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of <h1>Invalid Initiation of Proceedings under Kerala Agrl. IT Act; Assessments Upheld; Fraudulent Lease Deeds</h1> The Court held that the initiation of proceedings under section 35 of the Kerala Agrl. IT Act, 1950 was invalid as the successor officer's disagreement ... Change Of Opinion Issues involved: The judgment involves two common questions of law referred by the Kerala Agricultural Income-tax Tribunal regarding the initiation of proceedings under section 35 of the Kerala Agrl. IT Act, 1950 and the assessments of income derived from leasehold land.Initiation of Proceedings under Section 35:The Tribunal upheld the initiation of proceedings under section 35 by the successor officer, challenging the lease arrangement previously accepted by the predecessor officer for the year 1971-72. The predecessor officer had assessed the income based on the lease agreements, but the successor officer deemed the leases as sham documents, leading to reassessment. The Court ruled that a mere change of opinion by the successor officer does not justify invoking section 35, especially when the predecessor officer had already considered and accepted the lease agreements. The Tribunal's reliance on additional grounds not available to the initiating officer was deemed unjustified, and the initiation of proceedings under section 35 was held invalid.Assessments for 1971-72 and 1972-73:The Tribunal upheld the assessments for the years 1971-72 and 1972-73, where the authorities found the lease deeds to be fraudulent and the assessee to be in continued possession of the entire plantation post the lease agreements. The Court supported the Tribunal's decision, stating that valid reasons were provided for concluding that the lease deeds were sham and created to evade tax liability. The Court ruled in favor of the Department regarding the assessments for these years.Conclusion:The Court answered the first question regarding the validity of reassessment for 1970-71 in favor of the assessee, highlighting the lack of valid grounds for initiating proceedings under section 35. The second question concerning the assessments for 1971-72 and 1972-73 was answered in favor of the Department, affirming the Tribunal's decision. Each party was directed to bear their respective costs, and a copy of the judgment was to be forwarded to the Tribunal as required by law.
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