TMI Blog1982 (11) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... n 147(a) of the Income-tax Act was valid ? " The assessee was assessed to income-tax under the original assessment for the year 1959-60 on June 14, 1960, on a total income of Rs. 71,555. This assessment was subsequently rectified when a mistake which appeared in the record was found out. That, however, need not concern us in this reference. Subsequently, on November 11, 1963, a notice under s. 148 of the I.T. Act was issued by the ITO to the assessee on the score that a part of the income had escaped assessment When the assessment was originally made for the assessment year concerned. By this time 4 years had elapsed from the commencement of the assessment year 1959-60. However, the reopening of the assessment, if it were tinder s. 147(a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings the view taken by the ITO was that what the assessee got out of the transaction of transfer of the publication business was not realisation of any capital but only the substitution of a service of annual payments in consideration of parting with a capital asset. It was on that basis that the IT() had proceeded to tax the assessee every year in respect of a fixed payment plus a percentage on the profits in the publication business. Notwithstanding this pattern of all the original assessments, following the assessee's transfer of the publication business, when the officer reopened the assessment for 1959-60 under s. 147(a) of the Act, he was disposed to give a different interpretation of the nature of the transaction. He held that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50,000 only by virtue of subsequent information which came before him after the original assessment was completed. The Department took the matter in appeal before the Tribunal contending that when once the reassessment was sustained as having been properly reopened under s. 147(a), the entire assessment process was again at large and the officer would have ample jurisdiction to go into all income which had not already found its place in the original assessment. The Tribunal rejected this contention of the Department. The tribunal proceeded to hold that even assuming that s. 147(b) can be invoked in this case, the officer did not come by any subsequent information, subsequent to the original assessment, so as to enable him to exercise his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our year period. In a later decision of a Bench of this court in T.C. Nos. 945 of 1977, etc., in judgment dated March 30, 1982, the Bench took a different view (CIT v. Standard Motor Products of India Ltd. [1983] 142 ITR 877). They held that when once an assessment was reopened, the ITO not only has the jurisdiction, but it will be his duty, to determine the tax liability of an assessee as a whole, and for that purpose, he would have necessarily taken into account not only the escaped income in respect of which a notice under s. 147 had been issued, but also the entire income that had escaped assessment during the year. The Bench noticed the earlier decision in AL. VR. ST. Veerappa Chettiar v. CIT [1973] 91 ITR 116 (Mad), but were inclined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had not been brought to tax during the course of the original assessment. This view of the Allahabad High Court was endorsed without any discussion, in the subsequent wealth-tax decision of the Kerala High Court in CWT v. C. Ravindran [1977] 107 ITR 547, with the only observation that the provisions of s. 147 of the Act were in pari materia with the provisions of the W.T. Act, 1957. Mr. Uttama Reddy, learned counsel, also brought to our notice passing observation of the Supreme Court in CIT v. Bombay Dyeing and Manufacturing Co Ltd.[1971] 82 ITR 892. That was an appeal by special leave in which the limited point for the decision before the Supreme Court was whether the Tribunal ought to have been directed by the Bombay High Court to stat ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
