TMI Blog2011 (1) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... ening the assessment is the decision of Madhya Pradesh co-operative Bank Ltd. v. Addl. CIT [1996 (1) TMI 8 - SUPREME Court] which stands overruled by a subsequent decision rendered in the case of CIT v. Karnataka State Co-operative Apex Bank [2001 (8) TMI 9 - SUPREME Court]. In the circumstances, the very basis for reopening the assessment no longer survives. Hence, even on the merits the reopening of assessment is not sustainable. Decided in favor of the assessee - SCA NO 8036/97 - - - Dated:- 11-1-2011 - HARSHA DEVANI MS., ANTANI H. B., JJ. Judgment: Ms. Harsha Devani J.- 1. This petition under article 226 of the Constitution of India challenges the notice dated March 21, 1997 issued by the respondent herein under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year unless any income chargeable to tax has escaped assessment for any such assessment year: (i) by reason of failure on the part of the assessee to make a return under section 139, or (ii) there is failure on the part of the assessee to make a return in response to a notice issued under sub-section (1) of section 142 or section 148, or (iii) to disclose fully and truly all material facts necessary for his assessment for the assessment year. That in the present case admittedly clauses (i) and (ii) do not apply. Even clause (iii) cannot apply because there is no failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment. It is also averred in the petition that the return of income wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Madhya Pradesh Co-operative Bank Ltd. v. Addl. CIT [1996] 218 ITR 438 (SC). Attention was invited to a decision of this High Court in the case of CIT v. Bipin Vadilal [1999] 238 ITR 1022 (Guj), wherein it has been held that where the belief as to escapement of income chargeable to tax from assessment was not entertained by the Assessing Officer on the ground that there has been failure on the part of the asses-see to disclose truly and fully all material facts necessary for the assessment, but on the basis of information contained in the judgment, no proceedings can be initiated under section 148 of the Act after the expiry of four years from the end of the relevant assessment year. It was, accordingly, submitted that the reopening of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee to make a return under section 139 of the Act ; or (ii) there should be failure on the part of the assessee to make a return in response to the notice issued under sub-section (1) of section 142 or section 148 ; or (iii) to disclose fully and truly all material facts necessary for its assessment for the relevant assessment year. In the facts of the present case, it is an admitted position that there is no failure on the part of the assessee to make return under section 139 or to make a return in response to the notice issued under sub-section (1) or section 142 or section 148. In so far as the third condition is concerned, namely, failure on the part of the assessee to disclose fully and truly all material facts necessary for it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an-not be sustained. 8. Besides, the only ground for reopening the assessment is the decision of a two-judge Bench of the Supreme Court in the case of Madhya Pradesh co-operative Bank Ltd. v. Addl. CIT [1996] 218 ITR 438 (SC) which stands overruled by a subsequent decision rendered by a three-judge Bench of the Supreme Court in the case of CIT v. Karnataka State Co-operative Apex Bank [2001] 251 ITR 194 (SC). In the circumstances, the very basis for reopening the assessment no longer survives. Hence, even on the merits the reopening of assessment is not sustainable. 9. For the foregoing reasons, the petition succeeds and is accordingly allowed. The impugned notice dated March 21, 1997, issued under section 148 of the Act (annexure A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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