TMI Blog2012 (8) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... aking the assessment orders for the A.Ys. 1981-1982 and 1982-1983 recollected Note 16 to its Accounts for year ending 31.12.1982 included in the return of income for the A.Y. 1983-1984. Thus, reassessment proceedings for the AYs 1981-1982 and 1982-1983 are upheld. AY 83-84 - Held that:- It is not even suggested that the AO was aware of the provisions of the Requisition Act, 1952 when he made the original assessment orders. In any event, Note 16 of the Accounts did not state that the payment was made pursuant to the provisions of the Requisition Act, 1952. It merely referred to the fact of the enhancement of compensation. This was therefore, further material which the AO was informed about only subsequently. The possession of such information subsequently justified the AO to have reason to believe that the income chargeable to tax had escaped assessment. Reopening of AY 83-84 upheld - Decided against assessee - INCOME TAX REFERENCE NO.2 OF 1995 - - - Dated:- 30-7-2012 - S.J. VAZIFDAR AND M.S. SANKLECHA, JJ. Mr.Percy Pardiwalla, Senior Counsel with Mr.Nishant Thakkar and Mr.Rajesh Poojary i/b M/s.Mulla Mulla C. B. Co. for the Applicant. Mr.Suresh Kumar for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional compensation as above upto 31st December, 1982 was received in March, 1983 from the Estate Manager, Government of India, which amount will be accounted for in the Company's accounts for the year ending 31st December, 1983 . 6. The assessment orders under section 143(3) were made for the A.Ys. 1981-1982, 1982-1983 and 1983-1984 on 20.7.1984, 30.6.1984 and 24.7.1984 respectively. The present reference is in respect of these three assessment years. The assessments were completed considering the rented income from the said property to be the original compensation of Rs.3618/- per month and not the revised compensation of Rs.19,269/- per month. 7. It appears that the Assessing Officer by a letter dated 30.5.1988 made enquiries with the Government of India in regard to the enhanced compensation being paid. The letter is not on record. There is however, a reference to it in a letter dated 19.1.1989 in reply to it from the Estate Manager to the Income Tax Officer. The letter dated 19.1.1989 reads as under :- I am to refer to your letter No. Com. Cir.IV(3)/88-89 dated 30th May, 1988 on the above subject and to state the matter was referred to Directorate of Estates, Nirman Bha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her words, the entire arrears were not even brought to tax. 11. Two contentions were raised before us. The first pertains to the question framed by the Tribunal in the reference which we have set out earlier. Mr.Pardiwalla also sought to challenge the order on the ground that the attempt to tax the assessee for the arrears during the said assessment years was contrary to law inter-alia on the ground that the arrears had not accrued in favour of the applicant during the said years for the reason that the Government of India had only on 22.3.1983 agreed to pay the enhanced compensation. 12. It is, therefore, necessary first to consider whether it is permissible for the applicant to urge the second contention in this reference, although a question to this effect has not been framed in the reference. 13. Mr.Pardiwalla relied upon paragraph 10 of the reference to contend that the reference would entitle him to raise the second issue as well. 14. A reading of paragraph 10 by itself may well support the submission. The error in the submission however, arises on account of reading paragraph 10 in isolation. The Statement of Case, read as a whole, makes it clear that it pertains onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 10 of the reference establishes that the scope of the reference must be restricted only to the question framed. 17. Thus although we heard Mr.Pardiwalla on the second question as well, we are afraid, it is not permissible to consider the same in this reference. 18. This brings us to the question referred by the Tribunal to this Court. Mr.Pardiwalla's main contention was based on the said Note 16 to the Accounts included in the return for A.Y. 1983-1984 on 29.7.1983. He submitted that all the facts were therefore, before the AO when he made the original assessment order under section 143(3) for A.Ys. 1981-1982, 1982-1983 and 1983-1984 on 20.7.1984, 30.6.1984 and 24.7.1984 respectively. He submitted that there is no question therefore, of the AO having reason to believe that the income chargeable to tax had escaped assessment as a consequence of the information in his possession . 19. Firstly, this contention cannot be applied to the A.Ys. 1981-1982 and 1982-1983. At the highest, it would be relevant only in respect of the A.Y. 1983-1984. This is for the reason that Note 16 to the Accounts was included only in the return for the A.Y. 1983- 1984. 20. To this, Mr.Pardiwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1982-1983 are concerned, the reference must be answered against the applicant / assessee. 24. This leaves for consideration the validity of the reassessment proceedings in respect of A.Y. 1983-1984. We will presume that the AO had noticed and considered the said Note 16 to the Accounts included in the applicant's return of income. That by itself however, would not lead to a conclusion that the requirements of section 147(b) were absent. 25. Firstly, it is important to note that despite the categorical statement in Note 16 to the Accounts that the applicant would account for the said arrears of Rs.14,68,172/- in its accounts for the year ending 31.12.1983, it did not do so. The failure to so account for the amount in the accounts for the year ending 31.12.1983 could only have come to the AO's notice subsequently. Whether or not the applicant was bound under the provisions of the Income Tax Act to account for the same in the subsequent year is another matter altogether. The failure to comply with the assurance to the AO is sufficient to sustain the proceedings under section 147(b). It is relevant information which came to his possession subsequently. 26. Further the Estate Man ..... X X X X Extracts X X X X X X X X Extracts X X X X
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