TMI Blog2007 (8) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... ued 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 ----------- Additional Declaration income under section 69 of the Act 3,385,000.00 ------------ Total 3,630,846.00 Add: Agricultural income 60,000.00 ------------ Gross Total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther assets ------------------------------------------------------------------ Description Name in Amount Remarks of assets which Rs. held ------------------------------------------------------------------ 1. Rs. 70,000 1983-84 Building Shankar 70,000 R. Mhatre ------------------------------------------------------------------ 2. Rs. 4,32,000 1984-85 -do- -do- 4,32,000 ------------------------------------------------------------------ 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 ..... o, 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 declaration clearly shows that the income in question pertains to earlier years, in effect, the Assessing Officer has brought to tax income from house property from assessment years from 1983-84 to 1996-97 and investments made "in earlier year, that too without granting statutory deductions in a single year, i.e. assessment year 1998-99. The very foundation for bring to tax the income is the declaration given before the err by the assessee under VDIS Act. This material has to be taken in its entirety and all facts recorded in such declaration should also be considered in its entirety and law is to be correctly applied to these facts. The years of investment and the years in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 Income-tax Act, 1961. It is true that it was at a later stage that such contention was raised by the petitioner, but the said contention was a pure question of law and the Commissioner of Income-tax ought to have considered the said contention on its merits and ought not to have declined to entertain it on the ground of delay. There cannot be any estoppel against the statute, article 265 of the Constitution of India in unmistakable terms provides that no tax shall be levied or collected except by authority of law. Acquiescence cannot take away from a party the relief that he is entitled to where the tax is levied or collected without authority of law. The Constitution Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iming 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 rely upon any such admission or misapprehension if it is not otherwise taxable." Thus even if it is held that the assessee had suo motu filed his return of income declaring additional income, it is no ground for bring to tax the income not pertaining to the year to tax in this year as made by the Assessing Officer. Thus for all these reasons we have to necessarily hold that the addition in question has to be deleted for the reason that it does not pertain to the impugned previous year relevant to the assessment year 1998-99 and the Assessing Officer has no authority to tax the same in this year. 8. Coming to the issue of reopening, we have to necessarily hold tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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