TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 1480
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....n of the assessing officer in respect of the quantum of agricultural income for the assessment years 1999-2000, 2000-2001 and 2003-2004 by relying on statements without factual foundations and consequently gave a perverse finding on the facts and circumstances of the case?" 2. We have heard Sri A Shankar, learned counsel for the appellants and Sri K V Aravind, learned counsel for the Revenue and perused the records. 3. For the assessment years 1999-2000 and 2000-2001, these appeals have been filed on merits as well as on the question of the validity of reopening of assessment by issuing a notice under Section 148 of the Income Tax Act, 1961 (`Act' for short). For the assessment year 2003-2004, the question of reopening is not there and the challenge is only on merits. We shall first deal with question No.1 which is with regard to validity of reopening of the assessment for the assessment years 1999-2000 and 2000-2001. Question No.1: 4. For the said assessment years 1999-2000 and 2000-2001, besides certain other income from business, the assessee/appellant had declared agricultural income of Rs. 23,72,050/- and Rs. 25,32,820/- respectively. Declaring the aforementioned agric....
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....." 5. From the above, what is clear is that the reason for reopening the assessment for both the assessment years was common i.e. for the detailed reasons stated in the assessment order in the case of the assessee for the assessment year 2001-2002. 6. Although Sri A Shankar, learned counsel for the appellant/assessee, has raised a technical argument that the reopening notices dated 21.10.2005 were bad as they did not clearly specify as to whether the said notices were for assessment or re-assessment of the income of the assessee, but since the question was never raised by the appellant/assessee earlier before the authorities below, we would not be inclined to go into the same. 7. From a reading of the said synopsis of reasons furnished to the assessee, it is abundantly clear that the re- opening was on the basis of the assessment order passed for a different assessment year, i.e. 2001-2002. It is not disputed that the assessment order for the year 2001-2002 was challenged by the assessee in an appeal before the Appellate Commissioner, which was dismissed. But in the further appeal filed by the assessee, the Tribunal, by its order dated 02.03.2005 allowed the appeal and set aside....
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....ement of the income of the assessee from assessment because of the latter's failure or omission to disclose fully and truly all material facts. In the case of Ganga Saran & Sons (P.) Ltd. v. ITO [1981] 130 ITR 1/6 Taxman 14, the Apex Court, while considering a case under the unamended Act, has held that "the Court, of course, 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 he is required to entertain the belief before he can issue notice under Section 147(a) of the Act". The Bombay High Court in the case of Hindustan Lever Ltd. v. R.B. Wadkar [2004] 268 ITR 332/137 Taxman 479 has held that the Assessing Officer must investigate as to whether the material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The Apex Court in the case of Indian Oil Corporation v. ITO [1986] 159 ITR 95....
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....07] 291 ITR 500/161 Taxman 316 wherein, it has been held that at the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief and that whether the materials would conclusively prove the escapement, is not the concern at that stage. The said observation of the Apex Court, in fact, would go in favour of the assessee and not the Revenue. In our view, no reasonable person can form an opinion to reopen an already concluded assessment on the basis of an assessment order of a subsequent year, which has already been set aside by the Tribunal and attained finality. 16. As such, in the present case, as the assessment order for the year 2001-02 had itself been set-aside by the Tribunal much prior to the issuance of notice under Section 148 of the Act, which was issued on the basis of the assessment order for the year 2001-02, in our considered opinion, there existed no reason for issuance of the notice under Section 148 of the Act. In our view, in the aforesaid facts, the reopening of assessment for the assessment years 1999-2000 and 2000-2001 in the case of assessee, cannot be justified in law. Quest....
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.... of land in which plantation was there after 1998-99 (measuring 1 acre 39 guntas and 8 acres 37 guntas) and there was yield of arecanut in the relevant assessment year 2003-04, the Assessing Officer estimated income at Rs. 50,000/- per acre and thus determined the income from the said two plots of land at Rs. 5,46,250/-. For the third item, which was income from fallen arecanut trees, tender coconuts, sale of paddy and areca plants, the income declared by the assessee in his books of account at Rs. 3,68,950/- was accepted by the Assessing Officer. 20. The contention of learned counsel for the appellant is that for the same year 2003-04, in the case of N.G. Pai, the Assessing Officer had estimated the yield of arecanut per acre at 14 Quintals, and after calculating the average sale price at Rs. 10,000/- per quintal, a deduction of 1/3rd expenses was made, and the balance was taken as the total agricultural income of the said assessee-N.G. Pai. By such calculation, the income per acre would come to Rs. 93,200/-. According to Sri Shankar, if the books of account of the assessee had to be rejected, then the yield per acre should have been estimated by the Assessing Officer for the tot....
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....egard to fallen arecanut trees, tender coconuts etc.) and then proceeded to calculate the agricultural income on the basis of the agricultural income declared by the assessee for the assessment year 1998-99. It is not understood as to why the income declared for the year 1998-99 was chosen by the assessing officer for calculating the income for the assessment year 2003-04. From the record it appears that for a closer assessment year 2001-02 the agricultural income declared by the assessee was Rs. 20,41,000/-, which has also been affirmed by the Tribunal. It is thus not understood as to why the said estimation for the assessment year 2001-02 was not taken for consideration for the assessment year in question i.e., 2003-04 in which year there was a marginal increase of about Rs. 1.5 lacs only and was an assessment year which was closer to the assessment year in question, than the year 1998-99. 23. After rejecting the books of account of the assessee, taking up one method of calculation from one particular assessment year and then accepting a part of the own accounts of the assessee, cannot be accepted to be a method of calculating the income of the assessee. After the books of accou....