TaxTMI 
TaxTMI 
2018 (2) TMI 162
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....109 appeals belonging to the Dasappa Group. Out of the 109 appeals, Sl.nos.1 to 70 in the cause- title above pertain to the BOI group and the remaining appeals 71 to 109 in the cause title above pertain to AOP group. Since the issues involved are common and are in respect of a group and also arise out of the common order passed by the CIT(A), dt.30/11.2009, for the assessment years 1986-87 to 1992-93, all these appeals are combined and a common order is passed for the sake of brevity and convenience. ITA Nos.273 to 335/Bang/2010 - BOI appeals : 1. As the facts are common and the issue involved is also common, we are referring to facts of one case, namely, BOI consisting of D. Dasappa, D. Ramachandrappa and D. Jairaj out of ITA Nos. 273 to 335/ Bang/2010 . 2. The assessee is a BOI consisting of D. Dasappa. D. Ramachandrappa and D. Jaiaraj. The assessee has instituted the appeal for A. Y. 1986-87 before the CIT (A) against the order passed u/s.143(3) R.W.S. 147 and 260A of the Act. As per the claim of the assessee, there is no dispute either about the constitution of the BOI up to asst. Years 1983-84 and 1985-86. However, it is the case of the assessee that the BOI came to b....
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.... -do- 1989-90 39,34,002 12 ITA.284/B/2010 -do- 1990-91 28,78,484 13 ITA.285/B/2010 -do- 1991-92 72,92,500 14 ITA.286/B/2010 -do- 1992-93 16,38,471 15 ITA.287/B/2010 Disrupted BOI consisting of Shri. D. Ramachandrappa, Smt. D. Indrani and Smt. D. Meenakshi PAN : ABJPR9683E 1986-87 8,50,860 16 ITA.288/B/2010 -do- 1987-88 14,18,920 17 ITA.289/B/2010 -do- 1988-89 26,93,930 18 ITA.290/B/2010 -do- 1989-90 36,66,102 19 ITA.291/B/2010 -do- 1990-91 28,79,484 20 ITA.292/B/2010 -do- 1991-92 58,13,100 21 ITA.293/B/2010 -do- 1992-93 17,39,420 22 ITA.294/B/2010 Dis....
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..... Indrani PAN :ABMPD9168M 1986-87 8,38,802 44 ITA.316/B/2010 -do- 1987-88 14,75,925 45 ITA.317/B/2010 -do- 1988-89 29,13,930 46 ITA.318/B/2010 -do- 1989-90 39,14,002 47 ITA.319/B/2010 -do- 1990-91 32,99,534 48 ITA.320/B/2010 -do- 1991-92 60,05,600 49 ITA.321/B/2010 -do- 1992-93 22,39,071 50 ITA.322/B/2010 Disrupted BOI 1986-87 8,50,912 consisting of Smt. R. Lakshmidevi, D. Ravikumar, Smt. D. Indrani PAN:AJPPS2187J 51 ITA.323/B/2010 -do- 1987-88 14,27,926 52 ITA.324/B/2010 -do- 1988-89 27,68,426 53 ITA.325/B/2010 -do- 1989-90 37,87,100 54 ITA.326/B/2010 -do- 1990-91 29,2....
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....assessee's were disrupted, then the question of remaining present before the AO does not arise as they are not in existence. They could not also have been represented. The facts are contrary, particularly on perusal of the CIT(A)'s order. 23. It has become necessary to consider one more point in view of the arguments of the ld. Representative for the assessee, Shri S.Venkatesan that the assessments made by the AO are bad in law and void ab-initio and they should be cancelled. The assessees have filed their returns of income showing different incomes for different assessment years. The returns of income for all the assessment years under appeals viz., A.Ys. 89-90, 90-91 and 91-92 are furnished by the CIT(A) in a tabular form by way of Annexure, which has become part of the order of the CIT(A). If the ld. Representative's contention is accepted that the assessments should be cancelled, it would amount that even the assessments cannot be made on the returned income also. This being, incorrect cannot be accepted. The returns are filed for making assessment on the returned incomes subject to acceptance by the Assessing Officer. The Assessing Officer is at liberty to mak....
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.... is a matter which has been recognised in all these decisions and if the assessee is not in existence, there should be a specific provision to assess the said income which was liable to be taxed under the provisions of the Income-tax Act. The same logic governs the Wealth lax Act also" The above passage of the Hon'ble High Court of Karnataka was reiterated in the later decision of the Hon'ble High court in T.Govindappa Setty v. ITO (231 ITR 892 at page 902). Therefore, in the absence of any provision to assess a dissolved BOI, unlike in the case of a person who dies without leaving a Will sec.159(1), by leaving a Will - sec.171, disrupted AOP - sec.177, company under liquidation - sec. 178 and dissolved firm- sec. 189, the assessments made on the assessees required to be annulled. 11. However, the Tribunal noted the arguments of the assessee and held that the argument of the assessees relying on the decision of T Govindappa Setty (supra) is on the point of disruption of the HUF and in these appeals, there was no disruption of HUF and that therefore, the facts of the assessees' cases. are not on par with the facts before the Hon'ble High Court. The ....
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....asons recorded for the years under appeal . The learned Departmental Representative produced a photostat copy of the order sheet where the reasons recorded are as under: 'The assessees have izow filed returns of income showing substantial receipts from 'gifts and Presentations' and 'Goodwill without furnishing any details like name and addresses of the donors, etc. I believe these amounts are actually the assessees' income which is to be brought to tax. Therefore, notice u/s. 148 r.w.s. 147 may be issued." 14. Shri Venkatesan contended that the reasons recorded by the AO do not reveal the name of the assessee in whose case the reasons have been recorded, date of recording the reasons, designation of the officer recording the reasons and assessment year to which the recorded reasons relate are not mentioned. At this stage, we asked the learned Departmental Representative as to whether any sanction, as contemplated u/s.151 for issue of notice uls.148 of the Act, after 4 years from the end of the assessment year, has been obtained before issue of notice. The learned Departmental Representative pleaded for some time and produced a letter addressed ....
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....s in respect of which proceedings u/s. 147 have already been initiated for the A. Ys. 1989-90, 1990-91, 1991-92 and the A. Y. 1992-93 in respect of which returns have already been filed and actions taken thereon. On the basis of the facts in the returns of income filed by these BOIs, they are also liable to wealth-lax in respect of assessments year 85-86 and onwards. No such returns have been filed. In these circumstances, I have also, reason to believe that the net wealth assessable in the hands of these BOIs has escaped assessment for A. Ys 85-86 to 95-96. I, therefore, propose to initiate proceedings for assessment by issue Of notice u/s. 148 of the I. T Act, in the cases of all the 10 BOIs for A. Ys 85-86 to 94-95 except for the A. Ys 89-90, 90-91 and 1991-92 in respect of which notices have already 'been filed As far as A. Y. 95-96 is concerned, I propose to initiate proceedings by issue of notice u/s. 142(1) of the I. T Act." 15. Shri Chadaga, learned Departmental Representative contended that the above should be considered as reasons recorded as against the reasons recorded and produced before us earlier, which we have mentioned above. Shri Ven....
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....are covered in favour of the assessee should be reviewed by the Tribunal in these appeals. We have perused the earlier order of the Tribunal in the case of the assessees and considered the argument of the learned Departmental Representative. It is not in dispute that the Tribunal has considered all the facts, evidence and has also applied the principle laid down by the Supreme Court in the case of Noorjahan reported in 237 ITR 540. Therefore, we agree with the findings of the Tribunal which are qualitatively unexceptional for these years also and we uphold the contentions of the assessees in this regard as the facts are similar. We accept the appeals of the assessees on these points and are accordingly disposed of. 8. Feeling aggrieved by the order passed by the Tribunal, the Revenue filed an appeal before the jurisdictional High Court. The Hon'ble High Court vide its judgment dt.06.11.2007, held as under : 12. Having heard the learned counsel appearing for both the parties, we are of the opinion that since the Assessing Officer has not considered the preliminary point raised by the assessee in regard to jurisdiction and in the light of the judgments relied upon by the ....
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....red as valid on the basis of the reasons recorded and note, if any, available in the assessment record cannot help in holding that reopening is valid on the basis of such note. From the assessment order, i i is clear that the Assessing Officer has reopened the assessment on the basis of returns filed in the status of B01. The Assessing Officer has concluded the assessment on the basis of information available in the returns of the 801 and this fact suggests that no information was available with the Assessing Officer. Only change of opinion by the Assessing Officer is that the receipts shown as goodwill and gifts and presentation in the returns of 801 are to be assessed in the hands of the AOP. There should be some material before the Assessing Officer to hold the existence of AOP or material to show that such persons have come together to start a joint venture of project for the purpose of producing income, profit and gains. In the reasons recorded, the Assessing Officer has not mentioned any such information. From the facts available in the assessment order, it is clear, that the Assessing Officer has formed his opinion on the basis of the fact, which were earlier available at th....
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....that the court cannot investigate into the adequacy or sufficiency of the reasons which have weighed with the ITO in coming to the belief, but the court can certainly examine whether the reasons are relevant and have a bearing on the matters in regard to which the Assessing Officer is required to entertain the belief before he can issue notice u/s.147. If there is no rational or intelligible nexus between the reasons and the belief, then the conclusion would be inescapable that the Assessing Officer could not have on undisputed facts discussed in the order and also taking note of the circumstances of the case, we hold that the reopening of the assessments are bad in law. It is ordered accordingly. 12. Besides that the Tribunal had also decided the other grounds on merit. Feeling aggrieved by the order, the Revenue filed an appeal before the Hon'ble High Court. The Hon'ble High Court in ITA.865/2007, vide order dt.02.07.2010, had remanded all the appeals to the Tribunal with a following direction : 9. Having heard the learned counsel for both sides and on perusal of records, it is not in dispute that at the initial round of litigation there was a challenge made to the no....
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.... of earlier notices under Section 148 is pending before the Tribunal and it is in respect of the very same individuals as to whether they had constituted themselves as "AOP" in various combinat ions has been the subject mat ter of the reopening by issuance of notices under Section 148 of the Act, since the assessees who had const ituted themselves as "BOl" are the very same persons who, according to the revenue had come together as "AOP". It is in respect of the receipts which is the subject matter of the income of the "BOl" as well as the same being the subject matter of receipts by "AOP", we think that there has to be simultaneous consideration of these issues by the Tribunal where the matters with regard to the "BOl" are now pending. 11. We have also to note that wi th regard to certain f indings given by the Tribunal, at the f irst instance, the Tribunal had stated that any reopening of the assessment by the Assessing Officer would amount to a virtual review of his own order which has merged with the orders of Commissioner of Income Tax (Appeals) and that the Assessing Officer had no power to review his own assessment and therefore, the Assessing Officer could not have....
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....ad not confronted to the assessees any material and therefore, the said material could not be used against the assessees. If that be so, then the Tribunal could not have straightaway concluded the matter on merits in favour of the assessees. Therefore, for the aforesaid reasons, we are of the considered view that these appeals have to be remanded to the Tribunal for reconsideration of the issues raised in these appeals along with the issues raised in the appeals filed by the assessees with regard to the 'BOI' and which are filed on 8th March 2010 and are pending before the Tribunal. 12. In vi ew of the aforesaid remand, al l the contentions which are raised in these appeals by both sides are left open. Both sides are at liberty to file the additional material which they propose to do so by way of paper book in support of their contention. Accordingly, the common impugned order dated 30th April 2007 passed by the Tribunal is set aside and the appeals filed by the revenue are allowed in part. Further, the Tribunal is directed to call for original records and after perusal of the same, proceed in accordance with law. 13. It may be pertinent to mention here that pri....
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....Body of Individuals on 12/9/1993; that no income had escaped assessment; and that no assessment could be made on the disrupted BOI. The incumbent AC, quoting the provisions of section 2(31) of the Act and drawing attention to clause (v) thereof, explained in the reassessment order that the law makes no distinction between Body of Individuals and the Association of Persons and applies equally to both categories of assessees. Again quoting the provisions of section 177(1) of the Act, the AO clarified that assessment/reassessment proceedings could be validly initiated in respect of disrupted Body of Individuals as in the case of the appel lant . The AO al so pointed out that the appellant itself had filed the returns of income though belated on 30/9/1993 and had requested the AC to consider the same as having been filed in response to the notices issued u/s 148 of the Act consequent to the proceedings initiated u/s 147 of the Act. Holding thus, he went ahead and completed the reassessment proceedings. The correctness of such action on the part of the AO is questioned in the following grounds of appeal: "2. The order of assessment passed by the learned A.O. on the disrupted BO....
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....ment years 1986-87 and 1991-92, obj e c t ions we r e rai s ed be for e the AO for r eopening of the assessments but they were not taken cognisance of by the AO; that the incumbent AO's observat ion that the appellant should have raised such objections at the time of original assessments betrayed his ignorance of the fact that the appellant had as much raised such objections against the action of the AC initiated u/s 147/148 of the Act in respect of the original assessments; and that the Hon'ble ITAT had, in fact, declared the assessment orders for the assessment years 1987-88, 1988-89, 1989-90, 1990-91 and 1992-93 as invalid due to the AO's failure to record the reasons for issue of notice u/s 148 of the Act. 4.7 Therefore, applying the said legal position now as stipulated in sect ion 147/148 of the Act, i t is not necessary for the AC to establish to the entire satisfaction of the appellant reasonable belief based on which the notice came to be issued u/s 148. In fact, the Hon'ble Supreme Court has gone to the extent of saying that confirmation of the belief by the AO is within the realm of subjective sat isfact ion and what al l has to be sat isf ied is....
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.... note sheets no other reasons recorded were produced before us .Ld. DR relies upon the order passed by the AO and the CIT (A). 19. We have heard the rival contentions and perused the record. It is beyond the pale of controversy in terms of the judgment of the Hon'ble Supreme Court in the matter of GKN Driveshaft (supra), that it is the duty of the AO to provide the reasons recorded for assumption of jurisdiction u/s.148. Further it is clear that after the reasons are provided to the assessee, the assesse may file objections against the issuance of notice thereafter the AO would pass the speaking order dealing with the objections raised by the assessee. In the present case despite specifically request by the assessee to the AO / CIT(A) for providing the reasons recorded for assumption of jurisdiction, AO or the CIT (A) have failed to comply the mandatory requirement of law by providing the reasons recorded before issuance of notice under section 148 of ACT to the assessee, hence objection raised by the assessee vide letter dt.09.12.2008 remained unanswered. Further the reasons brought on record by the Standing Counsel for the Revenue, reproduced herein above are bereft of any ....
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....e-open the assessment can be resorted to only where there is income escaping assessment and not merely on suspicion of income escaping assessment The act ion of the A.0. in assessing the income protectively clearly brings out the doubt and suspicion and consequently, the order of reassessment requires to be cancelled. 24. In this regard, the Ld. AR has submitted that the Revenue, vide letter dt.30.03.2000 has issued a notice treating the assessee as AOP without giving any reasons for reopening. Scanned copy of the notice is given below : 25. After receipt of the notice the assessee has filed the return of income under protest and thereafter vide letter dt.23.02.2002 the assessee requested the AO to provide copy of the reasons for reopening. The AO has not provided the reasons and has straight away completed the assessment proceedings. The Ld. AR submitted that in view of the law laid down by the Hon'ble Supreme Court in the matter of GKN Driveshaft (supra), the proceedings concluded by the AO/ CIT(A) were devoid of any merit and was liable to be quashed being without jurisdiction. 26. On the other hand, the Ld. DR relied upon the order passed by the lower authorities. 2....
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....3/Bang/2003 and ITA Nos.1359 to 1361/Bang/2002, are allowed. Order pronounced in the open court on 6th day of December, 2017. ============= Document 1 SI. No. Issues Validity of assessment framed on the dissolved BOI's Assessee Asst. Years All assessees 1986-87 to 92-93 = Validity of the re-opening of the assesments All assessees 3. Validity of ex-parte All assessees assessments 1986-87 to 92-93 1986-87 to 92-93 Treatment of goodwill as All assessees 1986-87 to 92-93 taxable receipts 5. Treatment of gifts and All assessees 1986-87 to presentation as taxable receipts 92-93 6. Addition towards agricultural All assessees 1986-87 to income All assessees 92-93 1986-87 to 92-93 1986-87 to 92-93 7. Int. u/s. 139(4) & 217 8. Int. u/s.234A, B & C All assessees Document 2 The asses.com have now filed roturis of Ingen sting submental receipe from "Gifts and Presentations" and "Goodwill" without Burnishing any details like name and so spected 12 2%8 the donors abc. I believe these pounts are actually the assessons i....
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.... आव की जिसमें आप पर आकर निरà¥à¤§à¤¾à¤°à¤¿à¤¤ किया जाना है Whereas I have reason to believe that chargeable to tax for the assessment year 19........ of the Income Tax Act, 1961. The income of......... ·89.1990. इसलिठउनकी आपकी हामि / मो / पà¥à¤¨à¤ƒà¤¸à¤‚ इसके र के लिठकर से पà¥à¤°à¤à¤¾ वायकर अधिनियम, 1961 की धारा 147 सेके your income in respect of which you are assessable has escaped assessment within the meaning of Section 147 करने का पà¥à¤°à¤¸à¥à¤¤à¤¾à¤µ करता है और इससे सराप....