TMI Blog2006 (1) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... mendment Act came into force from 1996 the amended provision by virtue of the retrospective operation came into effect from April 1, 1989, which equally applies to the facts of the case. - therefore conclusion reached by the Tribunal that the notice under section 148 is vitiated for not giving thirty days clear notice, is unsustainable in law and accordingly, it is set aside. Further, Tribunal was right in holding that the reassessments made for these years were invalid in law because of the defective notice - - - - - Dated:- 25-1-2006 - Judge(s) : P. VISHWANATHA SHETTY., N. KUMAR. JUDGMENT The judgment of the court was delivered by N. Kumar J.-The Revenue has sought this reference under section 256(1) of the Income- tax Act, 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at Rs. 81,228. While filing the returns of the firm, the said gold was not included either in the capital account or as a stock of the firm. It was also not valued as stock of Rajatha Mahal. On filing of such return, the assessee was assessed under section 143(1)(a) for the years 1985-86, 1987-88 and 1989-90, and for the year 1986-87 under section 143(3). The assessing authority, in exercise of the power conferred on him under section 147 of the Act issued notice under section 148 for reopening of the assessment on the ground that the income has escaped assessment insofar as the aforesaid extent of gold is concerned. The said notice directed the assessee to file a return within 30 days time. Accordingly, the assessee filed its return. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 kgs. at cost price other than stating that this was kept as a separate item. The revaluation of 18.621 kgs. of jewellery at the same rate as applicable to other items of closing stock is in accordance with the principles of valuation. Therefore, he confirmed the order of assessment. Aggrieved by these two orders, the assessee preferred a second appeal to the Tribunal. The Tribunal held that, when the value of such stock was not credited to the capital account of the partner in the assessee-firm, it cannot be viewed as his capital contribution; it was kept in separate stock with the assessee firm, it did not get merged with the trading stock of the assessee-firm as its identity was preserved in the stock register since the inception, pendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 1996 made the amendment retrospective with effect from April 1, 1989, by deleting the words "not being less than 30 days" in section 148 and after the amendment, it is left to the authorities to specify the time. Therefore, the Tribunal was in error in holding that the notice issued was invalid. Secondly, he contended that the value of 18.621 kgs. of gold which was brought by partner K.V. Jayaprakash into the firm did constitute stock-in-trade of the assessee as is clear from the material on record and the finding of the Tribunal is contrary to the material on record and is liable to be set aside. Per contra, Sri S. Parthasarathy, learned counsel appearing for the assessee, supported the impugned order. In order to appreciate the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly, as if such return were a return required to be furnished under section 139. (2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so." The amendment was introduced by the Finance (No. 2) Act, 1996 which gave retrospective effect to the amended provision with effect from April 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... makes it clear that the amended provision came into force with effect from April 1, 1989. In other words it has been given a retrospective effect. Therefore, in law it is as if that was the law as on April 1, 1989. Admittedly, the notice under section 148 is issued on March 28,1990, which stipulated thirty days time within which the returns had to be filed. Though the Amendment Act came into force from 1996 the amended provision by virtue of the retrospective operation came into effect from April 1, 1989, which equally applies to the facts of the case. In that view of the matter, the conclusion reached by the Tribunal that the notice under section 148 is vitiated for not giving thirty days clear notice, is unsustainable in law and according ..... X X X X Extracts X X X X X X X X Extracts X X X X
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