- (1.) This appeal under Section 260A of the Income-tax Act, 1961 is at the instance of an assessee and is directed against order dated October 28, 2003 passed by the Income-tax Appellate Tribunal, 'D' Bench, Calcutta, in ITA No.43 (Kol) of 2003 relating to the Assessment Year 1992-93. A Division Bench of this Court by order dated December 23, 2004 admitted the present appeal on the following substantial questions of law: "I) Whether having regard to the fact that the assessment for the assessment year 1992-93 having been made under Section 143(3) on 22.3.1995 and having regard to the admitted facts that the search and seizure was made in the year 1993 and the deposition of Mr. D.K. Bal of M/s. D.R. Enterprises having been made on 19th August, 1993 in the year 1993 itself at the time of the search and seizure, the Tribunal was justified in holding that the initiation of the proceedings under Section 148 of the Act was on the basis of confirmed information regarding the additional income suppressed by the assessee and ascertained from the accounts of the developer viz. M/s. D.R. Enterprises when the entire information and the sale of land and sale consideration received was before the Assessing Officer at the time of the original assessment under Section 143(3) which had been subsequently quashed and/or set aside by the Tribunal by its order dated 17th May, 1996? "ii) Whether on the facts and in the circumstances of the case when the material of which the purported proceedings under Section 148 of the Act had been made as recorded in the reasons recorded were before the Assessing Officer at the time of original assessment under Section 143(3) of the Act and on the basis of which the sale consideration on the sale of land was sought to be taxed and subsequently quashed and/or reversed by the Tribunal, the Assessing Officer had any competence, jurisdiction and authority under Section 148 to reopen the proceeding on a mere change of opinion when there was no new or fresh information before him while making reassessment but which was there at the time of making the original assessment?"
(2.) The facts giving rise to filing of this appeal may be summed up thus: a) The assessee filed the original return of income on 31st March, 1994 showing net loss of Rs.5,77,036/-. The assessment was completed under Section 143(3) of the Act on 22nd March, 1995 computing the net total income of the assessee as Rs.11,33,500/-. Being aggrieved by the said order, the assessee preferred an appeal before the CIT (A), Central-II, Calcutta and the main issue of agitation before the CIT (A) was against the assessment of Rs.9,87,000/- as income from other sources being the money taken by the assessee from the alleged sale of land which was to be acquired by the Government of West Bengal as per Notification issued under the provision of the Urban Land Ceiling & Registration Act, 1975. b) The CIT(A) dismissed the appeal with the observation that there was nothing wrong in the action of the Assessing Officer in bringing to tax the amount received by the assessee on the sale of plot of land. c) The assessee filed a further appeal before Income-tax Appellate Tribunal against the said order of the CIT (A). The Income-tax Appellate Tribunal, 'E' Bench, by its order dated 17th March, 1996 quashed the orders of both the CIT(A) and the Assessing Officer by holding that the authorities below were not justified in bringing to tax the sale consideration of Rs.9,87,000/- as illegal income of the assessee from other sources. d) It appears that the Revenue moved this High Court against the order of the Tribunal below and a Division Bench of this Court by its order dated 25th January, 2001 in ITA No.11 of 1997 dismissed the said appeal by recording the following submission of Dr. Pal, the learned counsel appearing on behalf of the assessee: "Dr. Pal, the learned counsel appearing of the assessee submitted that the assessee had offered the sale proceeds of receipt on account of sale of plots of capital gains tax but this was rejected and it was tax as revenue receipts. Finally, the Tribunal also found that it cannot be taxed as revenue receipts. The assessee is still prepared to pay capital gains tax on the sale proceeds on account of sale of plots of land. The learned counsel for the revenue has not seriously objected in case the assessee is prepared to pay the capital tax on the sale proceeds of the plots in question." e) In the meantime, the original assessment order was reopened under Section 147 by issuing a notice under Section 148 of the Act after recording the following reasons: "The assessee owns a Brick Field at Behala. He entered into an understanding with Sri D.K. Bal of M/s. D.R. Enterprises for the development and sale of plots in the brick field. Although the entire brick field was covered under Compulsory Acquisition, the assessee in connivance with the developer sold plots in the brick field illegally. As per the seized books marked BB-8 it was found that the assessee received total amount of Rs.25,80,000 in different years on sale of the plots. Out of that an amount of Rs.16,45,000 was received during the accounting year 1991-92 relevant for the present assessment year. The developer in his deposition confirmed of paying this much of the amount to the assessee. But in the assessment order u/s. 143(3) the amount received on account of sale of plots has been wrongly taken at Rs.9,87,000. Although the amount received by assessee during the relevant account year is Rs.16,45,000." f) No return was filed in compliance of the said notice under Section 148 and consequently, a notice under Section 142(1) of the Act was issued to the assessee. The assessee appeared and stated that the income from the sale of the plots of land as viewed by the Assessing Officer in his earlier order having been quashed, no such issue could be opened for bringing the entire amount of Rs.16,45,000/- to tax as proposed in the proceedings under Section 148 of the Act. g) At that time, the petition under Section 256(3) of the Act at the instance of the Department was pending in the High Court against the order of the Tribunal quashing the order of CIT (A) and the Assessing Officer in the original proceeding. The Assessing Officer held that as the issue in regard to the income from other sources for Rs.9,87,000/- was sub-judice before the High Court, for protection of the interest of the Revenue, the additional amount of Rs.6,58,000/- was also considered as income of the assessee from other sources. h) Being dissatisfied, the assessee preferred an appeal before the CIT (A) and the CIT (A) by his order dated October 30, 2002 was of the opinion that the appeal of the Revenue from the original order and the resultant order having been merged with the order of the High Court, the cause of action for initiating the proceeding under Section 148 did not survive. The CIT(A) thus allowed the appeal of the assessee by directing the Assessing Officer to accept the computation of loss made by the assessee during assessment year. i) Being dissatisfied, the Revenue preferred an appeal before the Income-tax Appellate Tribunal thereby contending that the original assessment was limited to addition of Rs.9,87,000/- whereas the subsequent event in course of search and seizure indicated that Rs.16,45,000/- was received by the assessee during the accounting year 1991-92 which was relevant for the assessment year. It was further contended that the developer in his deposition confirmed that this amount was given to the assessee and this fact would go to show that income of the assessee should be higher than Rs.9,87,000/- and that the initiation of proceeding under Section 148 was on the basis of confirmed information regarding additional income suppressed by the assessee and, therefore, the initiation of action by the Assessing Officer could not be quashed. j) The Income-tax Appellate Tribunal further was of the view that so far as the question of addition of Rs.9,87,000/- was concerned, the issue stood covered by the order of the High Court and the same should be followed as regards the balance. According to the Appellate Tribunal, the position was not clear as to whether in the original books of account these are disclosed by the assessee. k) In such circumstances, the Income-tax Appellate Tribunal remanded the matter back for consideration, as to 1) whether the amount of Rs.16,45,000/- was available in the assessee's account in the original return, 2) whether while computing the sum of Rs.9,87,000/- from undisclosed sources, the additional income was also considered by the Assessing Officer and 3) if this was not considered, in that case, he should give a finding of fact that additional income was not disclosed by the assessee in the original return which had necessitated action to be taken under Section 148 and recompute the additional income of the assessee as provided by the law.
(3.) Being dissatisfied, the assessee has come up with the present appeal. After hearing the learned counsel for the parties and after going through the materials on record, we find that in the earlier proceeding as regards the income of Rs.9,87,000/- from the sale of the land in question, it has been held finally that such amount cannot be taxed as revenue receipt and that the assessee was prepared to pay capital gain tax on the sale proceeds on account of the sale of those plots of land.;