TMI Blog2009 (12) TMI 1005X X X X Extracts X X X X X X X X Extracts X X X X ..... rable Tribunal in the case of assessee. (iii) The assessment order may please be cancelled. 3. During hearing of these appeals, we have heard Shri S.S. Deshpande, learned counsel for the assessee, and Mrs. Aparna Karan, learned Senior DR. It was pleaded on behalf of the assessee that in the impugned cases the appeals were filed against the order passed by the learned first appellate authority on 26.10.2007 for the addition made on account of share capital. The reassessments were reopened on the basis of direction given by the learned Commissioner of Incometax (Appeals) in the block assessment. The reasons recorded by the Assessing Officer were also on the basis of direction of the learned Commissioner of Incometax (Appeals). Against the direction given by the learned Commissioner of Incometax (Appeals), the assessee preferred cross objection in IT(SS) A. No. 126/Ind/05 wherein the Tribunal held that the learned Commissioner of Incometax (Appeals) has no power to give such direction. It was pleaded that the assessment was reopened on 6.3.2006 which is bad in law and beyond the prescribed time limit. A plea was also raised that at the time of filing of appeal on 7.12.2007, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that out of 58,00,000/- share capital of ₹ 29,65,000/- pertained to prior period of block period, hence he deleted ₹ 29,65,000/-. For balance share capital of ₹ 28,35,000/-, the learned CIT(A) directed to issue notice u/s 148 and taxed the share capital in the following asst. years Asstt. year 1996-97 ₹ 14,35,000/- Asstt. year 1997-98 Rs.08,90,000/- Asstt. Year 2002-03 Rs.05,10,000/- Total Rs.28,35,000/- These directions were given by Ld. CIT(A) while deciding the appeal No. U-808/04-05 in case of assessee under explanation 2 to section 153. On the basis of above facts, I reason to believe that an amount of ₹ 14,35,000/- is chargeable to tax in asst. year 1996-97 has escaped assessment. Accordingly notice u/s 148 read with section 150 is issued. The Tribunal in the block assessment case of the assessee (IT(SS) A No. 126/Ind/05) (block period 1.4.1995 to 5.12.2001) by following the decisions of the Hon ble jurisdictional High Court in ACIT v. Rajaram and Brothers; 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us or ingenuine share capital, nor was there any such admission to this effect in the statement recorded in search proceedings. Thus, clearly such addition was outside the scope of the undisclosed income as defined in section 158B(b). Accordingly, such addition is hereby directed to be deleted subject to the direction to the A.O. to initiate reassessment proceedings for the relevant assessment years by issue of notice u/s 148 on the basis of details of investment as noted hereinafter to bring to tax such undisclosed investment in the form of share capital in appropriate years. In the case of the appellant, on the basis of enquiry conducted by the Assessing Officer and total failure on the part of the appellant to establish genuineness of such share capital introduced and to establish identity and/or creditworthiness of such alleged shareholders, it is clearly established such share capital was bogus and liable for addition u/s 68 in view of further detailed findings recorded hereinafter. Thus, such findings, for considering the taxability of such bogus share capital in regular assessment proceedings in appropriate assessment years, are considered necessary for deciding the appeal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her directed that the ld.CIT(A) will not travel beyond the assessment order and the assessment year. We, therefore, direct accordingly, however, the appeal of the revenue is treated as allowed for statistical purposes. 11. This issue has also been decided by this Jurisdictional High Court of M.P. Indore Bench in the case of ACIT vs. Rajaram and Brothers, 274 ITR 122, wherein it is held as under : Held, dismissing the appeal, that once the block assessment for the period April 1, 1988, to August, 11,1998, was gone into in proceedings under section 158BC of the Income-tax Act, 1961, and appropriate reliefs by way of addition and/or deletion were given to the assessee by the Assessing Officer and by the Commissioner (Appeals) and by the Tribunal on the facts, there was no need to give this liberty to the A.O. to again initiate proceedings under section 148 in respect of the concluded regular assessment for the year 1998-99. It was made more so, when no reasons were assigned as to why and under what circumstances and on what basis, this liberty was being given by the Commissioner (Appeals) to the A.O. for initiating of the proceedings u/s 148 of the Act and that for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been challenged by the department before the Hon ble High Court, therefore, the order of the Tribunal has attained finality. Even the Assessing Officer has not applied his mind and has merely acted upon the direction of the learned Commissioner of Incometax (Appeals). In view of the above facts, we are reproducing hereunder section 149 of the Act :- Time limit for notice. 149. 37[(1) No notice under section 148 shall be issued38 for the relevant assessment year,- 39[(a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more40 for that year.] Explanation.-In determining income chargeable to tax which has escaped assessment for the purposes of this subsection, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section.] (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant assessment year, no such notice shall be issued unless the Chief Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer aforesaid, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section (1), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of [Joint] Commissioner, after the expiry of four years from the end of the relevant assessment year, unless the [Joint] Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice.] [Explanation.-For the removal of doubts, it is hereby declared that the Joint Commissioner, the Commissioner or the Chief Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself.] Other provisions. 152. (1) In an assessment, reassessment or recomputation made under section 147, the tax shall be chargeable at the rate or rates at which it would have been charged had the income not escaped assessment. (2) ..... 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