TMI Blog1990 (11) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... anaudia. In its return for the assessment year 1977-78, the assessee disclosed the amount spent on the construction of the building. In the assessment proceedings of D. P. Kanaudia for the assessment years 1975-76 to 1977-78, the Income-tax Officer refused to accept the figure disclosed by the said individual as the amount spent on construction. On the basis of the opinion of the Valuation Officer, the Income-tax Officer, was of the opinion that the total amount spent on construction was Rs. 14,11,425 and not Rs. 10,04,292 as claimed by the said individual. He, accordingly, sought to add the difference amount as his income for the said years. The assessee challenged the same by way of appeal and the matter was ultimately carried to the Tribunal. The Tribunal held, for the reasons give by it, that the said additions cannot be made to the income of D. P. Kanaudia and that he cannot be asked to explain the source of the said investment. It was observed that the petitioner is responsible for explaining the source of investment in such construction. Para 9 of the Tribunal's order may be quoted. It reads thus : "As laid down in the case of Bijli Cotton Mills Ltd. if the promoters of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the Tribunal. To this letter, the petitioner replied on March 21, 1988, stating that he has disclosed full particulars in his return and, therefore, the proposal to reopen its assessment under section 147(a) of the Act is unwarranted. It is thereafter that a formal notice under section 147/148 of the Act was issued. After receiving the notice, the petitioner filed objections on July 1, 1988, questioning the validity of the said notice. He approached this court by way of a writ petition questioning the said notice. The writ petition was disposed of by Bench of this court on September 6, 1988, whereunder the Income-tax Officer was directed to dispose of the objections filed by the petitioner on July 1, 1988, before proceeding with the impugned notice. After receiving the High Court's order, the Income-tax Officer passed orders on September 23, 1988, overruling the objections raised by the petitioner. The petitioner then filed another set of objections on October 3, 1988, to which the assessing authority replied on October 27, 1988, stating that he has already dealt with all the objections raised in the petitioner's objections dated July 1, 1988, in his order dated March 1, 1988 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer that it is a fit case for the issue of such notice. (2) No notice shall be issued under section 148 after the expiry of four years from the end of the relevant assessment year, unless the Chief Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice." A reading of section 151 shows that in case the assessment is sought to be reopened after the expiry of four years but before the expiry of eight years, prior approval of the Chief Commissioner or Commissioner has to be obtained and where it is sought to be reopened after eight years, the approval of the Board has to be obtained. It does not say that where assessment is sought to be reopened after eight years, approval of both the Board and the Chief Commissioner or Commissioner should be obtained. The Board is an authority higher than the Chief Commissioner or Commissioner. Once the approval of the Board is obtained, there is no question of obtaining the approval of the Chief Commissioner or Commissioner over again sub-sections (1) and (2) of section 151 are two independent provisions. The interpretation sought to be placed upon the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shall, therefore, be deemed to be one issued under clause (a) of section 147 only. Strong reliance is placed upon the decision of this court in Rani Rajendra Kumari Ba v. ITO [1981] 130 ITR 708. In this case, certain income was added to the total income of the husband under section 64 of the Act. On the husband's appeal, the Appellate Assistant Commissioner held that such inclusion was bad. The Tribunal affirmed the finding. Thereafter, a notice under section 147 was given to the wife and her assessment was sought to be reopened. The basis for reopening was the observation made in the husband's appeal. The wife challenged the initiation of reassessment proceedings. Her writ petition was allowed holding that inasmuch as no notice was given to her and she was not heard before making those observations, as required by Explanation 3 to section 153 read with section 150, the initiation of reassessment proceedings was barred by time. A perusal of the decision shows that the Bench proceeded on the footing that unless Explanation 3 to section 153 read with section 150 comes to the rescue of the Revenue, reassessment proceedings are barred. The different periods of limitation contained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t upon the construction of the hotel building. It may be equally open to the petitioner to show that the petitioner cannot be called upon to explain the source of additional expenditure, if any, incurred. All this depends upon the nature and contents of the explanation or objections that may be filed by the petitioner in reassessment proceedings. Suffice it to say that we see no illegality in the initiation of proceedings under section 147 / 148 in this case. Learned counsel for the petitioner brought to our notice the decision of the Supreme Court in Indian Oil Corporation v. CIT [1986] 159 ITR 956 to emphasise that unless the two requirements mentioned in clause (a) to section 147 are satisfied, a notice thereunder cannot be issued. There can be no quarrel with the above proposition. Indeed, the law under section 147 is well settled by various decisions of the Supreme Court. We have already expressed our opinion that the order of the Tribunal in D. P. Kanaudia's appeal does indeed constitute relevant and adequate material for the Assessing Officer to believe that by reason of omission or failure on the part of the assessee to disclose truly and fully all material facts necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X
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