TMI Blog1999 (2) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... yed by the High Court on May 29, 1964, the order of stay being made on a writ petition filed by the assessee. The writ petition was dismissed, and the stay vacated, on May 17, 1974. The draft order under section 144B was made on March 10, 1978, and the final order of assessment was made on September 14, 1978. Assuming that the extended period of limitation of 180 days aforementioned was not available to the Revenue, the period for making the assessment had expired on March 19, 1978. In the second set of appeals, the assessment years involved are 1947-48 and 1948-49. The notices under section 148 were issued on March 24, 1964 and March 20, 1965. Subsequent proceedings were stayed by the High Court on February 23, 1968, and August 21, 1968, the orders of stay being made on writ petitions filed by the assessee. The writ petitions were dismissed, and stay vacated on April 27, 1978. The draft orders under section 144B were made on May 16, 1978 and July 31, 1978, and the final orders of assessment were made on September 6, 1978 and April 7, 1979. Assuming that the extended period of 180 days aforementioned was not available to the Revenue, the period for making the assessments had expire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder sections 143 and 144 and sub-section (2) deals with assessments under section 147. Explanation (1) to the section says that in computing the period of limitation for its purposes "(iv) the period (not exceeding one hundred and eighty days) commencing from the date on which the Income-tax Officer forwards the draft order under sub-section (1) of section 144B to the assessee and ending with the date on which the Income-tax Officer receives the directions from the Inspecting Assistant Commissioner under sub-section (4) of that section, or, in a case where no objections to the draft order are received from the assessee, a period of thirty days" shall be excluded. Section 144B reads thus : "144B. Reference to Inspecting Assistant Commissioner in certain cases.---(1) Notwithstanding anything contained in this Act, where, in an assessment to be made under sub-section (3) of section 143, the Income-tax Officer proposes to make any variation in the income or loss returned which is prejudicial to the assessee and the amount of such variation exceeds the amount fixed by the Board under sub-section (6), the Income-tax Officer shall, in the first instance, forward a draft of the proposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny assessment year to the Income-tax Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned (hereafter in sections 148 to 153 referred to as the relevant assessment year)." Section 148 reads thus : "148. Issue of notice where income has escaped assessment.---(1) Before making the assessment, reassessment or recomputation under section 147, the Income-tax Officer shall serve on the assessee a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 139 ; and the provisions of this Act shall, so far as may be, apply accordingly as i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inction between section 144B proceedings taken originally and section 144B proceedings taken pursuant to a notice under section 148. Before analysing the relevant provisions of the Act, reference must be made to two judgments of this court. In CIT v. Sun Engineering Works Pvt. Ltd. [1992] 198 ITR 297, it was held: "As a result of the aforesaid discussion, we find that, in proceedings under section 147 of the Act, the Income-tax Officer may bring to charge items of income which had escaped assessment other than or in addition to that item or items, which have led to the issuance to the notice under section 148 and where reassessment is made under section 147 in respect of income which has escaped tax, the Income-tax Officer's jurisdiction is confined to only such income which has escaped tax or has been underassessed and does not extend to revising, reopening or reconsidering the whole assessment or permitting the assessee to reagitate questions which had been decided in the original assessment proceedings...... Keeping in view the object and purpose of the proceedings under section 147 of the Act which are for the benefit of the Revenue and not an assessee, an assessee cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax Officer. If no objections are received, the Income-tax Officer may complete the assessment on the basis of the draft order. If, however, objections are received, the Income-tax Officer must forward the draft order together with the objections to the Inspecting Assistant Commissioner and the Inspecting Assistant Commissioner must, after considering the draft order, the objections and the record, issue such directions as he thinks fit for the guidance of the Income-tax Officer to enable him to complete the assessment, but no directions which are prejudicial to the assessee may be given before an opportunity is given to the assessee to be heard. The directions are binding on the Income-tax Officer. It is to enable this procedure to be carried out that Explanation 1(iv) to section 153 gives an extended period of 180 days to complete the assessment. By reason of section 148, after a notice thereunder has been served on the assessee containing the requirements which must be included in a notice under section 139(2), "the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section." What this implies is, in our vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... good reason to exclude it from the procedure to be followed subsequent to notice under section 148. It was pointed out by learned counsel for the assessees that no assessments could be reopened under section 147 by the issuance of a notice under section 148 unless sanction for such issuance had been obtained under section 151. The authorities empowered to grant such sanction under section 151 being higher in rank than an Inspecting Assistant Commissioner, it was submitted that it was incongruous that actual assessment or reassessment pursuant to such notice should be supervised by and be subject to the directions of only an Inspecting Assistant Commissioner. This was an indication that section 144B had no application to assessments and reassessments under section 147. We do not see any incongruity. The re-opening of an already completed assessment for the reason that the Income-tax Officer has reason to believe that income chargeable to tax has escaped assessment is a serious matter. The Act requires the Income-tax Officer to record his reasons for issuing a notice under section 148. The Act also requires that such notice shall not be issued unless the higher authorities mention ..... X X X X Extracts X X X X X X X X Extracts X X X X
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