ORDER
1. This is an appeal filed by assessee under Section 260A of the IT Act against an order, dt. 3rd Aug., 2001, passed by Tribunal in ITA No. 44/Ind/1996. It was admitted for final hearing on following substantial questions of law :
1. Whether, in the facts and circumstances of the case, there could be recourse to the provisions of Section 147/148 of the IT Act for reassessing the income of the assessee by including Rs. 2,74,627 ?
2. Whether, in the facts and circumstances of the case, reopening of the assessment was barred by time under the proviso to Section 147 of the Act ?
2. Heard Shri K.N. Puntambekar, learned Counsel for the appellant and Shri A.P. Patankar, learned Counsel for the respondent.
3. In short and in substance, the question that arises for consideration in this appeal is; whether issuance of notice under Section 147/148 of the Act, seeking to reopen the assessment for making reassessment for the assessment year in question (1982-83), is legally justified or not All the authorities below, i.e., CIT(A) and Tribunal have upheld the notice and in consequence the reassessment proceedings. This is what the Tribunal held in para 5 of the impugned order while upholding the notice and reassessment by negativing the challenge of assessee :
Para 5. We have considered the rival contentions carefully. We have also perused various orders passed by different authorities and judgments relied on by the parties. We find force in the contentions of the learned Departmental Representative. The case is very simple. Cash was seized from the assessee on which assessee has taken different instance at different point of time. As the case relied on by the learned Authorised Representative of the assessee as well as commentary relied upon by him relate to the old provisions of Section 147; the new section which was amended w.e.f. 1st April, 1989 gives wide powers to the AO. Most important requirement is that AO should have reason to believe that income has escaped assessment and in case of orders under Section 143(3) assessment cannot be reopened beyond four years provided assessee has made all the disclosures. From the facts discussed above, it is very clear that assessee has not made full disclosure. In this regard, we are also supported by the following cases--
'Ram Prasad v. ITO (1995) 82 Taxman 199 (All). In this case, on p. 205, Allahabad High Court has observed as under :
Now the term 'escaped assessment' includes both non-assessment as well as underassessment. When a person, though liable to be taxed, has not been assessed to tax, there is an escapement. Further, although the same person may be taxed both as an individual and as a Karta of a HUF, the two capacities are intrinsically different units of taxation under the Act. They are treated as different assessees for the purposes of the Act. The Revenue authorities are not precluded from taking appropriate proceedings or to issue a notice for reassessment to another, merely because that income has been assessed in the hands of 'individual' if there is material to show that it is the former and not the latter that should have been assessed under law. The reason is not too far to seek. The scheme of the Act contemplates an assessment in the hands of an assessee who in law is assessable in respect of that income. If someone otherwise volunteers for assessment, that may be of no consequence nor it will forestall the making of an assessment against a person legally liable to pay tax in respect of that income. The argument that as the same income has been assessed as a protective measure in the hands of Ram Prasad, individual, and, thus, no notice under Section 148 could be issued to assess that income in the hands of Ram Prasad (HUF), is stated to be rejected. The invalidity of the impugned notices cannot be upheld on contention under discussion which is hereby rejected by saying that the assessment of an income in wrong hands would not preclude the AO to initiate appropriate proceedings in the hands of a person who, in law, may be liable to be taxed in respect of that income.
Same view has been taken by Calcutta High Court in Rajinder Mohan Bhandari v. ITO : [1978]111ITR407(Cal) and by Kerala High Court in Mrs. Gladys S. Koder v. ITO : [1976]104ITR220(Ker) . In view of these circumstances, we uphold the order of CIT(A).
4. So far as facts of the case are concerned, the Tribunal took note of them in. relation to issuance of notice in para 2 as follows :
Para 2. Keeping all these circumstances in view, a notice under Section 148 for asst. yr. 1982-83 was issued on 16th March, 1993 against which assessee filed 'nil' return with a note that assessee has already filed returns from asst. yrs. 1975-76 to 1984-85 and income of Rs. 28,500 had been assessed for asst. yr. 1982-83 on substantive basis and Rs. 2,67,627 was assessed on protective basis for this year. As CIT(A) had already deleted addition of Rs. 2,67,627, income of Rs. 28,500 shall be accepted as such. After some adjournment on 2nd March, 1995 Shri Amritlal Jain appeared on behalf of assessee and requested to supply the reasons for reopening the assessment, which were made available to him and counsel of the assessee read the same. He further submitted that issue has been finally decided by Tribunal orders in ITA Nos. 788 and 817 dt. 12th Aug., 1992. He further submitted that this sum of Rs. 2,67,627 was accumulated income of asst. yrs. 1975-76 to 1982-83. Therefore, same shall not be added to the income of assessee again. The AO did not find the explanation satisfactory. He further found that during assessment proceedings for asst. yrs. 1975-76 to 1982-83 assessee was asked to produce books of account and other records to prove that he had really earned that income but had failed to produce any documentary evidence. The AO also found that assessee had filed voluntary returns in his individual capacity just to save himself from litigation and had declared bogus income for various years which has not been established. Had the assessee been really earning some income, then assessee would have definitely filed returns for other years also. Ultimately a sum of Rs. 3,03,127 (being cash seized by the Department, Rs. 2,67,627 from the car, Rs. 7000 from the person and Rs. 28,500 which was declared by the assessee) was assessed in the hands of the assessee in his individual capacity.
5. On the aforesaid facts and finding of Tribunal, the question is whether this Court can hold that impugned notice under Section 147/148 is bad in law either on facts or in law ?
6. We do not find it to be so on the facts found and finding recorded by the Tribunal in para 5, quoted supra.
7. Here is a case where true disclosure of assets/income was not made by the assessee and hence, notice could be issued. Reasons were shown to assessee and he replied. These facts are not in dispute as is clear from narration of facts mentioned supra.
8. In these circumstances in our opinion, the authorities below were justified once they record their dissatisfaction to the explanation offered by assessee in upholding the notice and reassessment. Indeed, power to reopen the concluded assessment by taking recourse to twin provisions namely Section 147/148 ibid cannot be challenged by an assessee except on very limited grounds known to law. In our considered view, none of those grounds could be noticed so as to hold in favour of assessee.
9. No doubt, placing reliance on several authorities such as CIT v. Rao Thakur Narayan Singh : [1965]56ITR234(SC) , CIT v. H. Hoick Larsen : [1972]85ITR467(Bom) , Hum Boldt Wedag India Ltd. v. Asstt. CIT : [1999]236ITR845(Cal) and Parashuram Pottery Works Co. Ltd. v. ITO : [1977]106ITR1(SC) , learned Counsel for the appellant made attempt to assail the impugned notice but in our view, we cannot accept his submission. Law laid down in these cases is distinguishable on fact of this case and hence, these decisions with respect have no application/First facts and then authorities.
10. In view of aforesaid discussion, we concur with the finding of Tribunal and in consequence find no merit in appeal. It is accordingly, dismissed. No costs.