MAJINDER SINGH KANG Vs. CIT & ANR.

JUDGEMENT

(1.) This appeal under section 260A of the Income-tax Act, 1961 (for short "the Act"), has been filed by the assessee against the order dated 11-12-2009, passed by the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (in short "the Tribunal"), in I.T.A. No. 343/ASR/2009 in respect of the assessment year 2001-02. The assessee has claimed the following substantial questions of law for determination by this court :

(2.) The facts in brief are that the appellant-assessee filed his return on 29-8-2002, declaring income of Rs. 91,890 plus agricultural income of Rs. 2,03,125. The income was subsequently revised to Rs. 17,60,641 plus agricultural income of Rs. 2,03,125 on 13-2-2003. The case of the assessee was processed under section 143(1) on 18-3-2004, and, thereafter, reassessment proceedings were initiated under section 147 read with section 148. The assessing officer during the reassessment proceedings observed that the revision of return was made after filing of charge sheet by the Vigilance Department on 24-12-2002, the assessee has understated his income and a total amount of Rs. 5,29,86,224 has been earned by the assessee by dubious means. It was further observed that during the accounting period relevant to the assessment year in question, the assessee was the chairman of the Punjab State Forest Development Corporation and he received payments of Rs. 1,23,429 by transfer to his Bank Account No. 01190005761 which included regular transfer of Rs. 2,500 per month besides other amounts. According to the Assessing Officer, the said receipts in the sum of Rs. 1,23,429 were assessable in the hands of the assessee under the head "Salary". Besides, the assessee in his capacity as chairman of the aforesaid corporation had enjoyed the facility of residential accommodation for which the corporation paid monthly rent of Rs. 25,000 and, thus, a total sum of Rs. 3 lakhs was to be treated as perquisite of the assessee. The Assessing Officer after critically investigating and examining the matter came to conclude that he had the reason to believe that income chargeable to tax amounting to Rs. 1,41,27,702 had escaped assessment within the meaning of section 147 of the Act. It was noticed by the assessing officer that the assessee was also partner in various firms. The salary received by him from those firms and the interest accruing thereon would be chargeable to tax. On these premises, the assessing officer further observed that income on these counts and the income on account of purchases of assets acquired from income beyond the known sources of the assessee and chargeable to tax had escaped assessment under section 147 of the Act. Certain cash deposits were detected during investigation made by the Department. After visualizing the entire scenario which was supported by documents and otherwise, the assessing officer, vide its order dated 28-12-2007 (annexure A1) made an addition of Rs. 1,05,30,200 to the taxable income returned by the assessee. Proceedings for imposition of penalty under section 271(1)(c) were also initiated against the assessee separately.

(3.) The assessee preferred an appeal before the Commissioner of Income-'tax (Appeals) (in short "the CIT(A)"). The primary submission that was made on behalf of the assessee was that the Assessing Officer could not make additions in respect of the income which had not escaped assessment for which no notice had been given to the assessee under section 148 read with section 147 of the Act. To fortify this submission, reliance on behalf of the assessee was placed on the judgment of this court in Vipan Khanna v. CIT, 2002 255 ITR 220 and CIT v. Atlas Cycle Industries, 1989 180 ITR 319. The Commissioner of Income-tax (Appeals), after conversing with the assessing officer, held as under :