TMI Blog2007 (7) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... the reopening of the assessment was bad in law under section 147/148 of the Income-tax Act, even though the assessing officer giving effect to the first Appellate Authority order in conformity with Supreme Court Judgment reported in 237 ITR 174 is as per law?" 2. The facts leading to the above substantial question of law are as under:- 3. The assessee is a partnership firm, running Hatcheries and Poultry. The relevant assessment years are 1992-93 and 1993-94 and the corresponding accounting years ended on 31.03.1992 and 31.03.1993, respectively. For the assessment year 1992-93, assessment was completed on 02.11.1998 under Section 143(3) read with Section 147 of the Income-tax Act ("Act" in short) determining a total income of Rs.3,10,280/-. For the assessment year 1993-94, assessment was completed on 27.10.1998 under Section 143(3) read with Section 147 of the Act determining a total income of Rs.4,74,970/-. Aggrieved by the assessment orders for both the years, the assessee filed appeals to the Commissioner of Income-tax (Appeals). The C.I.T.(A) partly allowed the appeals and granted relief in respect of the claim made by the assessee under Sections 80HH and 80-I of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee and later, the Assessing Officer issued reopening notices under Section 148 of the Act on the basis of the Supreme Court judgment cited supra. There is no dispute that the earlier C.I.T.(A)'s order has become final and also the Assessing Officer passed consequential orders in giving effect to the said C.I.T.(A)'s order. There was no further appeals by the Revenue. Though the said C.I.T.(A)'s order is erroneous in view of the Supreme Court judgment in the case of Commissioner of Income-tax Vs. Venkateswara Hatcheries (P.) Ltd. [1999] 237 ITR 174, the same has not been set aside by the process known to law. The Tribunal considered this aspect and held in Paragraph 3 of its order, as follows:- "The original assessment in these cases was completed on 2.11.98 under sec.143(3) read with sec.147 of the I.T. Act. These were subjected to appeal. The CIT(Appeals) allowed the deduction claimed by the Assessee under sec.80HH and 80-I vide his order dated 01.03.1999. After passing the order by the CIT(Appeals), the assessment was reopened following the ratio of the judgment of the Hon'ble Supreme Court in the case of CIT v. Venkateswara Hatcheries (P) Ltd. Others [1999] 237 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt does not automatically have the effect of vacating the order of the Tribunal which has been statutorily made final under section 254(4) of the Act and which has already been given effect to. Assuming for a moment as contended by the learned counsel for the Revenue that an infirmity is now created in the order by virtue of the decision of the Supreme Court, that order cannot be read as automatically been corrected nor is the effect given to that order automatically undone. Its legal validity is not in any way affected by the decision of the Supreme Court. Even a wrong order has a finality and unless that finality is disturbed by a process known to law or by a process authorised by law, the rights of the assessee and the Revenue will continue to be governed by the order of the Tribunal. There is no justification for the action of the Inspecting Assistant Commissioner in interfering with the order of the Income-tax Officer giving effect to the order of the Tribunal in his order under section 154. The proposition that the order of the Income-tax Officer merely gives effect to the relief as directed by the Income-tax Tribunal cannot be doubted. But even then, what is important is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he subject-matter under appeal before it is final and cannot be reopened by the assessee or the department." "....It is said that the words "has reason to believe that by reason of the omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income-tax have escaped assessment" are more comprehensive than the words "the Income-tax Officer discovers that income, etc., have escaped assessment in any year", and, therefore, though there was a finding by the Tribunal that the Income-tax Officer did not "discover" that there was escape of assessment, the Income-tax Officer under the amended section 34 can initiate proceedings in spite of that finding. We cannot accept this argument. It could not have been the intention of the legislature by amending the section to enable the Income-tax Officer to reopen final decisions made against the revenue in respect of questions that directly arose for decision in earlier proceedings. The Tribunal held in the earlier proceedings that the Income-tax Officer knew all the facts at the time he made the original assessment in regard ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
