High Court Of Rajasthan
CIT vs. Ram Kishan Leela
Sections 147, 148
Asst. Years 1985-86, 1986-87
Rajesh Balia & Gopal Krishan Vyas, JJ.
IT Appeal Nos. 107 & 109 of 2006
9th October, 2006
Vivek Shrimali for Sangeet Lodha, for the Appellant
By the court :
The Revenue, at whose instance these appeals have been preferred relating to asst. yrs. 1985-86 and 1986-87, has challenged the common order passed by the Tribunal on 28th Feb., 2005, whereby, reassessment orders for the aforesaid two asst. yrs. 1985-86 and 1986-87 in the case of respondent-assessee have been quashed.
The appellant has sought to raise the question about validity of the finding reached by the Tribunal as well as by CIT(A) that reopening of the assessment for these two years cannot be sustained.
The facts of the case are that, in the first instance, the respondent-assessee has filed return for asst. yr. 1985-86 on 30th March, 1985 declaring loss of Rs.69,735 and, thereafter on 31st March, 1986 another return was filed under Amnesty Scheme declaring loss of Rs. 32,565. A search was conducted at the assesseeâs premises on 15th March, 1990 and proceedings were initiated under s. 147 r/w s. 148 of the IT Act, 1961. Finally, assessments were concluded under s. 143(3) r/w s. 147 for the two assessment years determining income from property dealing at Rs. 32,000 and 34,000 respectively for two assessment years.
On appeal, the CIT(A) deleted the additions made for both the years, which order was set aside by the Tribunal and AO was directed to make fresh assessment in terms of the directions issued in the order dt. 8th Jan., 2002 and as a result thereof the assessment orders were reframed under s. 143(3) r/w s. 147 on 28th Aug., 2003. Meanwhile, on 20th March, 1996 the AO received a communication from Addl. Director of Inspection along with xerox- copies of books allegedly belonging to M/s Jagdamba Griha Nirman Sahakari Samiti Ltd., Jodhpur suggesting that income belonging to the society had escaped assessment. It appears that when notice under s. 148 was issued to the respondent-assessee in pursuance of information received from Addl. Director of Inspection, Income-tax, that the material was relating to M/s Jagdamba Griha Nirman Sahakari Samiti Ltd., another notice under s. 147/148 was issued to the assessee. The appeal against the earlier assessment order passed under s. 143 (3) r/w s. 147 was pending in view of the fact that the AO resorted to reassessment proceedings once again by issuing notice on 28th March, 1996 with the permission of Addl. CIT in relation to the respondent-assessee.
In response to reassessment proceedings, the AO passed second reassessment order under s. 143(3) r/w s. 147 on 30th March, 1998. On appeal, the CIT(A) quashed the reassessment order by holding that initiation of proceedings under s. 148 was bad. That conclusion has been upheld by the Tribunal vide order under appeal. Having given our careful consideration to the facts and circumstances of the case and the submissions made by learned counsel for the appellant, we are of the opinion that issues raised in these appeals are of academic importance and from the narration of facts it is apparent that first reassessment proceedings initiated after the search was conducted at the premises of respondentassessee on 15th March, 1990 had not attained finality and as a result of orders of the appellate forum the reassessment proceedings for the asst. yrs. 1985-86 and 1986-87 in pursuance of notice issued prior to one in question became pending and final assessment orders were passed on 28th March, 2003.
Apparently, two assessment proceedings could not have continued together and at parallel length. The original reassessment proceedings have already been restored to the file of AO, consequently, second reassessment proceedings became infructuous as the orders can be passed on the basis of available material including information received later on while finalising the proceedings under s. 143(3) r/w s. 147 in pursuance of the reassessment proceedings commenced earlier to one in question. While the first reassessment proceedings were pending, there cannot be second reassessment proceedings. It is also settled that once the reassessment proceedings are pending, the entire assessment is open and is not confined to scope of reasons recorded by the AO before assuming jurisdiction. The setting aside of the reassessment proceedings commenced vide notice dt. 28th March, 1996 could not have been resurrected and all material must be taken into consideration in making final assessment in terms of the directions of the Tribunal while setting aside the order of CIT(A) and directing the AO to make fresh assessment vide its order dt. 8th Jan., 2002.
The Tribunal has categorically reached a finding in these appeals that M/s Jagdamba Griha Nirman Sahakari Samiti Ltd., Jodhpur, is a separate entity with the respondent-assessee. On the basis of this finding also, the reassessment order framed in favour of respondent-assessee could not have been sustained. The finding that M/s Jagdamba Griha Nirman Sahakari Samiti Ltd. and respondent-assessee are two separate entities and independent of each other is a finding of fact and that finding has not been challenged before us. For that reason also assessment order dt. 30th March, 1998 cannot be sustained. Viewed from any angle, the questions raised in these appeals are of academic importance and cannot be considered as questions of law requiring consideration in these appeals.
Accordingly, both the appeals fail and are hereby dismissed.
[Citation : 295 ITR 525]