TMI Blog2002 (2) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was reopened under section 147 of the Act by the Assessing Officer for taxing the income which had allegedly escaped assessment. For this purpose, notice under section 148 was issued on July 18, 1995, after recording the following reasons: "During the course of search operation conducted under section 132 of the Income-tax Act, 1961, at the residential premises of R. Kakkar Glass and Crockery House, Lal Bazar, Jalandhar, cash amounting to Rs.60,000 and FDRs/KVPs, etc., were found and seized. It was also gathered from the various documents found during the search that the assessee had also made huge investments on the acquisition/construction of certain house properties. The assessee-firm was asked to explain the source of acquisition of the aforesaid cash as well as the source of investment made with regard to the purchase of FDRs/KVPs and the acquisition/construction of properties. As the assessee failed to explain the source of acquisition of the aforesaid cash and the investment with regard to FDRs/KVPs and construction of properties. These have been treated as income of the assessee from the undisclosed sources for the relevant period. Since I have reasons to believe t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent as argued by the appellant in his letter dated July 21, 1998. As regards reference to order under section 132(5) and quantification of income that escaped assessment is concerned, the Assessing Officer did not form his opinion of income having escaped assessment even on the basis of order under section 132(5). The order under section 132(5) has only been referred to for the purpose of quantification of income that has escaped assessment and this reference cannot be construed as one of the reasons for forming the belief regarding escapement of income. In view of this, it is held that the reasons recorded by the Assessing Officer for reopening the assessment were not valid reasons and therefore the same are quashed. Consequently, notice under section 148 issued in pursuance to such invalid reason is also quashed. Consequently, the assessment made by the Assessing Officer vide order dated January 16, 1998, is quashed." Aggrieved by the order of the Commissioner (Appeals), the Revenue filed an appeal before the Income-tax Appellate Tribunal which is pending. Meanwhile, proceedings under section 147 were again initiated for the assessment year 1991-92 and a fresh notice under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .3,20,900 was unwarranted. It was, therefore, contended that since the notice dated July 20, 1995, has been held to be invalid and quashed on technical grounds, there is no bar in law against issuing another notice under section 148 by rectifying the technical defects provided it falls within the parameters prescribed in sections 147 and 148 of the Act. Learned counsel also pointed out that pendency of the Revenue's appeal before the Tribunal in the earlier proceedings would not lead to any anomalous situation if an assessment is framed in pursuance of the impugned notice. In case the Revenue succeeds in appeal before the Tribunal, the earlier proceedings under section 147 would revive and the original order dated January 16, 1998, shall stand restored. As a consequence thereof, the present proceedings shall automatically become redundant. However, as long as the order of the Commissioner (Appeals) quashing the earlier notice under section 148 was in operation, no fault could be found with the impugned notice under section 148 dated February 9, 1999, for assessing the escaped income of Rs.3,20,900. After hearing counsel for the parties and after perusing the record, we find no me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Assessing Officer subsequently suggesting escapement of income under the same head or some other head, we see no fetters on his power to issue a fresh notice under section 148. Needless to emphasise that all such subsequent notices have to conform to the parameters prescribed under the law including the provision regarding limitation. While issuing the impugned notice under section 148, the Assessing Officer has recorded the following reasons: "The assessee-firm, R. Kakkar Glass and Crockery House, filed its return for the assessment year 1991-92 on October 4, 1991, showing income of Rs.51,180. Subsequently a search under section 132 took place at the business premises of the assessee and the residential premises of the partners. A lot of incriminating documents were found and seized during the course of search which show that the assessee-firm had been conducting large scale undisclosed business. Pages 48 to 53 of annexure A-9 seized during the course of search are balance-sheets of the assessee-firm for the assessment year 1990-91 to the assessment year 1993-94 which show that the assessee-firm has been furnishing inaccurate particulars during the course of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een issued on the basis of undisclosed capital arrived at by the comparison of the balance-sheets seized during the course of search and the balance-sheets filed with the returns of income. It has also been correctly pointed out on behalf of the Revenue that no anomalous situation would arise if the Revenue was to succeed in its appeal before the Tribunal. If the earlier assessment with the addition of Rs.3,20,900 were to be restored, the second assessment in respect of the same addition would stand automatically vacated as in that event the fresh proceedings under section 147 shall be rendered infructuous. None of the authorities cited by counsel for the petitioner are applicable to the facts of the present case. In Rao Thakur Narayan Singh's case [1965] 56 ITR 234 (SC), the notice under section 34 had been issued on the ground that syar income and interest income had escaped assessment. The Tribunal in considering the validity of reassessment notice, only discussed the question of escapement of syar income. It did not advert to the interest income at all. It came to the conclusion that the Income-tax Officer at the time of original assessment had the knowledge of the existen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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