TMI Blog1994 (2) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... letter in this behalf to the assessee on 10-8-1990 which had been received by the assessee on 14-8-1990. 4. On 22-8-1990 the Income-tax Officer recorded his reasons of belief as he was of the view that income chargeable to tax had escaped assessment on account of certain factors and he had decided to reopen the assessments. A record was made on the aforementioned date and he reopened the assessments. 5. Notices under section 148 had been issued on the same date in respect of both the assessments. Apparently they had been received by the assessee. Subsequently, the Income-tax Officer passed reassessment orders whereby he made additions. There were certain cash credits and in the view of the Income-tax Officer there was no plausible explanation by the assessee. The additions were made under section 68 in both the reassessments. We do not go into the figures as they are not very material for the purpose of this order. 6. The assessee had appealed from the reassessments and they were dismissed by the Commissioner of Income-tax (Appeals) who passed separate orders. But the reasons are more or less the same. 7. The assessee has brought these appeals to the Tribunal and before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to tax had escaped assessment in the earlier years also though the assessments were under section 143(1). 11. On 2-7-1990 the Income-tax Officer had addressed a letter to the Dy. Commissioner of Income-tax which also goes to show that he had reasonably doubted the genuineness of the cash credits. It is not necessary that all the facts that came to the notice of the Income-tax Officer should be incorporated in the record he is required to make under section 148(2). From the facts of this case we are satisfied that the Income-tax Officer had reasonably formed the belief that income chargeable to tax had escaped assessment and the pre-condition to the exercise of jurisdiction under section 147 is fulfilled. 12. We now consider the other objection taken by Shri Venkatesan. To state facts, the notices under section 148 issued to the assessee (firm) called upon it to deliver "within thirty days from the date of service" of those notices returns in the prescribed form as the Income-tax Officer proposes to reassess the income for those years. Shri Venkatesan's argument was that these notices which prescribed a period of thirty days were invalid in law and consequently the reassess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ument was that the notices issued in the instant cases are defective particularly in the light of the decision of the Karnataka High Court in the case of Winter Care (P.) Ltd. and the consequential reassessments are a nullity. He invited our attention to the passages in the commentary of Chaturvedi and Pithisaria (4th Edn., Vol. III, pp. 3669-70) and also invited our attention to case law to which we will presently make a reference. Before that it is necessary to point out one thing. 19. Under section 34 of Income-tax Act, 1922, reopening of the assessment or for making an assessment of income which had escaped assessment could be made and this provision corresponds to section 147 of Income-tax Act, 1961. According to section 34 a notice was required to be issued including all or any of the requirements under section 22(2) which stipulated a period not less than thirty days. The requirements under the 1922 Act are the same as the requirements of section 148 of 1961 Act after amendment by Direct Tax Laws (Amendment) Act, 1989, which is effective from 1-4-1989. This position is indisputable. 20. In the case of Y. Narayana Chetty v. ITO [1959] 35 ITR 388 the Supreme Court consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Fifth ITO [1965] 56 ITR 250; and the decision of the Allahabad High Court in the case of Mir Iqbal Husain v. State of UP [1964] 52 ITR 625. 23. To our knowledge there is no case law falling on the other side of the line. Neither any was cited. 24. Shri Puniha's argument was that an assessee could waive a notice to be issued under section 148(1) and in this behalf he cited the decision of the Andhra Pradesh High Court in the case of Gudivada Madhava Rao v. ITO [1959] 35 ITR 481; the decision of the Supreme Court in the case of Director of Inspection of Income-tax (Investigation) v. Pooran Mall Sorts [1974] 96 ITR 390; and the decision of the Smt. Lalita Todi v. CIT [1980] 123 ITR 40. In the case of Uppala Nookaiah Chetty v. Addl. ITO [1959] 35 ITR 483 (AP). Kumarayya, J. held: "... that although the assessees had after a final assessment the right not to be assessed to an enhanced tax save in cases falling under sections 34 and 35, that right was for their personal benefit and could be waived; and as the assessees knowingly waived that right by agreement they must be deemed to have relinquished it." 25. The case of Pooran Mall Sons related to proceedings of search and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... courts were to hold, on the ground of reasonableness, that notice giving twenty-nine or thirty days is a curable defect, then virtually we would be drawing a line different from that drawn by the statute. If validity of the notice is to be judged it should be strictly in reference to the conditions irrespective of the period allowed by the Income-tax Officer. 30. It was argued that the assessee had filed returns, paid tax and that it had waived the notice. Mere compliance of the notice by the assessee will not amount to waiver of the defect as pointed out by the authorities to which we have made a reference already. The Bombay High Court points out in the case of Ramsukh Motilal that there cannot be a waiver to illegality in notice. There cannot be a waiver to cover an omission of a step which the statute regards as a condition precedent to the exercise of jurisdiction under section 147 and there could be no waiver of illegality to validate an assessment made pursuant to a defective notice. This is the law stated by the Calcutta High Court in the case of CAIT v. Sultan Ali Gharami [1951] 20 ITR 432 and by the Kerala High Court in the case of Amalgamated Coffee Estates Ltd. 31. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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