R.K.Agrawal, Rajes Kumar, JJ. - (1.) The income Tax Appellate Tribunal has referred the following question of law under Section 256 (1) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") relating to the assessment year 1981-82 for opinion to this Court. "1. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT, was in law justified in rejecting the additional grounds challenging the validity of assessment order on the basis of illegal initiation of proceeding Under Section 148 without complying the provision of Section 148(2)?.
(2.) Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal was in law justified in holding that the amendment in the provision of Under Section 139 (8), 215 and 217 instiled with effect from 1.4.85 world be applicable to assessment of earlier years completed after 1.4.75 and so charging of interest in case of assessee Under Section 138 (8) as well as Under Section 217 is perfectly justified as the assessment Under Section 147 has been made for the first time after 1.4.85 and so it is a regular assessment.
(3.) Whether on the facts and in the circumstances of the case, the Hon'ble ITAR was in law justified in treating the assessment of the assessee as regular assessment within the meaning of Section 2 (4) of the I.T. Act, 1961?" 2. The brief facts of the case are that for the assessment year under consideration, a notice under Section 148 of the Act dated 28th February, 1983 was served upon the assessee on 19th March, 1983. In pursuance thereof, return was filed on 10th September, 1984 declaring the total income as nil. The Income Tax Officer has completed the assessment on an income of Rs. 62,450/- vide order dated 19th April, 1986. In the order, interest under Section 139 (8) and Section 217 was also demanded, Assessee filed appeal before the Appellate Assistant Commissioner of Income-tax, Moradabad which was partly allowed Assessee further filed appeal before the Tribunal. Before the Tribunal, the assessee moved an application for the addition of three grounds in the grounds of appeal which are reproduced as follows (1) The finding of the learned Income-tax Officer that the assessee's contention that the books are lost in fire, is untrue, is wrong and unjustified and based on imagination. (2) That the order of the Income-tax Officer made Under Section 143 (3)/l48 dated 17.4.86 is bad in law, invalid and void as the proceedings Under Section 148 are wrong initiated without complying the provision of Section 148 (2) and so assessment should be annulled. (3) The learned Income-tax Officer is wrong and unjustified in charging interest Under Section 139 (8) and Section 217 as the interest is not chargeable at all, because the assessments are not regular assessments Under Section 2 (40), but completed Under Section (3)/148. 3. The assessee vehemently argued for admission of the first, the second as well as the third ground. In regard to the first ground, the plea was that the FIR as lodged by the assessee clearly goes to establish that the books were lost in fore and, therefore, this observation of the ITO that the books were not lost in fire was absolutely false and the observation should be deleted. As regards the second additional ground, the plea was that he had inspected the file and that there was no reasons recorded by the ITO prior to the issue of the notice Under Section 148. He pleaded that since the reasons need to be recorded prior to the issue of the notice, the requirement of Section 148 (2) has not been complied with and, therefore, the proceedings arc invalid and void ab initio In regard to the charging of interest Under Section 139 (8) and Section 217, his plea was that the assessment having been made Under Section 148 though for the first time, and being related to the assessment year 1980-81, the interest would not have been charged as this section was amended for inclusion of assessments made for the first time Under Section 148 only with effect from 1.4,1985. The DR on the additional grounds submitted that the assessee had merely raised these grounds without any basis. In regard to the first ground her plea was whether the books were lost in fire or otherwise the fundamental facts remains uncontroverted was that the hooks were not produced. The other plea raised was that in regard to the lack of jurisdiction of the Assessing Officer, the assessee had hot raised this issue before the CIT(A) nor has he placed the copy, of the reasons recorded which could perhaps indicate what was in the mind of the officer for invoking Section 148. The plea was the argument of me assessee in this regard has to be taken as a mere allegation without adducing of any evidence. In regard to charging of interest Under Section 139 (8) reliance was placed on the Karnataka High court decision [1990 ]183 ITR299 (KAR ), [1990 ]183 ITR299 (Karn ) in the case of CIT v. Deepchand Kishanlal according to which the later legislative intend could and should be taken into account for proper appreciation of the legislative provision.;