TaxTMI 
TaxTMI 
2006 (4) TMI 87
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....the case, whether the Tribunal was justified in restricting the interest levied under section 139(8) and under section 217(1A) of the Act to the figures in original assessment?" The brief facts leading to this reference are as under: The assessee is manufacturing aluminium and steel vessels in his factory. He filed his return of income for the assessment year 1972-73 declaring the total income of Rs. 32,500 from business. The assessment was completed at the figure of Rs. 53,500 by adding a sum of Rs. 21,000 towards donations, the source of which was not disclosed by the assessee. As the aforesaid donation was not disclosed, penal action, for concealment of income was ordered and a sum of Rs. 3,080 and Rs. 5,714 under section 139(8) and section 217(1A) of the Act was imposed as interest and the total tax payable by the assessee was Rs. 25,293. Later in the course of search conducted in the premises of the assessee, certain documents were seized. It is seen that the assessee had purchased a site property bearing Nos. 4 and 32, situated at BVK Iyengar Road, Bangalore on January 5, 1971, for a sum of Rs. 80,000. The total cost of the site including registration came to Rs. 1,05,000.....
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....section 148 of the Act are without jurisdiction. Elaborating this submission he contended that since the assessee had given the information in the wealth-tax return with regard to the acquisition of site, it cannot be said that there was non-declaration of property by the assessee and that the Department discovered it at the time of search and seizure. It is his further submission that since the information was already available with the Assessing Officer, if at all the Assessing Officer intended to reopen the assessment, he should have done it within four years in terms of section 147(b) of the Act and he could not have invoked the power conferred on him under section 147(a) of the Act. In support of this submission, he relied upon the Division Bench decision of this court in the case of Venkatesh Power Works v. CIT reported in [2005] 278 ITR 436. Secondly, he submitted that no interest for the delay in filing the return would be levied and in support of the said contention, he relied upon the Division Bench decision of this court in the case of ITO v. K.L. Srihari (HUF) reported in [1992] 197 ITR 694, which judgment according to him, is affirmed by the Supreme Court in the case o....
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.... submissions, the two points that arise for consideration are: (i) Whether in the facts and circumstances of the case, it can be said that the assessee has suppressed the acquisition of site before the subject-matter of reopening of assessment? (ii) Whether the assessee is not liable to pay interest for delay in filing the returns originally as well as for not disclosing the income in the said return? In so far as the duty of the assessee to disclose all the income is concerned, a Division Bench of this court in the case of Venkatesh Power Works v. CIT reported in [2005] 278 ITR 436 has held that a duty is cast on the assessee to disclose the primary facts necessary for assessment. If the assessee has disclosed the primary facts, it is for the Assessing Officer to make the necessary enquiries and draw proper inferences as to whether the income returned is correct or not. Further it has been held that, it would be the plain duty of the Assessing Officer to make an enquiry and if he did not make an enquiry, it is a case of oversight and it could not be said that the income chargeable to tax had escaped assessment by reason of the omission or failure on the part of the assessee to ....
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....such reopening of the said assessment, all that the Income-tax Officer has done is to add this income to the income which was already assessed. He has not set aside the original assessment done. It is in that context the question for consideration is, whether the interest levied for delay in filing the return and for suppressing the income is also liable to be set aside merely because no interest could be levied after reopening of the assessment. The learned counsel for the parties relied on several judgments in this regard which needs to be noticed. In the case of Charles D' Souza v. CIT [1984] 147 ITR 694, a Division Bench of this court dealing with the question whether the interest under sections 139(8) and 217 of the Act could be levied in a case where the assessment is done under section 147, held that, there can be levy of interest only in cases of regular assessment as defined by section 2(40) of the Act. The expression "regular assessment" as defined by section 2(40) means assessment made under section 143 or section 144 in contradistinction to assessments/reassessment under section 147. When the expression "regular assessment" is defined to mean only assessments made und....
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....sment ceases to be operative. The effect of reopening the assessment is to vacate or set aside the initial order of assessment and to substitute in its place the order made on reassessment. The initial order of reassessment cannot be said to survive, even partially, although the justification for reassessment arises because of turnover escaping assessment in a limited field or only with respect to a part of the matter covered by the initial assessment order. The result of reopening the assessment is that a fresh order of reassessment would have to be made including for those matters in respect of which there is no allegation of the turnover escaping assessment. Therefore, the aforesaid judgment of the Supreme Court was in the context of the factual position that the assessment orders made under section 12A were comprehensive orders and were not confined merely to matters which had escaped assessment earlier. In those circumstances, it was held the only orders which could be the subject-matter of revision by the appellant were the orders made under section 12A of the Act and not the initial assessment orders. Following the aforesaid judgment, yet another Division Bench of this cou....