COMMISSIONER OF INCOME TAX Vs. SADIQUE UMMER

JUDGEMENT

(1.) THE appeals are filed by the revenue against the orders of the Tribunal holding that reassessments completed in the assessees case under Section 147 of the Income Tax Act, 1961, were invalid for the assessment years 1998 -99 and 1999 -2000 as time barred. It is the finding of the Tribunal that the assessing officer had no material to reopen the assessment and in fact, he conducted enquiries and collected information only after reopening the assessment under Section 147 of the Act.

(2.) AFTER hearing counsel appearing for the appellant as well as counsel appearing for the assessee, we notice that the Tribunal has decided the appeals without reference to records which include the reason recorded by the officer for reopening the assessment. Admittedly, the assessee is a freelance anaesthetist practising in four hospitals in Kanhangad. The assessing officer has stated that he collected information from hospitals about charges being collected from patients and paid to the respondent, ranging from Rs. 750 to Rs. 1,500 per operation and he has attended 1600 operations in the first year and in the next year, he has attended 1147. As against so much of the charges so collected, the assessee has returned only a meagre income of Rs. 1,13,830 for the assessment year 1998 -99 and Rs. 1,30,800 for the assessment year 1999 -2000. Based on the information collected from the hospitals, the assessing officer estimated the income by applying the minimum rate charged for each surgery and made assessment under Section 147.

(3.) IT is seen from the reasons recorded in the assessment order that the assessing officer, prior to the issuance of notice under Section 147, conducted enquiry in the hospitals about the payments made to the assessee and he got full information about the number of surgeries attended by the respondent as anaesthetist and the amounts paid to him. On comparing the income received and the income returned by the assessee, the assessing officer noticed that the assessee has disclosed less income. He, therefore, reopened the assessment under Section 147 and issued revised assessment. It is also to be noted that after reopening the assessment, the assessing officer collected further information to complete reassessment which is also permissible under the Act. In our view, the finding of the first appellate authority as well as the Tribunal that the assessing officer had no material to believe that the income assessable has escaped is wrong and contrary to facts. The Tribunal has not cared to verify the records which contained the reasons recorded by the assessing officer for reopening the assessment. Admittedly, the assessee had not maintained any books of account, but was returning the income on estimation basis which was found to be incorrect based on the information collected from hospitals where he was practising. Therefore, we find that the reopening of assessments was perfectly valid and was within time. We, therefore, set aside the orders of the Tribunal and that of the first appellate authority and remand the matter to the Tribunal for a decision on the merits after hearing both sides. The appeals are allowed as above.