TaxTMI 
TaxTMI 
1993 (1) TMI 19
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...., 1992. Two points are being urged by Mr. J. P. Shah, learned counsel for the petitioner, coveting interference at our hands. The first point is that the impugned notice is time barred, when we take note of the provisions under section 149 of the Act under which the maximum time limit could be ten years from the end of the relevant assessment year, namely, March 31, 1982. The second point urged is that the conditions precedent for exercising jurisdiction for any alleged escaped assessment have not at all been fulfilled and hence the impugned notice is without jurisdiction. We will first take up for consideration the point relating to bar of limitation. In answer to the first point, Mr. M. R. Bhatt, learned counsel for the respondent, submits that section 150(1) of the Act specifically contemplates that notice under section 148 may be issued, notwithstanding anything contained in section 149, at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under the Act by way of appeal, reference, revision or by a court in any proceedin....
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....uld amount to income of the petitioner and, secondly, the petitioner was not afforded an opportunity of being heard before the order of the Income-tax Appellate Tribunal was passed. Section 153 of the Act speaks about time limit for completion of assessments and reassessments. Sub-section (2) prescribes a two year time limit for the making of an order under section 147 for escaped assessment. Sub-section (3) is more relevant for our purpose and it reads as follows: "Sub-section (3).-The provisions of sub-sections (1) and (2) shall not apply to the following classes of assessments, reassessments and, recomputations which may, subject to the provisions of sub-sections (2A), be completed at any time- (i) where a fresh assessment is made under section 146 ; (ii) where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under sections 250, 254, 260, 262, 263 or 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act ; (iii) where, in the case of a firm, an assessment is made on partner of the firm in consequ....
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....pect of section 150. The result is for the purpose of section 150, so as to enable the authority to issue the notice under section 148 at any time without being curtailed by the time limit prescribed under section 149, there must be satisfaction of the ingredients under Explanation 3 to section 153. The endeavour of Mr. M. R. Bhatt, learned counsel for the respondent, was to bring the matter within the ambit of Explanation 3 to section 153. The first ingredient is there must be a finding that the income excluded from the total income of one person is the income of another person. The second ingredient is that the order must be one which has come to be passed after the other person was given an opportunity of being heard. Mr. M. R. Bhatt, learned counsel for the respondent, on the first ingredient draws our attention to the following passage occurring in the order of the Income-tax Appellate Tribunal and he wants us to say that this would amount to a finding excluding the income from that of the firm and holding it to be that of the petitioner who was a partner of the firm : "The initial statements made by Shri A. B. Parikh on September 22, 1980, should have been immediately f....
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....s son, D having a 10 annas share and his son having 6 annas share. The Income-tax Officer held that the assessee-firm did not carry on business in the status of a firm and the business actually belonged to D and, therefore, assessed the entire income of the firm in the hands of D as an individual. On appeal by D, the Appellate Assistant Commissioner held that the firm was genuine and, therefore, only D's share in the income of the firm was assessable in his hands. Thereafter, the Income-tax Officer assessed the assessee-firm treating it as a firm. The assessee appealed to the Appellate Assistant Commissioner and contended that since no assessment had been made on the assessee-firm, on the basis of the returns filed by it, within the period of four years from the end of the relevant assessment year and also as no action had been taken under section 147 of the Act, the assessment, having been made beyond the period of limitation, was not legal and valid. The Appellate Assistant Commissioner accepted the contention of the assessee and annulled the assessment. Thereafter, the Income-tax Officer initiated proceedings under section 147(b) of the Income-tax Act, 1961, and issued a notice ....
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....sion of any income in the firm's case." Though it was a converse case of the income being held to be that of the firm, the principle deducible from the provisions has been taken note of and the initiation of proceedings was held to be barred by limitation. However, Mr. M. R. Bhatt, learned counsel for the respondent, relied on the pronouncement of the High Court of Patna in CIT v. Dhanpatram Chhotelal [1985] 156 ITR 682, and would submit that the petitioner being a partner of the assessee-firm, must be held to have had notice, since in the assessment proceedings he was representing the cause of the assessee firm. First of all, we must point out that we cannot act on presumptive level. There is no record placed before us to show that the petitioner was representing the cause of the assessee-firm before the Income-tax Appellate Tribunal in consequence of whose finding alone, the present proceedings for escaped assessment are stated to have been initiated. Even if he had so represented, that position could not be straightaway equated to participation in the proceedings pursuant to an opportunity being afforded on the question before the order is passed, within the meaning of Exp....