TMI Blog1984 (11) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany Ltd. In the second appeal against the said assessment order, the Tribunal had held that the sum of Rs. 2,00,000 could not be taken as the income of the accounting year ending March 31, 1966, since there was no approval of the sum till April 16, 1966. Pursuant to the said order of the Tribunal, the Income-tax Officer resorted to reopening of the assessment for the assessment year 1967-68 under section 147(a). The assessee resisted the action of the Income-tax Officer contending, inter alia, that there was no failure or omission on its part to disclose the material facts at the time of completion of the original assessment and, therefore, the Income-tax Officer has no jurisdiction to reopen the assessment. The Income-tax Officer, however, rejected the challenge to the reopening of the assessment. He held that the assessee neither in the return of income nor in the statement of income accompanying the return had made any mention of the credit of Rs. 2,00,000 received from the Imperial Tobacco Company Ltd. and that amounted to non-disclosure of material facts necessary for the assessment year 1967-68. The Income-tax Officer also referred to the judgment of the Tribunal relating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal accordingly allowed the appeal sustaining the reassessment under section 147(b) read with section 150 and Explanation 2 to section 153(3) of the Act. We will take up the first question first for consideration.: Mr. Bhat, learned counsel for the assessee, strongly urged that it is not open to the Tribunal to sustain the assessment under section 147(b) of the Act when it has expressly stated that the reassessment made by the Income-tax Officer under section 147(a) was not valid. He urged that the requirements of sections 147(a) and 147(b) are quite distinct and different and it is not open to the Tribunal in the second appeal to sustain the invalid reassessment order under a different provision of law. In support of the contention, the learned counsel relied upon two decisions of the Supreme Court : (i) Johri Lal (HUF) v. CIT [1973] 88 ITR 439 and (ii) Ram Narain v. State of UP, AIR 1957 SC 18. The learned counsel also strongly relied upon the decision of the Allahabad High Court in Raghubar Dayal Ram Kishan v. CIT [1967] 63 ITR 572 which the Tribunal refused to rely upon. Mr. Srinivasan, learned counsel for the Revenue, contended to the contrary. He urged that the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee. Yet there was an escapement and the information of that escapement came subsequent to the original assessment. It was apparently from the order of the Tribunal relating to the assessment year 1966-67. It was in consequence of that information, he had reason to believe that the income chargeable to tax had escaped assessment. There could, therefore, be no impediment to treat the notice issued under section 147(a) as one under section 147(b) of the Act.' Mr. Bhat, however, urged that the formation of the opinion that there was an escapement either under section 147(a) or under section 147(b), should be that of the Income-tax Officer and not that of the appellate authority or that of the court and, therefore, it would be impermissible for any other authority to sustain the reopening of the assessment under section 147(b) on which the Income-tax Officer had not relied. It is true that section 147(a) or (b) refers to the Income-tax Officer. It confers power on the Income-tax Officer to reopen an assessment. But it has been well settled that a wrong reference to the power under which action was taken by an authority would not per se vitiate that action if it could be ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ext urged that the legality of the tax imposed on the assessee must be considered with reference to the provision under which the reassessment was actually made and not under a different provision under which it could have been made. In support of his contention, the learned counsel has relied upon the observation of the Supreme Court in Ram Narain v. State of UP, AIR 1957 SC 18 at p. 20. " We think that learned counsel has rightly submitted that, so far as the, present appellant is concerned, the list prepared under section 15 must have shown him as assessed to a certain amount of tax under clause (f) of sub-section (1) of section 14 and the assessment must have been confirmed on that basis by the District Magistrate. Therefore, the legality of the tax imposed on the appellant must be considered with reference to the clause under which the assessment was actually made and a different clause under which the assessment might have fallen cannot be called in aid of the assessment." It seems to us that these observations cannot be applied to the present case since section 14 of the U.P. Town Areas Act referred to in the above decision was a charging section and we have already held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Commissioner can give under section 31. Under that section, he can give directions, inter alia, under section 31(3)(b), (c) or (e) or section 31(4). The expression 'direction' in the proviso could only refer to the 'directions' which the Appellate Assistant Commissioner or other tribunals can issue under the powers conferred on him or them under the respective sections. Therefore, the expression 'finding' as well as the expression' direction,' can be given full meaning, namely, that the finding is a finding necessary for giving relief in respect of the assessment of the year in question and the direction is a direction which the appellate or revisional authority, as the case may be, is empowered to give under the sections mentioned therein. The words 'inconsequence of or to give effect to' do not create any difficulty, for they have to be collated with, and cannot enlarge, the scope of the finding or direction under the proviso. If the scope is limited as aforesaid, the said words also must be related to the scope of the findings and directions." It was, perhaps, to obviate this difficulty in giving effect to the finding or direction of any authority relating to an excluded in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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