2004 (4) TMI 30

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.... the Tribunal was justified in affirming the Commissioner of Income-tax (Appeals) direction to carry forward the correct amount of deficiency under section 80J(3) of the Income-tax Act, 1961, when the Assessing Officer had already allowed in the original assessment order of the assessee such deficiency to be carried forward?" With respect to question No. 3 the admitted position is that the same does not require to be answered by this court as it merely pertains to the correct working out of the carry forward of deficiency under section 80J. With regard to question No. 1 the facts relevant are that the assessee filed its original return of income on February 19, 1974, and there was a delay in filing of the same by four months. The assessee filed another return on March 31, 1987, under the amnesty scheme and the assessment was completed. Notice under section 148 was issued and in response thereto it was stated that the return filed on March 31, 1987, is to be treated as compliance with the notice under section 148. Interest under section 139(8) of the Income-tax Act was found chargeable as the return was filed on February 19, 1974, with the delay of four months. It is the admitted ....

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.... assessment is reopened, the original assessment is "wiped out" and the assessee can put forward all pleas were considered by the Supreme Court in Sun Engineering Works P. Ltd. [1992] 198 ITR 297, and it was observed that the same support their conclusions relying upon the judgment of the Supreme Court in V. Jaganmohan Rao v. CIT and EPT [1970] 75 ITR 373, the Supreme Court, it was submitted by Mr. Mallick, examined the judgment in V. Jaganmohan Rao's case [1970] 75 ITR 373 and explained the same in the following terms: The principle laid down by this court in V. Jaganmohan Rao's case, therefore, is only to the extent that once an assessment is validly reopened by issuance of a notice under section 22(2) of the 1922 Act (corresponding to section 148 of the Act), the previous underassessment is set aside and the Income-tax Officer has the jurisdiction and duty to levy tax on the entire income that had escaped assessment during the previous year. What is set aside is, thus, only the previous underassessment and not the original assessment proceedings. An order made in relation to the escaped turnover does not affect the operative force of the original assessment, particularly if it ....

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....29 and more recently by a three-judge Bench in ITO v. K.L. Srihari (HUF) [2001] 250 ITR 193 (SC). True as contended by Mr. Khaitan in K.I. Srihari (HUF) [2001] 50 ITR 193 (SC), a three-judge Bench considered the following judgments: (1) CIT v. Sun Engineering Works P. Ltd. [1992] 198 ITR 297 (SC); (2) ITO v. Mewalal Dwarka Prasad [1989] 176 ITR 529 (SC); and (3) V. Jaganmohan Rao v. CIT and EPT [1970] 75 ITR 373 (SC). but observed that: "In these circumstances we do not consider it necessary to go into the question that is raised and the same is left open ..." It has been noticed in the said judgment that the special leave petitions had been directed to be placed before the three-judge Bench because it was felt that "dissonant views have been expressed by different Benches of this court on the scope and effect of reopening of an assessment under section 147 of the Income-tax Act, 1961. It has been pointed out before us that the matter has earlier been considered by a Bench of three judges in V. Jaganmohan Rao v. CIT and EPT [1970] 75 ITR 373 (SC) and the observations in the said case came up for consideration before two judges Bench of this court in ITO v. Mewalal Dwarka P....

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....ed whether a similar direction must or ought to be made as a measure of social justice. Precedents sub silentio and without argument are of no moment. Mere casual expression carry no weight at all, nor every passing expression of a judge, however eminent, can be treated as an ex cathedra statement having the weight of authority." Having heard learned counsel for the respective parties, we are respectfully of the view that in K.L. Srihari (HUF) [2001] 250 ITR 193, the Supreme Court did not consider it necessary to go into the views expressed by different Benches of the Supreme Court on the scope and effect of reopening of an assessment under section 147 of the Income-tax Act. We, respectfully, are, therefore, of the view that the judgment of the Supreme Court in Sun Engineering Works P. Ltd. [1992] 198 ITR 297 has neither been dissented from nor overruled. No doubt as contended by Mr. Khaitan, the judgment in Sun Engineering Works P. Ltd. [1992] 198 ITR 297 (SC), is a two-judge Bench judgment. By the said judgment, the three-judge Bench judgment in V. Jaganmohan Rao's case [1970] 75 ITR 373 (SC), has not been and could not have been overruled. As noticed supra, the Supreme Court i....