RAJESH BALIA, J. - (1.) THIS appeal is directed against the order of Tribunal, Jodhpur Bench, Jodhpur dt. 26th May, 2003 and relates to asst. yr. 1986 -87. The order of the Tribunal is common deciding appeals arising out of asst. yrs. 1986 -87 to 1988 -89.
(2.) THE brief facts giving rise to this appeal are that the assessee is engaged in the activity of money -lending and goldsmithy. A search was conducted in the premises of the assessee on 18th Nov., 1988 and following assets/valuable articles were found: (a) Business income : Rs. 24,00,000(Including money -lending and pawning)(b) Investment in house : Rs. 3,73,000(c) Unaccounted marriage expenses : Rs. 1,50,000 - - - - - - - - - - - - - - -Rs. 29,23,000 - - - - - - - - - - - - - - - Besides those, some papers were also found during the course of search. During the course of assessee's statement under Section 132(4), he agreed to surrender Rs. 24,00,000 as his income from money -lending and goldsmithy business, investment, unexplained investment in house amounting to Rs. 3,73,000 and unaccounted marriage expenses amounting to Rs. 1,50,000. In all Rs. 29,23,000 were surrendered as his income from money -lending and goldsmithy which is represented through aforesaid assets found during the search. As a result of search, order under Section 132(5) was passed by Asstt. CIT, Ward -I, Jodhpur, with previous approval of Dy. CIT, Jodhpur, for the purpose of retaining the assets seized during the course of search by. estimated assessment of the tax liability which may arise as a result of material discovered during the aforesaid search. In the case of assessee, he assessed the tax liability for three asst. yrs. 1986 -87, 1987 -88 and 1989 -90 to the tune of Rs. 18,11,000. After the order under Section 132(5) on 10th March, 1987, notices under Section 148 were issued for asst. yrs. 1986 -87, 1987 -88 and 1988 -89. Year 1989 -90 being the assessment year relevant to previous year ending on 31st March, 1989 during which search was conducted, the necessity of issuing notice under Section 148 did not arise.
(3.) THE Tribunal has quashed the notices issued under Section 148 inter alia on the ground that the satisfaction of ITO about the escapement of income could not be discovered from the reasons stated by him which are vague and which are not founded on existing material on applying his mind thereto and the notices have been issued purely following the order passed under Section 132(5) without application of his mind to the material before it. It was pointed out that in the order under Section 132(5) itself it has been stated that material found during search shall be looked into by the AO during the assessment proceedings clearly indicates that order under Section 132(5) itself was not founded on any analysis of the documents or material seized during search. Hence, it could not provide basis for formation of necessary belief required under Section 147 before issuance of notices under Section 148.;