I.S.Verma, - (1.) ALL these appeals are by the assessee and involve common issues, one of which is relating to validity of notices issued under Section 148 of the Income-tax Act, 1961 (hereinafter referred to as 'Act') for assessment years 1976-77 to 1982-83.
(2.) I have heard the counsel for the assessee as well as the learned DR. The brief facts necessary for the disposal of this issue and as have been revealed from the records are as under : 3.1 The appellant had been assessed for the assessment years 1976-77 to 1982-83 in the regular course of action, but after search having been conducted in appellant's case in August, 1984 proceedings under Section 147 of the Act were initiated for all these assessment years by issuing notices under Section 148 of the Act and reassessments were completed. Date of issuing notices under Section 148 of the Act and the date of reassessment orders are as under :- JUDGEMENT_211_TLIT0_20030.htm 3.2 The appeal for the assessment year 1976-77 was decided by the CIT(A), Agra vide order dated 25-5-1987 and for other assessment years vide another consolidated order dated 25-5-1987 whereby all the assessments were annulled for want of service of notices under Section 148 of the Act on the assessee. 3.3 Against the order of CIT(A) the department preferred appeals for all the years for the ITAT on 27th Sept., 1987. The Hon'ble Tribunal vide order dated 28-8-1990 dismissed all the departmental appeals. 3.4 Against the order of ITAT, the department preferred reference applications before the ITAT under Section 256(1) of the IT Act, 1961. These applications were also rejected vide order dated 26-3-1991. 3.5 Thereafter, the department preferred reference applications under Section 256(2) of the IT Act, before the Hon'ble Allahabad High Court and the same have been admitted and the order is reported in 1994 U.P.T.C.P. 259. 3.6 The reference applications for all the years admitted by the Allahabad High Court are still pending for final disposal. 3.7 During the pendency of appeals before the ITAT notice under Section 148 of the I.T. Act were again issued for all these assessment years as under :- JUDGEMENT_211_TLIT0_20031.htm 3.8 Thereafter the assessee filed a writ petition before the Hon'ble High Court at Allahabad and the proceedings were stayed as per order of the Hon'ble Allahabad High Court dated 20th March, 1990. 3.9 The assessee's writ petition was ultimately decided on 18-7-1996 where it was mentioned that "since the grounds raised here in this petition by the petitioner are available to be raised before the appropriate authority while issuing cost as asked for by the impugned notices it is not necessary to enter into the genesis of the case to consider the merits for issuance of the impugned notices, the disputed questions of fact will require to be gone into which cannot be done in writ jurisdiction". 3.10 The assessments in consequence upon fresh notices under Section 148 issued on 29-3-1988 and 12-5-1988 were completed on 12-9-1996. 3.11 The assessee went in appeal before the CIT(A) who dismissed the assessee's appeals for all the aforesaid assessment years as per order dated 25-2-1997 which is under appeal before me.
(3.) 1 The counsel for the assessee first of all submitted that since revenue's appeals were pending before the ITAT, the Assessing Officer had no jurisdiction to issue fresh notices on 29-3-1988 (for assessment years 1976-77 to 1980-81) and on 12-5-1988 (for assessment years 1981-82 and 1982-83). In support of this submission, he relied on the decisions reported as under: Kalawat Devi Harlalka v. CIT AIR 1968 (SC) 162 S. Sankappa v. ITO AIR 1968 (SC) 816 Manoo Lal Kedarnath v. Union of India [1978] 114 ITR 884 (All.) A.S.S.P. & Co. v. CIT [1988] 172 ITR 274 : [1986] 27 Taxman 623 (Mad.) S.P. Kochhar v. ITO [1984] 145 ITR 255 : [1983] 13 Taxman 414 (All.) 671 ITR 269 (AlLXsic.) Commercial Art Press v. CIT [1978] 115 ITR 876 : [1979] 1 Taxman 38 (All.) CIT v. P. Krishnakutty Menon [1990] 181 ITR 237 : [1989] 47 Taxman 31 (Ker.). 4.2 Learned counsel further submitted that the observations of the CIT(A), while annulling the original assessments, were not directions for issuing fresh notices under Section 148 of the Act because after having annulled the assessments, the CIT(A) had no reason to give any direction. Driving home this plea, the learned counsel, after referring to the provisions of Section 251(1) of the Act, submitted that if the assessment is annulled, there is no question of remitting the matter back to the Assessing Officer because the powers of the CIT(A) are either to confirm or to reduce or to enhance or to annul or to set aside the assessment. According to him, the powers of annulment and to set aside are different powers and if the assessment is annulled the assessment cannot be taken as having been set aside the different powers and if the assessment is annulled the assessment cannot be taken as having been set aside, meaning thereby, that there is no question of issuing any direction. He, therefore, submitted that the notices under Section 148 of the Act issued on 29-3-1988 and 12-5-1988 cannot be said to be in consequence upon any direction of the CIT(A) which in turn means that the provisions of Section 150(1) cannot be invoked by the revenue in its favour. The counsel supported this plea by further bringing to me notice that the same CIT(A) had in case of assessee's sister concern M/s. Kanhaiya Ice Manufacture, while deciding their appeals for the same assessment year as per his order dated 13-11-1998, accepted this preposition of law as per para 9.10 of that order. The learned counsel further submitted that even if it is taken that the observations of the CIT(A) were the directions then also it was only the limitation which could be waived but condition relating to sanction of higher authorities could not be waived. He therefore, submitted that the notices for assessment years 1976-77 to 1979-80 having been issued without prior sanction of the Central Board of Direct Taxes were bad in law and consequently the assessments framed on 12-9-1996 were also bad in law.;