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TMI Blog1984 (3) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... interest of Rs. 647 credited to the account of the said Shri Patodia vide reassessment order dated 27-2-1975. The reopening of the assessment was challenged by the assessee before the AAC. The AAC set it aside on 26-7-1975. The department thereupon took the matter to the Tribunal who held vide, their order dated 25-9-1976 that the provisions of clause (a) of section 147 did not apply to the facts of the case because there was no material on record which could form the basis for entertaining the belief by the ITO that the assessee's income had escaped assessment. The reopening was, thus, quashed by the Tribunal. Thereafter the ITO summoned Shri Patodia under section 131 of the Act on 20-7-1977 and enquired of him whether he had given any loan to East India Rubber Works (P.) Ltd. in the accounting period corresponding to the assessment year 1962-63. Shri Patodia deposed on oath that he had never advanced Rs. 50,000 to East India Rubber Works (P.) Ltd. at any time and that he had merely lent his name to the said company in consideration of a commission of 2 per cent per annum in respect of the sum of Rs. 50,000 for lending his name to the said loan. On the basis of the aforesaid state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be sustained. The assessment is quashed." 4. The department is now in appeal against the above finding of the Commissioner (Appeals). It was contended on behalf of the revenue by the learned departmental representative that the ITO could have initiated action for reassessment in the assessee's case within the prescribed time limit more than once. He relied on the following decisions in support of it Jagmohan Goenka v. K.D. Banerjee [1954] 26 ITR 637 (Cal.) and Gurdayal Berlia v. CIT [1966] 62 ITR 494 (Cal.). 5. It is pointed out by the learned departmental representative that the material on which the ITO formed his belief this time and initiated action under section 147(a) was different from what was available to him at the time when he had originally reopened the case under section 147. At that time the ITO might not have had material on record which could form the live link for the entertainment of the belief of escapement of income, but the same could not be said this time. The ITO has recorded statement on oath of the alleged creditor Shri Patodia who has categorically reposed on oath that he never gave the advance of Rs. 50,000 to the assessee-company. This statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be given to the findings of the Tribunal in such matters. 7. We have given careful consideration to the facts of the case and the rival submissions. The question of the finality of the assessment as a result of appellate orders was considered by their Lordships of the Supreme Court in the case of CIT v. Rao Thakur Narayan Singh [1965] 56 ITR 234 and it was observed by their Lordships in that case that ' the finding of the Tribunal, even though by mistake, that the officer could not initiate reassessment proceedings in respect of the interest income also, was binding on the Income-tax Officer and he could not reopen the assessment over again to include the interest income '. ' If that were not the legal position ' pointed out their Lordships, ' it would result in placing an unrestricted power of review in the hands of the Income-tax Officer to go behind the findings given by a hierarchy of Tribunals and even those of the High Court and the Supreme Court with his changing moods '. In the aforesaid case the ITO had made reassessment for the assessment year 1942-43 bringing to tax certain forest income and interest income. The assessee preferred an appeal to the Tribunal objecting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to the facts of the present case, we have to see whether the ITO was seeking to reopen the assessment in question by the presently impugned proceedings on the basis of the ' same material ' as was available to him at the time of the initial reopening of the assessment. If the material is the same, obviously the reopening would be bad. But, if the material on the basis of which reopening has been done is different from what was available to him earlier, it would not be possible to say in law that the ITO initiated action on the basis of the same material. The proposition that the ITO can make enquiries before reopening the assessment is supported by the decision of the Calcutta High Court in the case of Prahladrai Agarwalla v. ITO [1973] 87 ITR 655. The ITO, therefore, did not act against law when he summoned Shri Patodia and recorded his statement on oath. The recording of the statement on oath of a person on a positive subject cannot be equated with the making of fishing enquiries by the ITO. The aforesaid enquiry was a positive one and the ITO acted only when he had with him the statement of Shri Patodia to the effect that he had not given the alleged loan of Rs. 50,000 to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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