TMI Blog1998 (8) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... its income on an estimated basis. The Assessing Officer passed the assessment orders in respect of the firm on December 7, 1993, relating to the assessment years 1986-87, 1987-88 and 1988-89 in compliance with the directions of the Settlement Commission. The orders so issued were described as one issued as per the order under section 245D, dated November 10, 1993 (exhibits P-2 to P-4). As per the original return filed by the firm for the assessment years 1986-87 and 1988-89, there was no taxable income in the hands of the petitioners. Therefore, the petitioners did not file the returns for these two assessment years. However, the petitioners filed the returns for the assessment year 1987-88 declaring the share income of Rs. 16,530. The respondent issued notices dated March 21, 1994 (exhibits P-5 to P-8), under section 148 of the Act for the assessment years 1986-87 and 198889 and served on the petitioners on March 29, 1994. The petitioners did not respond to the said notices, as accordingly to them, the firm was facing great financial difficulties and ultimately it was closed in 1995. It is stated that no further notice under section 142(1) of the Act or any proposal to complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese notices were also remained unresponded by the petitioners, follow up actions were taken by the issue of notices under section 142(1) dated August 6, 1997 and September 22, 1997, and by covering letters dated August 27, 1997 and August 19, 1997, etc., as per exhibits P-13 to P-16. It is stated that the petitioners continued their non-co-operation till the final hearing fixed on October 7, 1997. The petitioners also did not respond to the hearing notice and, therefore, orders under section 144 have been passed in respect of the petitioners for the years 1986-87 and 1988-89 on October 7, 1997, as already proposed in the letters as per exhibits P-15 and P-16. The said orders and demand notices with challans and penalty notices were despatched on the next day, i.e., on October 8, 1997. The details of the same are furnished as follows : Name of the Assessment year/ Total Demand D and C No. assessee date of order income raised (Rs.) (Rs.) Mrs. Nilofer Hameed 1986-87 2,79,230 5,22,785 I(3)-4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, that the Revenue cannot complete the assessment of the petitioners on the basis of the second notice in view of the provisions of section 153(2), it is stated that proceedings initiated as per notices under section 148 issued on March 21, 1994, as per exhibits P-5 to P-8 already got time-barred on March 31, 1996. It is also stated that the issue of notices under section 148 and its follow up action at each time have to be treated as a separate compartment and that the fact that no assessment could be made by the Department on the basis of the notices under section 148 dated March 21, 1994, does not debar the Department from issuing notices under section 148 on a second time. The time-limit for issuing notices under section 148 is dealt with in section 149 and that in the instant case sub-clause (iii) of clause (b) of sub-section (1) of section 149 applies in which case there is no bar or restriction on the number of proceedings that can be initiated under section 147 by issue of notice under section 148. It is pointed out that when a return is filed in pursuance of a valid notice and proceedings are pending, the Revenue cannot initiate fresh proceedings by issuing notices under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents as the Assessing Officer may require, or to furnish in writing and verified in the prescribed manner information in such form and on such points or matters, as the Assessing Officer may require. For that purpose, clause (b) of the proviso to clause (iii) of sub-section (1) of section 142 states that the Assessing Officer shah not require the production of any accounts relating to a period more than three years prior to the previous year. Section 143 of the Act, as it stood at the relevant time, provides for assessment. Section 144 of the Act provides that if any person fails to make the return required under sub-section (1) of section 139 of the Act or fails to comply with all the terms of a notice issued under sub-section (1) of section 142, the Assessing Officer, after taking into account all the relevant materials which he has gathered, shall, after giving the assessee an opportunity of being heard, make the assessment of the total income or loss to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment. Section 147 of the Act, as it stood during the assessment years concerned, reads as follows:-- "147. Income escaping ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in which case 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. Under sub-section (2) of section 148, the Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so. Section 149 of the Act provides the time-limit for notice as per which no notice under section 148 shall be issued for the relevant assessment year in the following cases :-- "(a) cases falling under clause (a) of section 147-- (i) for the relevant assessment year, if eight years have elapsed from the end of that year, unless the case falls under sub-clause (ii) ; (ii) for the relevant assessment year, where eight years, but not more than sixteen years, have elapsed from the end of that year, unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees fifty thousand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght years from the relevant assessment year. It is further clear that if an assessment or reassessment is to be made under section 147 where clause (a) is attracted, it cannot be made after the expiry of four years from the end of the assessment year in which notice under section 148 was served. In the instant case, as already stated, the assessment years concerned are 1986-87 and 1988-89. The petitioners admittedly did not file any return for the said two assessment years voluntarily under section 139(1) of the Act. They also did not file any return pursuant to notices dated March 21, 1994 (exhibits P-5 to P-8), issued under section 148 of the Act for the aforesaid two years. It is also an admitted fact that the respondent did not complete the assessment of the petitioners for the aforesaid two years pursuant to the notices dated March 21, 1994. As per the provisions of section 153(2) of the Act, in the case falling under section 147(a) the assessment for the said two years should have been completed on or before March 31, 1998, as per the law as it stood for the relevant assessment years. As already stated, no assessments were made. The respondent issued fresh notices under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -89. The contention of the petitioners that a second notice under section 148 of the Act cannot be issued when the assessment pursuant to the first notice has not been completed, cannot be accepted as an absolute proposition. According to me, the Assessing officer can issue any number of notices under section 148 of the Act provided the conditions stipulated in section 147 are satisfied and the same is within the period specified under section 149 read with section 151 of the Act. (See CIT v. Maharaja Pratapsingh Bahadur of Gidhaur [1961] 41 ITR 421 (SC) at page 425, KEM Mohammad Ibrahim Maracair v. CIT [1964] 52 ITR 890 (Mad), Gurdayal Berlia v. CIT [19661 62 ITR 494 (Cal) and Ashok Kumar Dixit v. ITO [1992] 198 ITR 669 (All)). If an assessment is pending either by way of original assessment or by way of reassessment proceedings, the Assessing Officer cannot issue a notice under section 148 but if no proceedings are pending either by way of original assessment or by way of reassessment, he can issue a notice under section 148 within the time mentioned above. In this case, as already stated, the first notice under section 148 was issued on March 21, 1994, and served on March 29, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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