COMMISSIONER OF INCOME TAX Vs. B R VASA

JUDGEMENT

(1.) The facts found and/or admitted in these proceedings, inter alia, are as follows : B. R. Vasa, the assessee, had been assessed to income-tax in the assessment year 1947-48, the relevant previous year being the one ended on the 31st March, 1947. Subsequently, on the 29th February, 1964, it was found that in the said year the assessee had made deposits totalling Rs. 56,996 in an account with the United Bank of India at Bombay which had not been disclosed by the assessee in his return. With the approval of the CBDT, on the 29th March, 1964, a notice under Section 147 of the I.T. Act, 1961, was issued and served on the assessee. Explanations given by the assessee in reassessment proceedings were rejected and the said deposits were added to his total income and brought to tax.

(2.) Being aggrieved, the assessee preferred an appeal before the AAC, who confirmed the reassessment. The assessee preferred a further appeal to the Tribunal. It was contended before the Tribunal for the first time that the reassessment proceedings under Section 34 of the Indian I.T. Act, 1922, had become time-barred on the 31st March, 1962, in the instant case and could not have been validly initiated thereafter. This contention was sought to be supported by the decision of the Supreme Court in J. P. Jani, ITO v. Induprasad Devshankar Bhatt [1969] 72 ITR 595. It was contended on behalf of the revenue on the other hand that the decision in J. P. Jani was on the basis of a concession by the revenue to the effect that the right of the ITO to reopen the assessment under the Indian I.T. Act 1922, had become time-barred. There was no such concession in the instant case. It was submitted that even if the earlier Act of 1922 had not been replaced by the I.T. Act, 1961, the ITO could have validly initiated proceedings under Section 34(1)(a) of the earlier Act.

(3.) The Tribunal, however, on the basis of J. P. Jani came to the conclusion that under the later Act of 1961 a notice under Section 148 for reopening an assessment could not be issued where such right to reopen had already become barred under the earlier Act on the date when the new Act came into force. The Tribunal found that in the instant case the right of the revenue to proceed under Section 34(1)(a) of the earlier Act had become time-barred after the 31st March, 1962, and could not be revived thereafter. The Tribunal, however, found that in March, 1964, the ITO had reason to believe that income, profits and gains of the assessee aggregating Rs. 1 lakh or more had escaped assessment in the years 1947-48 and 1948-49. The Tribunal, accordingly, allowed the appeal of the assessee.