Commissioner Of Income Tax – I v. Shri Ram Kishan Leela

D.B.INCOME TAX APPEAL NO.107/2006 Commissioner of Income Tax – I VS. Shri Ram Kishan Leela D.B.INCOME TAX APPEAL NO.109/2006 Commissioner of Income Tax – I VS. Shri Ram Kishan Leela DATE OF ORDER : 9/10/2006 HON'BLE SHRI RAJESH BALIA, J. HON'BLE SHRI GOPAL KRISHAN VYAS, J. Mr.Vivek Shrimali for Mr.Sangeet Lodha, for the appellants. The revenue, at whose instance these appeals have been preferred relating to assessment years 1985-86 and 1986-87, haschallenged the common order passed by the Tribunal on 28/2/2005,whereby, reassessment orders for the aforesaid two assessment years1985-86 and 1986-87 in the case of respondent assessee have beenquashed. The appellant has sought to raise the question aboutvalidity of the finding reached by the Tribunal as well as by CIT(Appeals) that reopening of the assessment for these two years cannotbe sustained. The facts of the case are that, in the first instance, therespondent assessee has filed return for assessment year 1985-86 on30/3/1985 declaring loss of Rs. 69,735/- and, thereafter on 31/3/1986another return was filed under Amnesty Scheme declaring loss ofRs.32,565/-. A search was conducted at the assessee's premises on15/3/1990 and proceedings were initiated under Section 147 read withSection 148 of the Income Tax Act, 1961. Finally, assessments wereconcluded under Section 143 (3) read with Section 147 for the twoassessment years determining income from property dealing atRs.32,000/- and 34,000/- respectively for two assessment years. On appeal, the CIT (Appeals) deleted the additions madefor both the years, which order was set aside by the Tribunal andAssessing Officer was directed to make fresh assessment in terms of thedirections issued in the order dated 8/1/2002 and as a result thereofthe assessment orders were reframed under Section 143(3) read withSection 147 on 28/8/2003. Meanwhile, on 20/3/1996 the Assessing Officer received acommunication from A.D.I.T. along with zero copies of books allegedlybelonging to M/s Jagdamba Griha Nirma Sahakari Samiti Ltd. Jodhpursuggesting that income belonging to the society had escapedassessment. It appears that when notice under Section 148 was issued to the respondent assessee in pursuance of information received fromAddl. Director of Inspection, Income Tax that the material relating toM/s Jagdamba Griha Niram Sahakari Samiti Ltd., another notice underSection 147/148 was issued to the assessee. The appeal against theearlier assessment order passed under Section 143(3) read with Section147 was pending in view of the fact that the Assessing Officer resortedto reassessment proceedings once again by issuing notice on 28/3/1996with the permission of Addl.CIT in relation to the respondent assessee. In response to reassessment proceedings, the AssessingOfficer passed second reassessment order under Section 143(3) readwith Section 147 on 30/3/1998. On appeal, the CIT (Appeals) quashedthe reassessment order by holding that initiation of proceedings underSection 148 was bad. That conclusion has been upheld by the Tribunalvide order under appeal. Having given our careful consideration to the facts andcircumstances of the case and the submissions made by learned counselfor the appellant, we are of the opinion that issues raised in theseappeals are of academic importance and from the narration of facts it isapparent that first reassessment proceedings initiated after the searchwas conducted at the premises of respondent assessee on 15/3/1990 hadnot attained finality and as a result of orders of the appellate forum the reassessment proceedings for the assessment years 1985-86 and 1986-87in pursuance of notice issued prior to one in question became pendedand final assessment orders were passed on 28/3/2003. Having given our careful consideration to the facts andcircumstances of the case and the submissions made by learned counselfor the appellant, we are of the opinion that issues raised in theseappeals are of academic importance and from the narration of facts it isapparent that first reassessment proceedings initiated after the searchwas conducted at the premises of respondent assessee on 15/3/1990 hadnot attained finality and as a result of orders of the appellate forum the reassessment proceedings for the assessment years 1985-86 and 1986-87in pursuance of notice issued prior to one in question became pendedand final assessment orders were passed on 28/3/2003. Apparently, two assessment proceedings could not havecontinued together and at parallel length. The original reassessmentproceedings have already been restored to the file of Assessing Officer,consequently, second reassessment proceedings become infructuous asthe orders can be passed on the basis of available material includinginformation received lateron while finalising the proceedings underSection 143(3) read with Section 147 in pursuance of the reassessmentproceedings commenced earlier to one in question. While the firstreassessment proceedings were pending, there cannot be secondreassessment proceeding. It is also settled that once the reassessmentproceedings are pending, the entire assessment is open and is notconfined to scope of reasons recorded by the Assessing Officer beforeassuming jurisdiction. The setting aside of the reassessment proceedingscommenced vide notice dated 28/3/1996 could not have beenresurrected and all material must be taken into consideration in makingfinal assessment in terms of the directions of the Tribunal while settingaside the order of CIT (Appeals) and directing the Assessing Officer tomake fresh assessment vide its order dated 8/1/2002. The Tribunal has categorically reached a finding in theseappeals that M/sJagadamba Griha Nirman Sahakari Samiti Ltd, Jodhpur, is a separate entity with the respondent assessee. On the basis of thisfinding also, the reassessment order framed in favour of respondentassessee could not have been sustained. The finding thatM/s.Jagadamba Griha Nirman Sahakari Samiti Ltd. and respondentassessee are two separate entities and independent of each other is afinding of fact and that finding has not been challenged before us. Forthat reason also assessment order dated 30/3/1998 cannot be sustained.Viewed from any angle, the questions raised in these appeals are ofacademic importance and cannot be considered as questions of lawrequiring consideration in these appeals. Accordingly, both the appeals fail and are herebydismissed. (GOPAL KRISHAN VYAS), J. (RAJESH BALIA), J. Pankaj Baweja.