Income Tax Appellate Tribunal - Jodhpur
Assistant Commissioner Of Income Tax vs L.N. Mehta on 9 July, 2002
ORDER
S.R. Chauhan, J.M.
1. This appeal by Revenue for asst. yr. 1981-82 is directed against the order of Dy. CIT(A), Jodhpur, dt. 18th Dec,, 1993.
2. We have heard the arguments of both the sides and also perused the records.
3. The Revenue has raised the sole ground disputing the Dy, CIT(A)'s order in cancelling the assessment made under Section 147. The learned Departmental Representative of Revenue has contended that though the income assessed in reassessment was less than Rs. 50,000, but that will not make the information with AO to be for a belief of, escapement of income of less than Rs. 50,000. He has contended that in fact at the time of recording of reasons regarding income have escaped the AO had estimated the escaped income at more than Rs. 50,000, so the initiation of proceedings under ss, 148 and 147 was valid. He has supported the AO's order. As against this the learned authorised representative of assessee has contended that the original assessment under Section 143(3) was completed at an income of Rs, 16,000, He has contended that despite demand, the reasons were not supplied that the additions have been made on estimate basis. He has contended that after original assessment, the AO had no further new material/evidence with him for reassessment, so initiation for the same was merely on the basis of suspicion and not on belief. He has relied on his written submission and following citations :
(a) ITO v. Smt Chakka Bai (1985) 23 TTJ (Jp) 334 : (1986) 15 JTD 328 (Jp);
(b) Rashes Commission Corporation v. Asstt. CIT (2001) 70 TTJ (Mum) 654;
(c) ITO v. Lakhmani Mewal Das (1976) 103 ITR 437 (SC);
(d) Indian Oil Corporation v. ITO (1986) 159 TTR 956 (SC);
(e) Milan Supari Stores v. Asstt. CIT (1992) 194 JTR 72 (MP); and
(f) Tribunal's order dt. 31st Aug., 2000 passed in ITA Nos. 1022 to 1026/Jp/1993 [reported as ITO v. Mahesh Kumar Pandya (2001) 73 TTJ (Jet) 194--Ed.) In the written submission of assessee, it has been contended that the AO's belief that income escaping assessment was more than Rs. 50,000 was not well founded as is evident from the fact that the additions made were of Rs. 40,520 and the additions were of general nature based on discretion and estimate of AO and the same were made in professional income on account of marriage expenses and deficit in cash flow. It has been contended that all facts pertaining to these issues were already within the knowledge of AO while completing original assessment under Section 143(3), and no new facts has come to his knowledge. It has been contended that these additions have been made by AO estimating the income/expenditure on conjectures and surmises and by making hypothetical calculations, without there being any material
4. In rejoinder, the learned Departmental Representative of Revenue has contended that supplying of reasons to assessee is not essential.
5. We have considered the rival contentions, the relevant material on record as also the cited decisions. In 15 JTD 328 (supra), Jaipur Tribunal has held that at the time of initiation of proceedings ITO must ensure that the amount of escapement of income is Rs. 50,000 or more, and the income that is finally assessed, as such, should also be not less than Rs. 50,000. In (1986) 159 ITR 956 (SC) (supra), it has been held that to confer jurisdiction under s, 147(a) to reopen assessment the ITO must have reason to believe that escapement was due to assessee's failure to disclose fully and truly all material facts necessary for assessment of that year and there must be material for coming to the above conclusion. In (1960) 194 ITR 72 (MP) (supra), the reasons were hot supplied to the assessee despite specific request, the Hon'ble High Court abashed the notice issued under s, 148 for. reassessment. In the Tribunal's order dt. 31st Aug., 2000, rendered in ITA Nos. 1022 to 1026/Jp/93 in the case of Mahesh Kumar Pandya (supra), it has been "held that there must be some material/evidence on record to induce AO to entertain belief as such of escapement of income as distinguished and mere 'suspicion' for the same. It has been held therein that when the information, to constitute reason for belief of escapement of income is general and non-specific, the same, in certain circumstances be examined in the context of ensuing assessment. In that view of the matter, considering all the facts and circumstances of the case, including the fact that the income assessed in reassessment is less than Rs. 50,000, we are of the view that the AO did not have reasons to believe escapement of income of Rs. 50,000 or more and in turn, we find no fault with the conclusion drawn by learned CIT(A) that the notice of reopening assessment issued by AO under Section 148 was barred by limitation of time [under Section 149(1)(a)(ii)] due to seven years having lapsed from the end of asst. yr. 1981-82, and that the reassessment was, therefore, time-barred. As such we find the learned CIT(A)'s impugned order to be quite justified, and so we make no interference therein.
6. In the result, this appeal of Revenue is dismissed.