N M VISHWANATH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference arises out of the order of the Tribunal, Bangalore Bench dt. 13th June, 1995 made in ITA No. 985/bang/1989, under Section 256 (1) of the IT Act, 1961 (for short hereinafter referred to as 'the Act'), at the instance of the assesses. The questions referred for our opinion are as under:

(2.) ON the facts and in the circumstances of the case, whether the Tribunal was justified in restricting the interest levied under Section 139 (8) and under Section 217 (1a) of the Act to the figures in original assessment ? 2. Brief facts leading to this reference are as under:

(3.) LATER in the course of search conducted in the premises of the assessee, certain documents were seized. It is seen that the assessee had purchased a site property bearing Nos. 4 and 32, situated at BVK Iyengar Road, Bangalore on 5th Jan. , 1971 for a sum of Rs. 80,000. The total cost of the site including registration came to Rs. 1,05,000. The said acquisition of property was not reflected in the balance sheet along with the wealth-tax report filed for the asst. yr. 1972-73, on the basis of which the wealth-tax assessment was completed. It was not declared in the income-tax asst. yr. 1972-73. Therefore, proceedings for reopening of the assessment, was initiated under Section 148 of the Act with the permission of the CBDT. Notice was duly served on the assessee on 28th June, 1982. The assessee did not file the return of income to the said notice. Hence notice under Sections 142 (1) and 143 (2) was issued on 9th Sept. , 1986, and the same was served on the assessee on 15th Sept. , 1986. There was no response from the assessee to the said notice. Again on 2nd Dec. , 1986 another notice was issued posting the case on 17th dec, 1986 and the same was served on the assessee on 11th Dec. , 1986 and even to this notice there was no response from the assessee. Under those circumstances, the AO added a sum of Rs. 1,05,000 as unexplained investment in the property to the income determined in the original assessment, and passed an order directing payment of tax in a sum of Rs. 1,64,366 which also included interest payable under Sections 139 (8) and 217 (1a) of the Act by means of his order dt. 5th Jan. , 1987.