Judgment:
ORDER
S.R. Chauhan, J.M.
As the above appeals and C.O. are interrelated and involve common points so we are disposing them of by this common order for the sake of convenience.
2. ITA No. 2676/Jp/1994 is an appeal by assessee for assessment year 1990-91 and directed against the order of Commissioner (Appeals), Jodhpur, dated 21-10-1994.
3. ITA No. 452/Jdpr/1998 is an appeal by revenue for assessment year 1990-91 and is directed against the order of Commissioner (Appeals), Jodhpur, dated 15-7-1998.
4. C. O. No. 70/Jp/1998 is the C. O. of assessee related to ITA No. 452/Jdpr/1998 being for assessment year 1990-91.
5. The assessee's appeal being ITA No. 2676/Jp/1994 and assessee's C.O. being 70/Jp/1998 have not been pressed by the learned authorised representative of assessee during arguments and so the same are dismissed accordingly.
6. Now it is only the revenue's appeal being ITA No. 452/Jdpr/1998 which remains to be considered and decided on merits by us.
7. We have heard the arguments of both the sides and also perused the records.
8. The revenue has raised three grounds of appeal but they all constitute single issue disputing the learned Commissioners (Appeals) finding that the initiation of proceedings under section 148 was invalid and, in turn, quashing the assessment order by assessing officer. The learned Departmental Representative of revenue has contended that this appeal is in second round proceedings emanating from reassessment. He has contended that before issuance of notice under section 148 the assessing officer is required to record reasons for belief of escapement of income from assessment, and in the instant case the assessing officer recorded the said reasons under section 148(2). He has contended that grievance of assessee is that these reasons do not constitute escapement of income from assessment and the additions have been made on other grounds. He has contended that there is no requirement of law that the assessing officer should record all reasons and to show all escaped income He has contended that sufficiency of reasons cannot be questioned, and cited Raymond Woollen Mills v. ITO : [1999]236ITR34(SC) . He has contended that the learned Commissioner (Appeals) cancelled the proceedings under section 148 without proper basis. He has contended that proceedings under section 148 were initiated in time and reasons were also recorded. He has also contended that the fact that the earlier issued notice under section 143(2) having become barred by limitation and assessment having not been made under section 143(3) due to time barring is not a decisive factor for deciding the validity of section 148 proceedings. As against this, the learned authorised representative of assessee has contended that the grievance of assessee is regarding non-existence of reasons for belief of escapement of income. He has contended that the assessing officer recorded two reasons for reopening and initiating the proceedings under section 148 which were :
(i) Depreciation wrongly claimed on A.C.
(ii) Depreciation wrongly claimed on truck.
As regards the first reasons, the learned authorised representative of assessee has contended that the A.C. was not purchased during previous year relevant to assessment year under consideration, and so the first reason recorded by assessing officer is non-existent. Regarding the second reason, he has contended that the truck was purchased in February 1990, and the assessee's accounting year is financial year. It has been contended that the assessing officer passing the earlier assessment order, himself admitted the purchase of truck and on that account due to difference of opinion, he added the cost of truck purchased in the income. It has also been contended that in the succeeding year, the plying of truck was admitted by assessing officer and he has accordingly taxed the income from the said truck and allowed depreciation thereon. It has also been contended that simply because during the year under appeal the truck was plied for only one month does not make the truck non-eligible for depreciation. It has been contended that the assessing officer having admittedly held the view that the claim of depreciation on truck was a case of difference of opinion, no jurisdiction under section 147/148 could have been acquired by assessing officer merely on the basis of change of opinion because the assessee had filed, along with the return, the audited accounts and depreciation chart showing the purchase of truck and claim of depreciation thereon. He has contended that after filing of return, and after processing of return and even after survey, no material been brought to the notice of the assessee that the assessee claimed false depreciation on truck. He has contended that the assessing officer's objection is in respect of user of the truck during this year. He has contended that the assessee had used this truck in assessment year 1990-91 and shown (in the original return) income of Rs. 5,000 and the assessing officer has mentioned it in the assessment order in para 6 on page 9 of the same. He has contended that the assessee is a dealer in motor parts and after purchase of the truck assessee gave the truck to be run on hire to one Shri Shama Singh for monthly hire charge of Rs. 5,000. He has contended that this entire transaction was detected by Shri Devendra Raj Singhvi and it was in his notice but he died due to murder before survey. It has been contended that he was a partner also and brother of other partner. It has been contended that during survey, the statement of Shri Anil. Kumar was recorded (page 67 of paper book) wherein Anil Kumar stated the use of this truck and giving it on hire. The learned authorised representative of assessee, alternatively, has contended that even assuming assessing officer's contention to be correct, then assessee's plea is regarding passive user of the truck. He has contended that when the truck is kept ready for use, then also the assessee is entitled to depreciation on truck. He has contended that the reason of assessing officer recorded in this regard was vague and rather genuinely non existence. He has cited Moolchand Bajranglal & Anr. v. ITO : [1993]203ITR456(SC) . He has contended that the assessing officer's reasons for belief of escapement of income are simply make-believe reasons. He cited Hira Lal v. CIT .
9. In rejoinder, the learned Departmental Representative of revenue has contended that a misstatement in notice is not fatal. He has cited Rajendranath v. CIT : [1979]120ITR14(SC) . He also has contended that the escapement of income is there as returned income was of Rs. 1.93 lakhs whereas the assessed income of Rs. 5.83 lakhs. He has contended that once an assessment is reopened under section 148 on one ground, then assessing officer can travel on other grounds also.
10. We have considered the rival contentions, the relevant material record as also the cited decisions. In : [1999]236ITR34(SC) (supra), the Hon'ble Supreme Court held that while considering as to whether commencement of reassessment proceedings was valid, the court can only consider whether there was a prima facie case for reassessment, and sufficiency of material cannot be considered. In : [1993]203ITR456(SC) (supra). The Hon'ble Supreme Court held (as mentioned portion f & g) on page 458 of the report) that :
'sufficiency of the reasons for forming the belief is not for the court to judge, but it is open to an assessee to establish that there in fact existed no belief of that the belief was not a bona fide one or was based on vague, irrelevant and non-specific information. To that limited extent, the court may look into the conclusion arrived at by the Income Tax Officer and examine whether there was any material available on the record from which the requisite belief could be formed by the Income Tax Officer and further whether the material had any rational connection with or alive link for the formation of the requisite belief.'
In CIT v. Laxmi Debi Mehta (1993) 70 Taxman 399 (Cal), the Hon'ble Calcutta High Court has held that as first assessment had failed to result in a valid assessment due to lapse on the part of income-tax authorities, they were disentitled to initiate fresh assessment proceedings on identical facts. In Jindal Photo Films Ltd. v. Dy. CIT : [1998]234ITR170(Delhi) , the factual position was that the Income Tax Officer reopened assessment and withdrew the deduction under section 80-I which he had granted earlier. Between the date of orders of assessment sought to be reopened and the date of forming opinion by the Income Tax Officer, nothing new had happended. There was no change of law, no new material had come on record, and no information was received. It was found that it was, mere fresh application of mind by same Income Tax Officer to same set of facts, and that till amounted to mere change of opinion. The notices for reassessment were accordingly held to be invalid. Considering all the facts and circumstances of the case as also the legal position as discussed above, we are of the opinion that no fresh/new material/information having come on record or within the notice of assessing officer so as to provide nexus between the material/information and tile formation of requisite belief, the reason for belief of wrong claim of depreciation on truck recorded by assessing officer, is found to be in the nature of vague or genuinely non-existing or make belief, and not of the nature to induce any bona fide belief. As regards the reason regarding wrong claim to depreciation on A.C the same is obviously non-existent as no such claim was ever made in the year under appeal. In view of our above discussion, taking a circumspect view of the entire fact-situation in its totality, we find the conclusion drawn by learned Commissioner (Appeals) regarding the initiation of proceedings under section 148 being not legal and, in turn, the assessment framed pursuant thereto to be not sustainable in law to be quite proper and justified, and suffering from no infirmity. We, therefore decline to interfere with the same.
11. In the result, the revenue's Appeal No. 452/Jdpr/1998 is dismissed.