COMMISSIONER OF INCOME TAX Vs. BIPIN VADILAL

JUDGEMENT

(1.) THE following question of law has been referred by the Tribunal, Ahmedabad, for the opinion of this Court arising out of its appellate order in ITA No. 1208/Ahd/80 relating to asst. yrs. 1967 -68 and 1968 -69 :

(2.) THE facts necessary for the present purposes are as noticed by the Tribunal in affirming the order of the CIT(A) the assessments for the two years have been reopened by issuing notice on 30th October, 1975. According to reasons recorded by the AO the assessment was reopened on the basis of information which was in the form of law laid down by this Court in CIT vs. Navnitlal Sakarlal (1979) 125 ITR 67 : TC 44R.808. The CIT(A) has found that as the reopening of the assessment was founded on the basis of information contained in an order and not on the satisfaction of the ITO that the escapement of income from assessment is by reason of failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment the case fell within the precincts of s. 147(b) and not under s. 147(a) as it then stood. Under s. 149 limitation for initiating proceeding under s. 147(b) is only four years from the end of relevant assessment year. The asst. yr. 1967 -68 closes on 31st March, 1968, and asst. yr. 1968 -69 closes on 31st March, 1969. The four years in respect of reassessment expired on 31st March, 1992, and 31st March, 1973, respectively. The initiation of reopening proceeding on the basis of judgment delivered on 2nd July, 1974, in October, 1975, is obviously a case falling under s. 147(b) and not under s. 147(a) and beyond four years from the end of relevant assessment year in respect of which reopening proceedings were initiated. Thus the initiation of proceedings under s. 147 was held to be barred by time and assessment founded thereon could not be sustained. On merit also, the Tribunal has held in favour of the assessee. Section 147 at the relevant time read :

(3.) SECTION 148(2) requires ITO to record his reasons for doing so before issuing notice under that section.