TMI Blog2004 (9) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... 004 - Judge(s) : RAJESH BALIA., AJAY RASTOGI. JUDGMENT The judgment of the court was delivered by Rajesh Balia J.- This appeal is directed against the order of the Income-tax Appellate Tribunal, Jodhpur Bench, Jodhpur, dated May 26, 2003, relating to the assessment year 1988-89 deciding I.T.A. No. 1111/Jp/1994 and I.T.A. No. 898/Jp/1995 filed by the respondent-assessee before the Tribunal. There were cross-appeals filed by the assessee to the extent they were aggrieved with the order passed by the Commissioner of Income-tax (Appeals) in an appeal filed by the assessee against the order of reassessment for the assessment year 1988-89 dated November 30, 1993. The appeal of the assessee was allowed and that of the Revenue was dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not on derivative satisfaction of some other officer, therefore, the basic pre-condition for the Assessing Officer to hold the reason to believe that income has escaped assessment for the assessment year 1988-89 was lacking. Lastly, it was found that before initiating proceedings under section 147 for the impugned assessment year 1988-89, the reasons for initiating such proceedings were not recorded as required by sub-section (2) of section 148. The reasons are purported to have been recorded on September 30, 1991 and notices have been issued on October 14, 1991. Learned counsel for the Revenue has urged as was urged before the Tribunal that there may be some mistake in writing the dates, and therefore, no exception can be made out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... October 14, 1991, and served on October 29, 1991. Obviously, such an order could not have been drawn until the date of service of notice. Even if it is assumed that the reasons were recorded on October 14, 1991, still reference to the service of notice of a later date could not have been made in the order. If recording of the order is October 30, 1991, as the date suggested now, then too it does not alter the position of mentioning of issuance of notice dated October 14, 1991, and served on October 29, 1991 and makes the initiation of proceedings prior to recording of reasons. Since the satisfaction of the Assessing Officer for holding belief that income has escaped assessment to tax is a condition precedent before assuming jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aharaja Pratapsingh Bahadur of Gidhaur [1961] 41 ITR 421 (SC). It was a case of assessment under the Indian Income-tax Act, 1922. Section 34 of the Act was amended by the Income-tax and Business Profits Tax (Amendment) Act, 1948, making it retrospectively effective with effect from March 30, 1948, which inter alia make the provisions that the Income-tax Officer shall not issue a notice under section 34 unless he has recorded his reasons for doing so and the Commissioner is satisfied on such reasons that it is a fit case for the issue of such notice. Section 34 of the Act of 1922 was the provision corresponding to section 147/148 of the Act of 1961. The notices were issued on August 8, 1948, in which reasons had not been recorded before issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances to find out whether the Income-tax Officer had jurisdiction to proceed under section 34(1)(a)." The court finding that no recording of reasons have been produced, therefore, there is no proof that the necessary condition before assuming jurisdiction were in existence. The notices were held to be invalid. The principle was reiterated and applied by various High Courts in India. Reference in this connection, may be made to: (1) P.V. Doshi v. CIT [1978] 113 ITR 22 (Guj); (2) CIT v. Thakurlal [1981] 132 ITR 398 (MP); (3) S.P. Divekar and A.P. Divekar v. CIT [1986] 157 ITR 629 (Bom); (4) CIT v. Sukh Lal Ice Cold Storage Co. [1992] 196 ITR 562 (All); and (5) CIT v. Kerala State Cashew Development Corporation [1992] 198 ITR 520 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 139 for any assessment year to the 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 alternatively notwithstanding that there has been no omission or failure as mentioned above on the part of the assessee, the Income-tax Officer has in consequence of information in his possession, reasons to believe that income chargeable to tax has escaped assessment for any assessment year. Unless the requirements of clause (a) or (b) of section 147, are satisfied, the Income-tax Officer has no jurisdiction to issue a notice under section 148." Finding that important safeguards provided under the Act are not followed, the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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