TaxTMI 
TaxTMI 
2017 (1) TMI 813
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....of Rs. 4,044/- being the unexplained donation. (viii) Confirming the addition of Rs. 2,50,000/- being the unexplained investment in the shares of Reliance Industrial Ltd. (ix) Confirming the addition of Rs. 50,000/- being the unexplained household expenditure. 3. Brief facts of the case are that a search was carried on assessee's premises u/s 132 on 03.12.1993 and 04.12.1993. On the date of search, the return of income for A.Y. 1994-95 was not due as the previous year had not ended. A notice under section 142(1) dated 19.12.1994 was issued for filing the return of income, followed by a notice under section 148 dated 27.07.1995; in response to which the assessee filed return of income on 05.12.1996 declaring total income of Rs. 5,65,660/-. 3.1 The reassessment proceedings were also commenced by the Assessing Officer by issuing various notices u/s. 142(1) and 143(2) and during the course thereof, the assessee filed the required details from time to time. As per the law, the assessment order should have been passed on or before 31.03.1998 being the limitation allowable. The Assessing Officer instead issued yet another notice u/s. 148 dated 10.03.1998, which was served on 1....
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....998 and thus, the issue of notice u/s.148 dated 10/03/1998 is bad in law as on this date the original assessment has not come to an end. The present assessment being based on notice u/s.148 dated 10/03/1998 is barred by limitation and thus requires to be cancelled." 6.1 The ITAT in ITA No.475/Ahd/2001 vide its order dated 03.04.2006 held that the additional ground is pertaining to legal issue and hence in the interest of justice the same is admitted and accordingly the matter was sent back to the file of the ld. CIT(A) to decide the issue in accordance with law after verifying the various dates and providing reasonable opportunity to the assessee. 7. The ld. CIT(A), in set-aside proceedings pursuant to ITAT's order and after considering the submission filed by the assessee, called for a report from the Assessing Officer. The AO furnished the report dated 22.08.2012, a copy thereof was provided to the assessee. The assessee filed a rejoinder dated 04.09.2012 disputing the findings of the AO. Ld. CIT(A), however, held that the reassessment proceedings had been validly initiated in accordance with law and he, therefore, rejected the legal ground raised on the following observati....
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.... applicable to the facts of the instant case. 4.8 Accordingly, the additional ground of appeal filed by the appellant for the first time before the Tribunal and restored by the Tribunal for adjudication to this office is dismissed." 8. Aggrieved, the assessee is in second appeal. The ld. Counsel for the assessee after reiterated the facts and arguments raised before the ld. CIT(A), it was stressed that the first notice issued u/s. 148 on 27.07.1995 was valid in law since consequence proceedings were pending and neither reassessment proceedings were dropped nor reassessment was framed within the time limit relatable to this 148 notice. The second notice issued u/s. 148 dated 10.03.1998 was invalid in the eyes of law and the assessment order framed on the extended time limit based on untenable second notice u/s. 148 dated 10.03.1998 is bad in law. 8.1 Reliance placed on the judgment of the Hon'ble Allahabad High Court in the case of G.P. Agarwal vs. ACIT, reported in 208 ITR 795, relied upon by the CIT(A) is irrelevant and not applicable to the facts of the assessee's case. In that case, remedy for rectification was available and hence the WP was dismissed on the ground of a....
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....ssing Officer to issue notice under section 148 of the Act. Expressed in different thoughts and language, the central concept being that when a return is filed, assessment is either being done or could be carried out by issuing notice under section 143 of the Act for which time limit has not expired, in such a case, there would be no question of income chargeable to tax having escaped assessment. Only upon completion of the assessment, or if not taken in scrutiny, upon completion of the period during which it can be scrutinised, the question of income having escaped the assessment would arise. Since the invocation of power under section 147 of the Act depends on the Assessing Officer's reason to believe that income chargeable to tax had escaped assessment, no such belief could be formed till the return is pending assessment. 6. In our case, the situation is during the pendency of first notice of reassessment, the Assessing Officer recorded separate reasons and issued a fresh notice for reassessment. Though this is not a case where the original assessment itself was pending when the notice for reopening was issued and in this context, as noted, some of the High Courts have dr....