TaxTMI 
TaxTMI 
1998 (3) TMI 166
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....ng Officer has completed assessment under section 143(3) of the Income-tax Act, 1961. Subsequent to the completion of the assessment, information was received by the Assessing Officer that income of the appellant escaped by a sum of Rs. 58,502 on account of processing of cloth done by the appellant from M/s. Unitex Processors Pvt. Ltd., and the payment was made of which the details are as follows: 15-5-1986 1598 Sq. Mtrs. Rs. 10,962.00 3-12-1986 6930 Sq. Mtrs. Rs. 47,539.00 ------------- Rs. 58,502.00 &n....
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....tly no proceedings will remain in existence. The ld. counsel further pleaded that if the dropping of the proceedings under section l47 is cancelled, then same will amount to restarting of the proceedings under section 147 which is not permitted by law. The ld. counsel of the appellant also pleaded that goods sent for processing to M/s. Unitex Processors, were duly recorded in the books of account and there were no goods processed which were not recorded in the books of account of the appellant. The ld. counsel has also submitted that it was pleaded before the Commissioner of Income-tax that cloth worth 58,502 never belonged to assessee-firm and no such goods were processed by the assessee firm from M/s. Unitex Processors. 6. The ld. DR relied on the order passed by the Commissioner of Income-lax. 7. The main objection of the ld. counsel is that there was no order in existence which could have given jurisdiction to the CIT under section 263 of the I.T. Act. The records show that the original order was passed under section 143(1) of the Income-tax Act, 1961. There is no dispute about the issue of notice under section 148 consequential to initiation of proceedings under section ....
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....-completed assessments pending at the commencement of the Act 1961 and assessments to be made after the commencement of the 1961 Act, as a result of returns of income filed after the commencement of the 1961 Act. Then in clause (d) it deals with assessments in respect of escaped income; in clauses (f) and (g) it deals with levy of penalties, clause (h) continues the effect of elections or declarations made under the 1922 Act; clause (i) deals with refunds; clause (j) deals with recovery; clause (k) deals generally with all agreements, notifications, orders issued under the 1922 Act; clause (l) continues the notifications issued under section 60(1) of the 1922 Act, and clause (m) guards against the application of a longer period of limitation prescribed under the 1961 Act to certain applications, appeals, etc. It is hardly believable in this context that Parliament did not think of appeals and revisions in respect of assessment orders already made or which it had authorised to be made under clause (a) of section 297(2)." 9. It is very important to understand the wider meaning of the assessment and various Courts have defined the word 'assessment' which is used in a number of prov....
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....at "N.A." is an abbreviation for 'not assessable'. We are, therefore, of opinion that there was an intention insofar as the returns filed on October 1, 1952, were concerned. If that were so, as already stated, the learned counsel for the assessee did not contend that section 34 was not applicable to the instant case." 11. The Hon'ble Supreme Court has held in the case of CIT v. C.M. Jaffar Khan [1972] 83 ITR 339 that the order of not proceeding is the culmination of the proceedings under the Income-tax. The Hon'ble Supreme Court has dealt with this issue in CIT v. Bidhii Bluisan Sarkar [1967] 63 ITR 278. The Hon'ble Supreme Court has held as follows: "(i) On the facts, that in making the order dated February 4, 1952, that the case be 'filed' the only intention the Additional Income-tax Officer could have had was that the proceedings before him initiated by the notice dated February 23, 1950, should no longer remain in existence as being unnecessary, and he clearly intended that they should be terminated or dropped. In the circumstances, the word 'filed' had to be interpreted as equivalent to "disposed of". (ii) That, assuming that it was essential that the Additional Incom....
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....d circumstances of the present case, it is obvious that the income of the assessee for the relevant assessment year was reassessed under section 34 of the Act. By reason of the supposed sale of 1959, the Income-tax Officer though if fit to act under section 34. He, accordingly, issued a notice in that behalf to the assessee. The assessee thereupon preferred his objections and his stand was clear and simple, namely, that in fact there was no sale. This stand of the assessee was accepted by the Income-tax Officer. The very basis on which the proceedings under section 34 were started was knocked out and in this situation the order 'proceeding filed' was passed by the Income-tax Officer. In that order he clearly made a reference to the assessee's letter. Therefore, in the re-assessment proceedings the Income-tax Officer came to the conclusion that there was no basis on which any reassessment could be made under section 34. The view we have taken of the matter clearly finds support from the decision of the Supreme Court in Esthuri Aswathiah v. Income-tax Officer. A similar order in an assessment proceeding under section 23(1) was held to amount to an order of assessment. The relevant ob....