G.C. Gupta, J. - (1.) The assessee has come up in appeal under Sec. 260A of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') against an order of the Income Tax Appellate Tribunal, 'C' - Bench, Kolkata dated 7th July, 2005 in ITA Nos. 1421, 1422 and 1423 (Kolkata) of 2004 for the assessment years 1990 -91, 1991 -92 and 1992 -93.
(2.) By the order dated 18th December, 2006 a Division Bench of this Court admitted this appeal on the following substantial questions of law: - - "I) Whether on the facts and in the circumstances of the case, the learned Tribunal erred in law in upholding the action of reassessment, when admittedly the approval accorded by the concerned authority for such reopening was given in a mechanical manner which was itself without jurisdiction and bad in law? II) Whether on the facts and in the circumstances of the case when the jurisdictional aspect in according the approval for reopening was absent, the action of the learned Tribunal in upholding such approval and thereafter in further upholding the assessment which was beyond four years is perverse -
(3.) Briefly stated the facts and circumstances of the case are as follows: - - "The assessee an individual is engaged in the business of trading in various goods under the name and style of Ujjwal Steel Udyog which is a proprietorship concern. Along with the return of income for the assessment year 1995 -96 the assessee enclosed the particulars of accounts relating to earlier years claiming that there was no taxable income with respect to those years. The assessing officer on the basis of the information supplied by the assessee and other information in his possession came to the conclusion that income had escaped assessment for the assessment years 1990 -91, 1991 -92 and 1992 -93. By the order dated 26th March, 2001 the assessing officer recorded the reasons for initiating the reassessment proceedings under Sec. 147 of the Act for the aforesaid years. Thereafter, the assessing officer obtained approval of the Additional CIT under Sec. 151(2) of the Act by the order dated 29th March 2001. Thereafter the assessing officer issued notice under Sec. 148 of the Act dated 30th March 2001 to the assessee. The assessee filed his return consequent to the aforesaid notice. After hearing the assessee the assessing officer completed the assessment for all three years 1990 -91, 1991 -92 and 1992 -93 by separate orders passed, u/s. 143(3) read with s.147 of the Act, on 31st March, 2003. The assessee preferred an appeal against the order of the assessing officer before the Commissioner of Income Tax (Appeals) (hereinafter referred to as the 'CIT(A)'). The assessee challenged the validity of the notice under Sec. 148 and the additions or disallowance made by the assessing officer. The CIT(A) by an order dated 9th June, 2004 while granting partial relief to the assessee rejected the assessee's plea as regards the validity of the notice issued under Sec. 148 and held as follows: - - "The Ld. AR has referred a case law reported in : 79 ITR 603 SC (1971) in the case of Chhugamal RajPal v/s. S.P. Chaliha & Ors. The particular case referred to above deals with different facts as to whether the communication, required investigation, can be a basis for reopening an assessment and that was the moot point in that case. The Supreme Court has observed that Commissioner has mechanically accorded permission to reopen the assessment and thereby notice issued u/s. 148 was treated as invalid. In the said case the Hon'ble Supreme Court has observed that if only the Commissioner had read the report carefully, he could never have come to conclusion on the material before him that it is a fit case to issue notice u/s. 148. The issue of the present case is totally different. In the instant case, for the AY 90 -91 it was found by the AO that investment to the extent of Rs. 77,910/ - for purchasing of truck was not disclosed before the I.T. Authorities, hence the appellant had taxable income for the relevant period but the same was not shown before the Department. In fact, the appellant did not file any return for any of the 3 assessment years under question before receipt of notice u/s. 148 of the Act from the Department. The balance sheet and P & L A/c for all the assessment years under consideration were filed along with the return for the assessment year 1995 -96 only. The AO after duly recording the reasons has sent his proposal to the higher authority i.e. Addl. CIT and after scrutinizing the case, the Addl. CIT was also satisfied that the income has escaped assessment for the relevant assessment years and thereby she concluded that it was a fit case for reopening and thereby accorded her approval. The case cited by the Ld. AR apparently suggests that there is no material fact which may lead to the conclusion as derived by the Addl. Commissioner for according her approval. But in the instant case, the income has actually escaped assessment. Investment made towards purchase of truck was never disclosed before the I.T. Authorities. Hence I think that the present case is clearly distinguishable and there was enough reason for the AO to send proposal before the Addl. CIT and the Addl. CIT has rightly given her approval for reopening the case. Thereafter, notice were issued by the AO to the appellant. The Addl. CIT has put her signature on 29.03.01 and thereafter the AO issued notice u/s. 148 to the appellant before expiry of 31.03.01 and the said notice was served within 10 days which is quite reasonable time, according to my opinion. The Apex Court is also of the same view stating that though the notices were served beyond the prescribed time, they were saved u/s. 4 of the Amending Act as held by the Hon'ble Supreme Court. And thereafter before expiry of the due date, the notice was issued by the AO and it was served within 10 days which is quite reasonable period and to this extent, the submission made by the appellant is incorrect and not sustainable. Accordingly, I reject the ground of the appellant on the issue of validity of notice.";