TMI Blog1990 (11) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... ---------- Thus, the total investment up to 1976-77 shown by the petitioner was in the sum of Rs. 7,68,897. Assessments for the years 1968-69 to 1973-74 were simultaneously taken up and completed by the Income-tax Officer, Special Ward, Ajmer, on May 13, 1974. In the said assessment proceedings, the petitioner submitted a letter dated April 29, 1974, detailing therein the amount of investment and sources thereof. He also submitted a valuation report from Messrs. Basant Singh and Company, Engineers, Architects, Gazetted Valuers and Construction Agency, No. 18, Sector 3-A, Chandigarh, dated February 4, 1974. As per the report of the aforesaid valuer, the cost of construction at the end of March, 1973, including the cost of land, came to Rs. 5,18,400. It was verified and certified by the valuer that on completion, the total cost would be Rs. 7,01,500 including cost of land, Rs. 92,539. The Income-tax Officer completed assessments for the assessment years 1968-69 to 1973-74 on May 13, 1974. On August 25, 1977, the Income-tax Officer completed the assessment for the year 1975-76. While framing the assessment for the year 1976-77 on January 24, 1978, the Income-tax Officer no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "....In this case, as stated earlier , the appellant had intimated the fact about the construction of the house property at Chandigarh, it had also furnished details showing the investment made by it from time to time and had also furnished details showing the amount of rent realised by it from the tenants. Now it was for the Income-tax Officer to examine them and come to a reasonable conclusion. In case he doubted the correctness of those details, he could have made necessary additions at the time of the original assessment and it was not correct for him to leave the matter open for assessment to be made at some later date under section 147(a) of the Act. Considering the facts of the case and the legal position explained above, I hold that the objections raised by the learned counsel against initiation of reassessment proceedings is well founded. It is accordingly upheld." As a result, the Commissioner of Income-tax allowed the appeal of the assessee and cancelled the assessment orders of the two years. Thereafter, the Department went up in second appeal before the Income-tax Appellate Tribunal. The Tribunal also rejected the appeal sustaining the order of the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eassessment in respect of the aforesaid four assessment years, i.e., 1970-71, 1971-72, 1972-73 and 1973-74, were taken. It is the notices issued in respect of these assessment years that are the subject-matter of decision in these writ petitions. What strikes one at the threshold is that the validity of these notices was challenged on the ground that once the attempt of the Income-tax Department to reassess the petitioner under clauses(a) and (b) of section 147 had failed, it was not open to the Department to make an effort to include those additions for the years 1970-71 to 1973-74. Exactly the same controversy was the subject-matter of decision for the later years, i.e., 1974-75 and 1975-76, and, therefore, the Department could not take the same plea on which adjudication had already gone against it. Reassessment proceedings in respect of the assessment years 1974-75 and 1975-76 had been done for the same transactions, and consequently, the present proceedings were barred under the law. The Commissioner of Income-tax (Appeals) as well as the Tribunal had found that the Income-tax Officer had no jurisdiction and power to initiate proceedings for reassessment by asserting that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the assessee from assessment in the particular year. It is not any and every material, howsoever vague and indefinite or distant, remote and far-fetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. If there is no rational and intelligible nexus between the reasons and the belief, on such reasons, no one properly instructed on facts and law could reasonably entertain the belief that the conclusion would be inescapable that the Assessing Officer could not have reason to believe that any part of the income of the assessee had escaped assessment. The words "reason to believe" suggest that the belief must be that of an honest and reasonable person based upon reasonable grounds. The Assessing Officer would be acting without jurisdiction if the reason for his belief that the conditions are satisfied does not exist. The court can always examine this aspect though the declaration or sufficiency of materials cannot be investigated. As to what is the worth of the valuer's report with regard to the cost of construction of building has been the subject-matter of several decisions. In Smt. Amala Das v. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qualification that a finding reached in the assessment proceedings for an earlier year, after due inquiry, would not be reopened in a subsequent year, if no fresh facts are found in the subsequent assessment year. This is on the principle that there should be a finality and certainty in all litigations including those arising under the Income-tax Act. (see CIT v. Bhilai Engineering Corporation (P) Ltd. [1982] 133 ITR 687 (MP)). Learned counsel for the Revenue reminded this court of its limited jurisdiction under article 226 of the Constitution and urged that as this court does not sit in appeal over a matter such as the present one involved in these cases, this court should not quash the notices issued under section 147 and it should direct the petitioner to raise the plea taken in these writ petitions in regular assessment proceedings which would be taken up in pursuance of the same. No one can dispute this proposition. Generally, there should be no interference by the High Court in a matter such as is involved in the present cases. But, it is demonstrated that the notices had been issued under section 147 in June, 1979, to cover up the illegalities. For what I have said above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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