TaxTMI 
TaxTMI 
2007 (2) TMI 282
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....tion dt. 22nd Jan., 1990 had not been taken into consideration in the assessment orders passed by the AO under s. 143(1) dt. 22nd Feb., 1990. As the additional income offered by the assessee for the relevant assessment years were of Rs. 5,000 only, no notice could validly be issued under s. 148 and the notice issued by the AO on 1st Feb., 1999 lacked valid jurisdiction. 3. On the facts and in the circumstances of the case, the CIT(A) erred in ignoring the fact that the notice issued by the AO dt. 1st Feb., 1999 was validly issued for asst. yrs. 1988-89 and 1989-90 as the income to the extent of Rs. 2,28,040 and Rs. 5,05,780 for asst. yrs. 1988-89 and 1989-90 has escaped assessment which was ascertained after verification of the seized records, as such, the assessments for asst. yrs. 1988-89 and 1989-90 were validly reopened by the AO by invoking the provisions of s. 147 of the IT Act to tax the escapement of income on account of investment, with prior approval of the Jt. CIT, Range-3, Aurangabad, which was accorded on 15th Jan., 1999. 4. On the facts and in the circumstances of the case, the order of the CIT(A) may be vacated and that of the AO be restored. 5. On the facts and i....
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.... 2,000 5 1988-89 5,000 6 1989-90 1,23,827 ----------------------------- Total 1,54,327 ----------------------------- 6. The assessee filed returns in response to the notices under s. 148 dt. 20th April, 1989 for asst. yrs. 1985-86, 1986-87, 1987-88, 1988-89 and 1989-90 as under: ----------------------------- S.No. A.Y. Total Income returned (Rs) ----------------------------- 1 1985-86 65,090 2 1986-87 2,10,630 3 1987-88 78,620 4 1988-89 4,35,830 5 1989-90 6,51,670 ----------------------------- 7. In the aforesaid returns the income aggregating to Rs. 1,54,327 offered vide letter dt. 22nd Jan., 1990 was not shown. These returns were accepted by the AO under s. 143....
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....o the post-1989 s.147. 11. Where the said period of four years has not expired, the conduct of the assessee regarding disclosure of material facts need not be the basis for initiating the proceedings and they can be commenced if the AO has reason to believe that the income has escaped assessment notwithstanding that there was full disclosure of material facts on record. The assessee in such cases cannot defend the initiation of action on the ground that the facts were already placed on record and that the AO must have or ought to have considered them. The power to make assessment or reassessment, where the initiation has been made within four years of the end of the relevant assessment year, would be attracted even in cases where there has been a complete disclosure of all relevant facts upon which a correct assessment might have been based in the first instance, and whether it is an error of fact or law that has been discovered or found out justifying the belief required to initiate the proceedings. 12. Where, however, the initiation of proceeding under s. 147 takes place after the expiry of four years from the end of the relevant assessment year, the proviso to the s. 147 is at....
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....xistence right upto the time of assessment cannot possibly be disclosed. 18. Further, if such material facts are disclosed, the acceptance of a wrong contention raised by an assessee does not create jurisdiction for initiation of proceedings under s. 147. The inferences or conclusions that can reasonably be drawn from the primary facts are not to be stated by the assessee. 19. In the case of CIT vs. Burlap Dealers Ltd. (1971) 79 ITR 609 (SC), the Supreme Court observed that if the assessee had disclosed primary facts relevant to the assessment, he was under no obligation to instruct the AO about the inference which the AO may draw from those facts. If on the evidence and the materials produced the AO could have reached a conclusion other than the one which he has reached, a proceeding under s. 147 will not lie merely on the ground that the AO has drawn an inference which he may later regard as erroneous. 20. A different conclusion or inference at a later time whether it is arrived at upon the facts disclosed or on fresh facts gathered as a result of further enquiry will not justify action under s. 147, if the fresh facts are not primary facts which existed at the time of assessm....