C I T JODHPUR vs. SHRI RAMA KISHAN LEELA

ITA/109/2006HC RajasthanRJHC01020654200509 October 2006Author: RAJESH BALIA,GOPAL KRISHAN VYAS5 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the issues raised in the appeals were of academic importance. It reasoned that the first reassessment proceedings, initiated after the search on 15/03/1990, had not attained finality and were pending due to appellate directions for a fresh assessment. Consequently, the second reassessment proceedings, initiated on 28/03/1996, became infructuous as two assessment proceedings could not run concurrently. The Tribunal stated that once the first reassessment proceedings were pending, the entire assessment was open, and any subsequent reassessment proceedings would be superfluous. The Tribunal also noted that it had categorically found M/s Jagdamba Griha Nirman Sahakari Samiti Ltd. to be a separate entity from the respondent assessee, a finding of fact not challenged by the Revenue. Therefore, the reassessment order dated 30/03/1998 could not be sustained on this ground as well. The appeals were dismissed.

What were the facts?

The Revenue has appealed against a common order of the Income Tax Appellate Tribunal (ITAT) dated 28/02/2005, which quashed reassessment orders for assessment years (AYs) 1985-86 and 1986-87 concerning the respondent assessee, Shri Ram Kishan Leela. Initially, the assessee filed returns declaring losses. A search on 15/03/1990 led to reassessment proceedings under Section 147/148. Assessments were concluded under Section 143(3) read with Section 147. The CIT(Appeals) deleted additions, but the ITAT set aside this order, directing a fresh assessment. Subsequently, on 20/03/1996, the Assessing Officer (AO) received information from the ADIT regarding potential escaped income of M/s Jagdamba Griha Nirma Sahakari Samiti Ltd. This led to a second set of reassessment proceedings initiated by issuing a notice on 28/03/1996. A second reassessment order was passed on 30/03/1998. The CIT(Appeals) quashed this second reassessment order, holding the initiation of proceedings under Section 148 to be bad, a conclusion upheld by the ITAT.

What were the issues?

1. Whether the reassessment proceedings initiated for AYs 1985-86 and 1986-87 can be sustained, considering the pendency of earlier reassessment proceedings and the ITAT's direction for a fresh assessment in those proceedings. Assessee's Contention: The assessee implicitly argued, through the ITAT's order, that the second reassessment proceedings were bad because the first reassessment proceedings had not attained finality and were restored to the AO's file. The assessee also relied on the ITAT's finding that M/s Jagdamba Griha Nirma Sahakari Samiti Ltd. is a separate entity, implying that information pertaining to it should not form the basis for reassessment in the assessee's case. Revenue's Contention: The Revenue challenged the validity of the ITAT's finding that the reopening of assessment for these two years could not be sustained. The Revenue sought to argue that the second reassessment proceedings were validly initiated and that the ITAT erred in quashing them.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 143(3)

AI-generated summary — verify with the full judgment below

- 1 - 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, has challenged the common order passed by the Tribunal on 28/2/2005, whereby, reassessment orders for the aforesaid two assessment years 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 (Appeals) 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 assessment year 1985-86 on 30/3/1985 declaring loss of Rs. 69,735/- and, thereafter on 31/3/1986 another return was filed under Amnesty Scheme declaring loss of Rs.32,565/-. A search was conducted at the assessee's

The order continues below.

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