TaxTMI 
TaxTMI 
TaxTMI 
2021 (7) TMI 1036
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....sessment proceedings on the facts and circumstances of the case? (2) Whether the Tribunal was justified in law in not appreciating that the notice u/s 148 of the Act was issued to "assess" the income and thus all contentions in law remained open for the appellant to agitate by filling a return in response to the notice u/s 148 of the Act on the facts and circumstances of the case? (3) Whether the Tribunal is justified in law in holding that the appellant is not entitled to make additional claim of loss incurred of Rs. 8,28,65,052/- in the re assessment proceedings under section 147 of the Act on the facts and circumstances of the case? (4) Whether the Tribunal is right in not holding that the appellant is entitled to the additional claim of actual loss incurred of Rs. 8,28,65,052/- on account of sale of government securities on the facts and circumstances of the case?" 2. Facts leading to filing of this appeal briefly stated are that assessee is a Co-operative Apex Bank and is registered under the Karnataka Co-operative Societies Act, 1959 (hereinafter referred to as 'the 1959 Act' for short). The assessee had been granted licence to carry on the business of bank....
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....n 'CIT VS. SUN ENGINEERING WORKS (P.) LTD.', (1992) 198 ITR 297 (SC), the original order of assessment had attained finality and therefore, it was held that the assessee cannot agitate the issues in re-assessment proceedings. It is also pointed out that decision in Sun Engineering Works (P.) Ltd. supra pertain to Assessment Years 1960-61 and 1961-62 and was rendered before amendment was made under Section 143(1) of the Act with effect from 01.04.1989. It is also argued that aforesaid decision does not apply to Assessment Years after 01.04.1989. It is also pointed out that an order passed under Section 143(1) of the Act was an order of assessment only prior to 01.04.1989 and thereafter, an intimation. Therefore, the earlier order of assessment gets effaced on commencement of proceeding under Section 147 read with Section 148 of the Act. It is also urged that Supreme Court in 'V.JAGAN MOHAN RAO VS. COMMISSIONER OF INCOME TAX AND EXCESS PROFIT TAX', (1970) 75 ITR 373 (SC) has held that the assessment gets effaced and the subsequent assessment proceedings has to be done afresh. It is also submitted that decision in the case of V.Jagan Mohan Rao was followed by this cour....
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.... deemed to be an order for the purposes of Sections 246 and 264. The aforesaid Explanation was deleted by Finance Act, 1999 with effect from 01.06.1999. The effect of the deletion is that intimation under Section 143(1) of the Act ceases to be an order for the purposes of Section 264 of the Act. The Supreme Court in RAJESH JHAVERI supra has held that an intimation under Section 143(1) of the Act cannot be treated as an order of assessment. In the instant case, admittedly, no original assessment was made in case of the assessee. The assessee has made a claim in the return filed in response to a notice under Section 148 of the Act. 7. In V.JAGAN MOHAN RAO supra, a three judge bench of the Supreme Court held as follows: This argument is not of much avail to the appellant because once proceedings under Section 34 are taken to be validly initiated with regard to two-thirds share of the income, the jurisdiction of the Income tax Officer cannot be confined only to that portion of the income. Section 34 in terms states that once the Income-tax Officer decides to reopen the assessment he could do so within the period prescribed by serving on the person liable to pay tax a notice contain....
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....g the machinery unworkable. 39. As a result of the aforesaid discussion, we find that in proceedings under Section 147 of the Act, the Income Tax Officer may bring to charge items of income which had escaped assessment other than or in addition to that item or items which have led to the issuance of notice under Section 148 and where ressessment is made under Section 147 in respect of income which has escaped tax, the Income Tax Officer's jurisdiction is confined to only such income which has escaped tax or has been under-assessed and does not extend to revising, reopening or reconsidering the whole assessment or permitting the assessee to reagitate questions which had been decided in the original assessment proceedings. It is only the under-assessment which is set aside and not the entire assessment when reassessment proceedings are initiated. The Income Tax Officer cannot make an order of reassessment inconsistent with the original order of assessment in respect of matters which are not the subject-matter of proceedings under Section 147. An assessee cannot resist validly initiated reassessment proceedings under this Section merely by showing that other income which had be....
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....r not, whereas, MEWALAL DWARKA PRASAD supra, it was held that once proceeding under Section 148 of the act is initiated, original order of assessment gets effaced. In Mewalal Dwarka Prasad supra reliance has been placed on decision rendered by three judge bench of the Supreme Court in Jagan Mohan supra. In view of divergence of view taken by the Supreme Court in MEWALAL DWARKA PRASAD supra and Sun Engineering Works (P.) Ltd supra, the matter was referred to a three judge bench, which dealt with the reference in INCOME TAX OFFICER VS. K.L.SRIHARI (HUF)', (2001) 250 ITR 193 (SC), which held as follows: 1. By order dated November 19, 1996, these special leave petitions have been directed to be placed before the three judge Bench because it was felt that dissonant views have been expressed by different Benches of this court on the scope and effect of reopening of an assessment under Section 147 of the Income-tax Act, 1961. It has been pointed out before us that the matter has earlier been considered by a Bench of three judges in V. Jagan mohan Rao v. CIT and EPT and the observations in the said case came up for consideration before two judges' Benches of this court in ....