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TMI Blog2011 (12) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... accosted by the Sub Inspector of Police, Koduvally while on night patrol duty and unaccounted cash amounting to Rs. 1,74,000/- was seized from him. The seized amount was deposited with the Judicial First Class Magistrate-1, Thamarasserry which, later, was released to the petitioner-assessee after setting apart 33% towards income tax dues. Thereafter notice under Section 142(1) was issued to the petitioner and since no return was filed, a letter was issued communicating the proposal to complete the assessment ex parte. In response to the said communication, the petitioner-assessee filed a reply, pursuant to which a statement was recorded from him, wherein the petitioner furnished some materials to explain the source, which was disbelieved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y both sides. Admittedly notice was issued under Section 142(1) of the Act and the assessment has to be completed in such cases under Section 143 of the Act. Section 174, in my opinion, is a distinct assessment proceeding contemplated against persons leaving India to defeat the statutory charge of income tax created under sub-section (4) of the Act. The Section creates a charge of income tax on the income of the assessment year itself and postulates an assessment to be made during the current assessment year as distinguished from the charge of income tax created as per sub-section (4) "in respect of the total income of the previous year of every person". Any assessment under Section 174 necessarily requires a notice to be issued under sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with a notice under Section 174(4) and even in the order Exhibit P1 there is no whisper about the assessee-petitioner's likelihood of attempting to alienate his assets for the purpose of avoiding tax. Evidently by invoking powers under Section 175 read with Section 174(3) the assessing officer has invoked special provisions for assessment invoking the non obstante clause to create charge of income tax on the income of the assessee not liable to charge under sub-section (4) of the Act. There is no doubt that the assessing officer if having sufficient materials and on a prima facie consideration, can invoke such powers under Section 175 as the Section itself provides a charge of income-tax on such income of the current assessment year. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seized from the assessee, which may not be permissible, since as noticed earlier there is no charge on the income of the current year. However, at this distance of time, I am of the opinion that no separate notice be issued and the said notice issued under Section 142(1) can be proceeded with as one issued in the assessment year 2004-05 for assessing the income of the previous year 2003-04 in which the seizure was made. The assessment shall be completed in accordance with law as expeditiously as possible, at any rate, within a period of three months from the date of receipt of a copy of this judgment. The petitioner shall co-operate with the assessment proceedings and shall produce a copy of this judgment before the assessing officer within ..... X X X X Extracts X X X X X X X X Extracts X X X X
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