TaxTMI 
TaxTMI 
2004 (6) TMI 257
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....der of learned CIT(A)-I be set aside and that of the AO be restored." 3. The facts related to the issue as appearing from the orders of authorities below, in brief, are that the assessee filed his return of income for both the assessment years, i.e., 1988-89 and 1989-90 on 25th April, 1990 vide receipt Nos. 23 and 24, respectively, and declared an income of Rs. 14,550 which included 20 per cent share profit from Punjab Soap Factory amounting to Rs. 19,653 for the asst. yr. 1988-89 and similarly for the asst. yr. 1989-90, income was declared at Rs. 38,950 which included 25 per cent share of profit from Punjab Soap Factory. Both these returns were processed under s. 143(1). Later on, notice under s. 148 was issued on 31st May, 2000, which was returned by the learned counsel for the assessee on the plea that the notice issued was bad in law and was barred by limitation within the meaning of sub-cl. (iii) of cl. (b) of sub-s. 1 of s. 149 of IT Act, 1961, and the non-struck off of assessment/reassessment leading to irrefutable conclusion that there was no reason to formation of belief under s. 147 of IT Act, 1961. AO thereafter issued notice under s. 142(1) dt. 24th Aug., 2000 which ....
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....54 CTR (Del) 355 : (1998) 234 ITR 170 (Del) (v) Calcutta Discount Co. Ltd. vs. ITO & Anr. (1961) 41 ITR 191 (SC) (vi) S. Narayanappa & Ors. vs. CIT (1967) 63 ITR 219 (SC) (vii) Balchand vs. ITO (1969) 72 ITR 197 (SC) (viii) ITO & Ors. vs. Lakhmani Mewal Das 1976 CTR (SC) 220 : (1976) 103 ITR 437 (SC) (ix) Ganga Saran & Sons vs. ITO & Ors. (1981) 22 CTR (SC) 112 : (1981) 130 ITR 1 (SC) (x) Phool Chand Bajrang Lal & Anr. vs. ITO & Anr. (1993) 113 CTR (SC) 436 : (1993) 203 ITR 456 (SC) (xi) Associated Stone Industries Ltd. (Kotah) vs. CIT (1997) 138 CTR (SC) 260 : (1997) 224 ITR 560 (SC) It was further submitted that basic prerequisite conditions for reopening under s. 148 had not been complied with by the AO for exemption (sic-assumption) of jurisdiction to proceed with the case and also no reasons had been recorded whatsoever as mandated as per sub-s. (2) of s. 148 for escapement of any income. It was also stated that the substitution/rectification of assessee's share of profit from the firm would not fall within the meaning of any income having escaped assessment. 5. Learned CIT(A), after considering the submissions of the assessee, held that the action t....
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....ered by the learned CIT(A) who held that it was not permissible and the Department had not raised any ground against that observation of the learned CIT(A), hence, these appeals became infructuous. Reliance was placed on the judgment of Hon'ble Supreme Court in the case of K.M. Sharma vs. ITO (2002) 174 CTR (SC) 210 : (2002) 254 ITR 772 (SC). 8. We have heard both the parties at length and also gone through the material available on record. In the present case, it is noticed that learned CIT(A) in para 3 of the impugned order observed as under: "Nevertheless, in deference to the plethora of judgments cited by the learned counsel, I have no alternative but to hold that reopening in the manner attempted by the AO was not permissible in the cases. The appellants succeed on this issue too." Admittedly, the Department had not challenged the above observation of learned CIT(A). On that (score) alone, these appeals of the Department can be dismissed. In the instant case, it is not in dispute that the AO reopened the assessment only on the basis of order of Settlement Commission which is dt. 29th March, 1996. It is also noticed that the copy of the said order was forwarded to the ....
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....ssion was different and distinct from the assessee in this case. The order passed by the Settlement Commission could not be construed to be an order passed under this Act by way of appeal, reference or revision so as to necessitate reassessment for the asst. yr. 1981-82. Sub-s. (2) of s. 150 of the Act makes it quite clear that the provisions of sub-s. (1) shall not apply in any case if the order which was the subject-matter of the appeal, reference or revision could not have been made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken. It, therefore, follows that if the original order which was the subject-matter of the appeal, reference or revision could not have been passed when it was purported to have been passed by reason of its being barred by limitation, the same cannot be revived under sub-s. (1) of s. 150. In the instant case, that question did not arise, because there was no assessment order for the asst. yr. 1981-82 which had been taken in appeal, reference or revision before any authority under the Act. The order of the Settlement Commission might have only justified issuance of the noti....