TMI Blog2005 (5) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue and against the assessee. - - - - - Dated:- 10-5-2005 - Judge(s) : R. K. AGRAWAL., RAJES KUMAR. JUDGMENT The Income-tax Appellate Tribunal has referred the following questions of law under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), relating to the assessment year 1981-82 for opinion to this court: "1. Whether, on the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal, was in law justified in rejecting the additional grounds challenging the validity of the assessment order on the basis of illegal initiation of proceedings under section 148 without complying with the provision of section 148(2)? 2. Whether, on the facts and in the circumstances of the case, the hon'ble Tribunal was in law justified in holding that the amendment in the provisions of sections 139(8), 215 and 217 inserted with effect from April 1, 1985, would be applicable to assessment of earlier years completed after April 1,1975 and so charging of interest in the case of the assessee under section 138(8) as well as under section 217 is perfectly justified as the assessment under section 147 has been made for the first tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer prior to the issue of the notice under section 148. He pleaded that since the reasons need to be recorded prior to the issue of the notice, the requirement of section 148(2) has not been complied with and, therefore, the proceedings are invalid and void ab initio. In regard to the charging of interest under section 139(8) and section 217, his plea was that the assessment having been made under section 148 though for the first time, and being related to the assessment year 1980-81, the interest would not have been charged as this section was amended for inclusion of assessments made for the first time under section 148 only with effect from April 1, 1985. The Departmental Representative on the additional grounds submitted that the assessee had merely raised these grounds without any basis. In regard to the first ground her plea was whether the books were lost in fire or otherwise the fundamental facts remain uncontroverted that the books were not produced. The other plea raised was that in regard to the lack of jurisdiction of the Assessing Officer, the assessee had not raised this issue before the Commissioner of Income-tax (Appeals) nor has he placed the copy of the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings has not been challenged by the assessee before the assessing authority as well as before the first appellate authority and, therefore, the Tribunal has rightly refused to entertain such plea. Having heard learned counsel for the parties, we are of the considered opinion that the Tribunal has illegally refused to entertain the plea relating to the lack of jurisdiction of the officer on the ground that no reason was recorded before issue of notice under section 148(2) of the Act. The Tribunal has illegally rejected the additional plea on the ground that the assessee could have demanded a copy of the reasons recorded and agitated on the assumption of jurisdiction. In the case of P.V. Doshi v. CIT [1978] 113 ITR 22, the Gujarat High Court has held as follows: "The conditions precedent for initiating reassessment proceedings are : (i) reasonable belief reached by the Income-tax Officer under clause (a) or clause (b) of section 147; (ii) recording of reasons by the Income-tax Officer under section 148(2); (iii) sanction before issuing the notice of reassessment by the higher authorities under section 151. These three conditions have been introduced by way of safeguards in pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee's objection in regard to the validity of the notices under section 34. In the case of Inventors Industrial Corporation Ltd. v. CIT [1992] 194 ITR 548, the Bombay High Court held as follows: "The provisions of section 147(a) of the Income-tax Act, 1961, can be invoked only in a case where the Income-tax Officer had reason to believe that, by reason of the omission or failure on the part of the assessee to make a return under section 139 for any assessment year to the Income-tax Officer or to disclose fully and truly all material facts for the assessment for that year, income chargeable to tax had escaped assessment for that year. The formation of belief by the Income-tax Officer to the effect that income of the assessee had escaped assessment is one of the conditions precedent for the assumption of jurisdiction to make reassessment. Assessment made under section 148/143(3) without the valid formation of belief as to the escapement of income is void ab initio or a nullity. A ground by which the jurisdiction to make assessment itself is challenged can be urged before any authority for the first time. If it is found that the Income-tax Officer had no jurisdiction to m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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