TMI Blog1990 (9) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... dia before the Hon'ble High Court of Allahabad and its judgment in Renusagar Power Co. Ltd. (No.1) v. ITO [1979] 117 ITR 719 and Renusagar Power Co. Ltd. (No.2) v. ITO [1979] 117 ITR 733. There were 4 items of escapement on the basis of which notice under section 147(a) was issued for assessment year 1968-69 which were as under :--- Rs. (i) Transformer break-down expenses 27,480 (ii) Deferred guarantee commission 3,68,595 (iii) Start-up and commencing expenses 12,20,872 (iv) Excess development rebate allowed to the company 1,94,14,168 11. The Hon'ble High Court held that no material relevant to items at serial Nos. 1 and 2 had been kept back by the assessee during the original assessment proceedings and, therefore, escapement of income could not be attributed to non-disclosure. It was for the ITO to draw proper inference from the basic facts placed before him. Thus section 147(a) could not be invoked in respect of these items. However, in respect of items at serial Nos. 3 and 4 it was found that the basis for reopening was there as the petitioner company had not disclosed fully and truly all the material facts. 12. The Hon'ble High Court gave the following directions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble High Court, consequently he assessed those other items as well. In appeal the learned CIT (Appeals) discussing the judgment of the Hon'ble High Court in detail gave a finding and directed the IAC (Assessment) to delete of the additions where there was no omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. He had given this finding on the ground that the judgment of the Hon'ble High Court was binding on the department as the department had not preferred an appeal against the said decision. In the said decision the Hon'ble High Court while restraining the revenue from assessing certain items had given out the reasonings and the said reasonings were binding on both the parties. He further held that the alleged reasoning was that the department was not free on the basis of a notice under section 147(a) to reopen and assess on certain items which had been disclosed fully and truly along with material facts necessary for the assessment by the assessee. The revenue, being aggrieved, has come up in appeal before the Tribunal. 16. The learned departmental representative has very vehemently argued out that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 147(a) the ITO will have jurisdiction to assess the entire income in the hands of the assessee irrespective of the fact whether the items of income fall under section 147(a) or under section 147(b) of the Act even though the issue of a notice under section 147(b) of the Act could be barred by the expiry of the period of limitation prescribed, therefore, under section 149 of the Act. 18. The learned departmental representative has further relied on the decision of the Hon'ble Calcutta High Court in the case of CIT v. Ramsewak Paul [1977] 110 ITR 527, in which it was held that once a re-assessment proceeding has started it is the duty of the ITO to levy tax on the entire income that has escaped assessment during that year. The Hon'ble Calcutta High Court has also followed the Hon'ble Supreme Court's decision in V. Jaganmohan Rao's case. 19. The learned departmental representative has further relied on the decision of the Hon'ble Supreme Court in the case of ITO v. Mewalal Dwarka Prasad [1989] 176 ITR 529, in which the Hon'ble Supreme Court had held that it was not for the High Court to examine the validity of the notice under section 148 in regard to two of the items of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court with his changing moods. 21. The learned counsel has further relied on the decision of the Hon'ble Kerala High Court in the case of Rajeshwari Export House v. ITAT [1988] 171 ITR 519/37 Taxman 136 in which the Hon'ble High Court had held that even a High Court cannot, in exercise of its jurisdiction u/s 226 and 227 of the Constitution, give directions to the Appellate Tribunal as and when it takes a different view on the question of law earlier decided on reference made to it, to ignore the decision inter partes and dispose of the appeal in accordance with the later view, contrary to section 260(1) of the I.T. Act, 1961. 22. We have heard the parties at length and also carefully perused the entire facts on record. In this case certain facts are admitted. The assessee was once assessed for the assessment years 1968-69 and 1969-70 on 5-1-1973. Notices under section 148 read with section 147(a) were issued on 12-3-1976. Four specific amounts were mentioned in the notice for the assessment year 1968-69 and six were mentioned in the notice for assessment year 1969-70. The assessee had gone in writ before the Hon'ble High Court and in which the Hon'ble Court had specifical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment. This very direction itself shows that it was in conformity with the view expressed by the Hon'ble Supreme Court in Mewalal Dwarka Prasad's case. The learned counsel for the respondent has pointed out that there are plethora of judgments on the point that after 4 years only those items can be included in the re-assessment reopened under section 147(a) in which there was non-disclosure of the facts fully and truly. Some of them are mentioned :--- 1. New Kaiser-I-Hind Spg. Wvg. Co. Ltd. v. CIT [1977] 107 ITR 760 (Bom.), 2. AL.VR.ST. Veerappa Chettiar v. CIT [1973] 91 ITR 116 (Mad.), 3. Hiralal v. CIT [1980] 121 ITR 89 (Guj.), 4. Asa John Devinathan v. Addl. CIT [1980] 126 ITR 270 (Mad.), 5. CIT v. Mrs. Ayodhyakumari [1985] 154 ITR 604 (Raj.), 6. Ganga Saran Sons (HUF) v. ITO [1981] 130 ITR 212 (Delhi), 7. I.B.M. World Trade Corpn. v. N.D. Bhatt, IAC [1982] 138 ITR 742/9 Taxman 82 (Bom.), 8. Sunrolling Mills (P.) Ltd. v. ITO [1986] 160 ITR 412/27 Taxman 594 (Cal.), 9. Sir Shadi Lal Sons v. CIT [1973] 92 ITR 453 (All.). 23. In these appeals there is one special thing which completely supports the decision arrived at by the learned CIT(Appeals) and that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the framers of law. 24. The Hon'ble Court very clearly for both the years had held that the ITO will only be entitled to proceed with the assessment on the basis of the notice under section 148 of the IT Act in respect of other items mentioned in the same. Once the instructions were clear as to for what the revenue was restrained and for what the revenue was directed to bring to tax, in our humble opinion, there was no more power left to the revenue/assessing officer to bring certain other items to tax. In fact, the Hon'ble Supreme Court in the case of Rao Thakur Narayan Singh had gone to the extent that even if an order had been passed against revenue by the Tribunal, by mistake and it has become final by not going in appeal. The revenue/assessing officer was bound to follow that order irrespective of the mistake committed by the Tribunal. It is the principle of finality which has to be respected. With all these facts and observations, we are of the opinion that the order of the learned CIT(Appeals) was perfectly correct and justified and in fact, the order of the assessing officer almost bordered at the stage of contempt of Hon'ble High Court. The issues are, therefore, decid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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