolled under section 5(2) of Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975, that the members had separate electric connection provided by Maharashtra State Electricity Board, Nasik, that municipal taxes were paid separately by the members, that there existed separate electric connections, water connections, borewells, electric motors etc. 22. The decision of the lower authorities to hold that the members of the family formed an AoP is primarily based on the statement of Shri Zakir P. Kokani recorded during the survey on 3-8-2000. The reasons given by Assessing Officer for holding that an AoP existed are not supported by relevant material on record. What actually transpired at the time of survey is not borne out from records. For instance, the Assessing Officer has noted in his order that at the time of survey the buffaloes belonging to individual members were not identifiable, but the mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of section 282(2)(c) of the Act. But in a case where four persons assessed individually are held by the Assessing Officer to form an AoP, in that case the onus will be on the Assessing Officer to prove that an AoP existed and also the notice under section 148 will have to be served on all the members in order to validly assume jurisdiction under section 147 of the Act. In taking this view we are fortified by the decisions in the following cases: (i) Rama Devi Agarwalla v. CIT [1979] 117 ITR 256 (Cal.); (ii) CIT v. Smt. Saraswati Bai [1982] 137 ITR 656 (Punj. Har.) and (iii) Baijnath Hari Shanker v. CIT [1973] 91 ITR 208 (All.). 25.2 In the present case there is no material on record to show that the notices under section 148 were served on all the four members. In our opinion, on this ground alone the assessment orders become unsustainable and deserve to be quashed. 26. In view of the facts and circumstances of the case and the position of law as discussed in the above paragraphs, we are of the considered opinion that the decision of the lower authorities that there existed an AoP, constituted by the aforesaid the four family members - father and his thr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
