9911796707
TMI Blog2007 (8) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... uildings totally valued at Rs. 33,85,000, but did not pay the tax on the assets so disclosed. Based on the information received, the Assessing Officer reopened the proceedings under section 147 and issued notice under section 148 dated 24-3-2005. The assessee had, in response to notice under section 148, filed a revised return of income for the assessment year 1998-99 on 20-7-2005 declaring the total income of Rs. 36,30,843 which included the additional income of Rs. 33,85,000 under section 69 of the Income-tax Act, which was subject to a note annexed. The computation of income as per page 3 of the assessment order is extracted for ready reference:- COMPUTATION OF INCOME "Net income as per Original return shown (i) House property 237,236.00 (ii) Other sources 8,610.00 245,846.00 &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vised." After considering the detailed submissions of the assessee, the Assessing Officer made an addition of Rs. 33,85,000 under section 69 of the Act. On appeal, the first appellate authority upheld the order of the Assessing Officer. Further aggrieved, the assessee is before us. 4. We have heard Sri N.A. Kulkarni on behalf of the assessee and Sri D.K. Rao on behalf of the revenue. The assessee challenged the impugned order on the following grounds:- (a) that reopening is bad in law; and (b) that the addition made under section 69 based on VDIS declaration is bad in law. 5. We first consider the merits of addition made. We can find from computation of income filed by the assessee, that a clear note has been given that, he had earned and invested funds which relate from the last so many years and that the same do not pertain to the impugned assessment year. In short, what was stated here is that the income in question does not pertain to the previous year relatable to the assessment year 1998-99. The statement of VDIS income at pages 34 and 35 of assessee's paper book reads as under:- ANNEXURE TO FORM OF DECLARATION UNDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... --------------------------------------------------- 3. Rs. 3,23,000 1985-86 -do- -do- 3,23,000 ------------------------------------------------------------------ 4. Rs. 3,23,000 1986-87 -do- -do- 3,23,000 ------------------------------------------------------------------ 5. Rs. 4,72,000 1987-88 -do- -do- 4,72,000 ------------------------------------------------------------------ 6. Rs. 2,14,000 1988-89 (i) building -do- 73,600 (ii) building Parara- 47,800 tibia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; - 15,000 from house property ------------------------------------------------------------------ 9. Rs. 45,000 1991-92 -do- Shankar 5,000 -do- &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; 1,95,000 ------------------------------------------------------------------ Rs.33,85,000 Rupees Thirty-three lakhs eighty-five thousand only ------------------------------------------------------------------ 6. A perusal of the above clearly shows that none of these assets have been acquired by the assessee during the previous year relatable to the assessment year 1998-99. While so, the entire income in question is brought to tax during the impugned assessment year. In our considered opinion, this is not legally correct to tax this income in the year under appeal. Looking at the description of the assets, they are buildings in most of the cases and only in two cases reference is made to vehicles. The income from buildings has been declared year-wise. While so, the entire income is sought to be brought to tax in a single year, though the statute does not permit the same. Though VDIS declarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier years, in this year. Even if it is held otherwise, the filing of the return is a fundamental error of law on the part of the assessee, and that is no ground for bringing to tax, an amount which is not otherwise taxable during the impugned assessment year under the provisions of the Income-tax Act. It is well-settled that there cannot be estopped against the statute and Article 265 of the Constitution of India in unmistakable terms provided that no taxes shall be levied or collected except by authority of law. Acquiescence cannot take away from a party the relief he is entitled to when tax is levied or collected without authority of law. The jurisdictional High Court in the case Nirmala L. Mehta v. A. Balasubramaniam, CIT [2004] 269 ITR 1 (Bom.) at page 11, observed as follows:- "The problem arose because the petitioner in her return for the assessment year 1988-89 filed on 30-6-1988, offered the prize money of the lottery to tax rather a fundamental error of law on the part of the assessee, but that error of law once detected by the petitioner, it was urged before the Commissioner of Income-tax that the prize money earned by the petitioner could not be taxed under the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction of section 3 of the Wealth-tax Act, in the strict sense it is enacted. There cannot be any ambiguity in a charging section. If two views are possible, the one beneficial to the assessee is to be adopted. Unless a property is chargeable under the charging section, no tax can be levied thereupon." "10. Thus, unless the definition of 'net wealth' read with the definition of 'asset' as provided in section 2(m) and section 2(ea), respectively, includes a building let out to a tenant used for commercial purposes, the same cannot be subjected to wealth-tax. Even if the assessee had included the same in his return, that would not preclude the assessee from claiming the benefit of law. There cannot be any estoppel against statute. A property, which is not otherwise taxable, cannot become taxable because of misunderstanding or wrong understanding of law by the assessee or because of his admission or on his misapprehension. If in law an item is not taxable, no amount of admission or misapprehension can make it taxable. The taxability or the authority to impose tax is independent of admission. Neither there can be any waiver of the right by the assessee. The Department cannot r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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