TaxTMI 
TaxTMI 
2002 (2) TMI 94
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....ing some rough balance-sheets were found and seized. On the basis of the seized material, the assessment was reopened under section 147 of the Act by the Assessing Officer for taxing the income which had allegedly escaped assessment. For this purpose, notice under section 148 was issued on July 18, 1995, after recording the following reasons: "During the course of search operation conducted under section 132 of the Income-tax Act, 1961, at the residential premises of R. Kakkar Glass and Crockery House, Lal Bazar, Jalandhar, cash amounting to Rs.60,000 and FDRs/KVPs, etc., were found and seized. It was also gathered from the various documents found during the search that the assessee had also made huge investments on the acquisition/construction of certain house properties. The assessee-firm was asked to explain the source of acquisition of the aforesaid cash as well as the source of investment made with regard to the purchase of FDRs/KVPs and the acquisition/construction of properties. As the assessee failed to explain the source of acquisition of the aforesaid cash and the investment with regard to FDRs/KVPs and construction of properties. These have been treated as income o....
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....struction of properties in the case of the firm, similarly there were no FDRs or KVPs relating to the firm, the investment of which could be related to the assessment year 1991-92. This shows that the reasons recorded for reopening the assessment for the assessment year 1991-92 were not valid reasons for reopening the assessment as argued by the appellant in his letter dated July 21, 1998. As regards reference to order under section 132(5) and quantification of income that escaped assessment is concerned, the Assessing Officer did not form his opinion of income having escaped assessment even on the basis of order under section 132(5). The order under section 132(5) has only been referred to for the purpose of quantification of income that has escaped assessment and this reference cannot be construed as one of the reasons for forming the belief regarding escapement of income. In view of this, it is held that the reasons recorded by the Assessing Officer for reopening the assessment were not valid reasons and therefore the same are quashed. Consequently, notice under section 148 issued in pursuance to such invalid reason is also quashed. Consequently, the assessment made by the Asses....
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....adbhai M. Lakhani v. ITO [1998] 231 ITR 779 (Guj). Mr. R.P. Sawhney, learned counsel for the respondents, controverted the claim of the petitioner. He contended that the earlier notice under section 148 dated July 20, 1995, had been quashed purely on technical grounds. There was no finding on the merits that the addition of Rs.3,20,900 was unwarranted. It was, therefore, contended that since the notice dated July 20, 1995, has been held to be invalid and quashed on technical grounds, there is no bar in law against issuing another notice under section 148 by rectifying the technical defects provided it falls within the parameters prescribed in sections 147 and 148 of the Act. Learned counsel also pointed out that pendency of the Revenue's appeal before the Tribunal in the earlier proceedings would not lead to any anomalous situation if an assessment is framed in pursuance of the impugned notice. In case the Revenue succeeds in appeal before the Tribunal, the earlier proceedings under section 147 would revive and the original order dated January 16, 1998, shall stand restored. As a consequence thereof, the present proceedings shall automatically become redundant. However, as long ....
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....cording a finding that on the basis of such material the additional income cannot be said to have escaped assessment, then it shall not be permissible for the Assessing Officer to issue a fresh notice on the basis of the same material in respect of the same item of income. However, in case some fresh material comes into the possession of the Assessing Officer subsequently suggesting escapement of income under the same head or some other head, we see no fetters on his power to issue a fresh notice under section 148. Needless to emphasise that all such subsequent notices have to conform to the parameters prescribed under the law including the provision regarding limitation. While issuing the impugned notice under section 148, the Assessing Officer has recorded the following reasons: "The assessee-firm, R. Kakkar Glass and Crockery House, filed its return for the assessment year 1991-92 on October 4, 1991, showing income of Rs.51,180. Subsequently a search under section 132 took place at the business premises of the assessee and the residential premises of the partners. A lot of incriminating documents were found and seized during the course of search which show that the assesse....
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....come in the way of the Assessing Officer while issuing the fresh notice in respect of the same income. A comparison of the reasons recorded for issuance of the two notices, which have been reproduced earlier, clearly shows that the basis for the two notices is entirely different. The earlier notice was issued on the ground that the assessee had failed to explain the source of acquisition of cash and investment with regard to FDRs/KVPs and construction of properties whereas the impugned notice dated February 9, 1999, has been issued on the basis of undisclosed capital arrived at by the comparison of the balance-sheets seized during the course of search and the balance-sheets filed with the returns of income. It has also been correctly pointed out on behalf of the Revenue that no anomalous situation would arise if the Revenue was to succeed in its appeal before the Tribunal. If the earlier assessment with the addition of Rs.3,20,900 were to be restored, the second assessment in respect of the same addition would stand automatically vacated as in that event the fresh proceedings under section 147 shall be rendered infructuous. None of the authorities cited by counsel for the pet....