9911796707
TMI Blog2007 (4) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... valid in law", raised the following question: Whether on the facts and circumstances of the case, the proceedings under s. 147 initiated on the basis of a notice under s. 148 issued by the AO during the pendency of rectification proceedings under s. 154, were valid in law, more particularly, when the notice under s. 148 was issued for the same reasons as for which the notice under s. 154 was issued? 2. Shri Pai, learned counsel for the assessee, contends that it is answer to this question, that he has posed for us, which will decide whether or not the appellant deserves to succeed in the appeal. He contends that all the relevant facts are already on record, that no further investigation of facts is needed, that the assessee is entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion raised is a pure question of law, and as it arises on admitted facts on record, we deem it fit and proper to admit the legal plea of the assessee and proceed to adjudicate on the same. The objections raised by the Revenue are overruled. 4. The impugned CIT(A)'s order is dt. 20th May, 2002 and the relevant assessment is framed under s. 143(3) r/w s. 147 of the IT Act, 1961, for the asst. yr. 1997-98. 5. So far as the additional plea, which we propose to deal with first is concerned, the relevant facts are like this. The original assessment was completed under s. 143(1)(a) vide intimation dt. 9th March, 1998. On 16th Oct., 1998, however, the AO required the assessee to show cause as to why, inter alia, the following mistake not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter dt. 14th Nov., 1995, 22nd Dec., 1995 and 8th Feb., 1996. Thereafter, despite follow up, the balance outstanding was not paid. In fact there is total silence and the approach by the company, Jasfin Investments (P) Ltd., is one of evasive nature. It was therefore ultimately written off as bad debts in the financial year 1996-97 corresponding to asst. yr. 1997-98. 3. We invite your reference to the provisions of s. 36(i)(vii) and s. 36(2) by which the debt can be written off once the assessee determines it to be irrecoverable. The only other condition is that the income should have been disclosed and that the debt should be written off. In our case both these conditions are satisfied and hence the bad debts should be allowed. Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drop the proceedings." 7. Even as there was no further communication by the AO on the response submitted by the assessee, a notice was issued on 20th Feb., 2001 for reassessment of the income escaping assessment. In the reasons recorded by the AO, under s. 147 of the Act, it was stated that: "(1) The bad debt of Rs. 14,00,000 was wrongly allowed in order under s. 143(1)(a). This amount is pertaining to income from other sources as admitted by the assessee in the return of asst. yr. 1996-97 vide order under s. 143(3) dt. 7th Sept., 1998. The AO has already taxed income arising out of share financing at Rs. 6,10,869 as income from other sources. This is in conformity with the return filed by the assessee, which is accepted by the AO. Subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment generally includes all proceedings, and that the expression 'assessment' is used in the Act in a comprehensive sense and includes all proceedings starting with filing of the return or issuance of notices and ending with the determination of tax payable by the assessee. Our attention is then invited to the judgment of Hon'ble Calcutta High Court in support of the proposition that proceedings under s. 154 are proceedings of assessment A reference is then made to the judgment of Hon'ble Madras High Court in the case of CIT vs. E.I.D. Perry Ltd. (1995) 216 ITR 489 (Mad) in support of the contention that if the AO takes recourse to one of the sections, i.e., s. 147 or s. 154, and gives up later, the recourse to another i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent proceedings are quite distinct from the same and there cannot be any bar on the reassessment proceedings on the ground that rectification proceedings for prima facie adjustments are pending. Learned Departmental Representative thus submits that the contentions of the assessee are not tenable in law, and we must reject the same. 9. Having given our careful consideration to the rival contentions as also the applicable legal position, we find that the plea of the learned counsel is indeed sustainable in law and merits acceptance. In the case of Trustees of H.E.H. Nizam Trust, Hon'ble Supreme Court has held that unless the assessment proceedings are completed, there cannot be any question of income escaping assessment. In the case of C ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
