AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2002 (5) TMI 8
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....f the assessment was done on the basis that there were hundi loan credits in the names of various parties who were known as name lenders. In the original assessment, loan credits from these parties were accepted without investigation. But subsequently, it was found that some of the hundiwalas whose names appeared in the list of creditors of the assessee made confessional statements before the Department that they were mere name lenders. Therefore, it was found that the hundi loans figuring in the books of account of the assessee were not genuine and the loan amount was nothing but the assessee's own undisclosed income. The papers which were placed before the Commissioner of Income-tax (CIT) for sanction, reference to some confessional statements were made, out of which the statement of Jethanand Madhavdas was also made from whom the assessee took loan. But that confessional statement was recorded on August 6,1968. This confessional statement was not in existence when the proceedings were initiated for reopening on February 10, 1967. The previous reopening of the assessment was challenged before the Appellate Assistant Commissioner of Income-tax (AAC). The same was set aside by the ....
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.... a name lender and he did not advance any hundi loans. The learned single judge found the reopening to be valid and dismissed the writ petition. Aggrieved against this order the present appeal has been filed by the assessee challenging the order of the learned single judge on two grounds; firstly, that once the earlier reopening of the assessment having been set aside by the Appellate Assistant Commissioner and affirmed by the Tribunal this second reopening could not have been opened by the Department; secondly, that there is no material whatsoever to reopen the assessment. We have heard learned counsel for the parties and perused the records. It is true that the first assessment which was reopened but not found to be validly initiated by the Tribunal and no further step was taken by the Revenue to challenge the same. Therefore, the question is whether when the first reopening of the assessment has been set aside by the Tribunal, can this second reopening be done or not. It may be, at the outset, mentioned that the earlier reopening was set aside by the Tribunal because of the non-application of mind by the Commissioner of Income-tax. There is no finding of fact recorded ther....
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....ment of Jethanand Madhavdas was available that provided sufficient material for reopening of the matter. Therefore, the confessional statement of Jethanand Madhavdas provided sufficient material to the authorities for reopening the assessment and that has been considered by the Central Board of Direct Taxes and sanction was accorded. Thus, it cannot be said that the Central Board of Direct Taxes has not applied its mind to the materials placed before it. The sending of the matter to the Board necessitated because the period for reopening by the Commissioner of already expired as such sanction of the Central Board of Direct Taxes was necessary and that was obtained within time. Dr. Pal, learned counsel for the appellant, submitted that the confessional statement of Jethanand Madhavdas was not placed before the Tribunal and he has pointed out that the proposal which was sent does not mention about the so-called confessional statement of Jethanand Madhavdas, therefore, there is non-application of mind. This contention is not correct because the factual aspect has already been noted in the proposal and it contained the order of the Tribunal which was sent with the proposal for reope....
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.... in that case reopening cannot be made as the matter stood concluded with the finding of the Tribunal. In that connection he has invited our attention to a decision of the apex court in the case of CIT v. Rao Thakur Narayan Singh [1965] 56 ITR 234; AIR 1965 SC 421, wherein it was observed that a mistake was committed in the order in appeal by the Appellate Tribunal and that mistake was not rectified by the Income-tax Department by pursuing proper remedy. It was held by the apex court that the Department cannot initiate proceedings again under section 34 on the self same subject-matter. This case does not provide any useful assistance in our case because the initiation of the proceeding was found to be bad in our case on account of non-application of mind for the reopening of the assessment for the year 1958-59. The reason given by the Tribunal was that the statement of Jethanand Madhavdas was not available at that time when the notice for reopening of the assessment was given in 1967. Therefore, the Tribunal held that it is invalid on account of non-application of mind, it is not a case in which a finding has been given on the merits of the matter and that finding has not been chal....