Faizu Khan Sher Mohammed and Party vs Income Tax Appellate Tribunal and Others

Since common issues are involved in both these appeals, therefore, both the appeals are heard together and are being decided by this common order.

In these appeals, following questions are proposed to be admitted, being questions of law :

(A) Whether the notice u/s 148 of IT Act issued on 6th Nov., 2000, by registered post as mentioned in the assessment order, i.e., after 4 years from the close of assessment year which is time-barred and thus entire assessment proceedings and impugned orders are liable to be quashed and set aside ?

(B) Whether it is not a case of de novo assessment and same is recomputation of income under the different head ?

(C) Whether Tribunal vide its order dt. 21st Jan., 1997, has merely issued direction without setting aside the assessment ?

(D) Whether the impugned orders are perverse and same deserve to be quashed and set aside ?

(E) Whether the notice u/s 148 of the IT Act was against the ratio of the judgment in case of CIT v. A.R. Enterprises (P) Ltd. (2002) 27 Tax World 291 (Raj) ?

(F) Whether the notice u/s 148 was issued for the same reason on which the case of the appellant was set aside by the Hon''ble Tribunal vide order dt. 21st Jan., 1997, in ITA Nos. 889 and 890/Jp/1993 and as such the notice issued u/s 148 is not a valid notice ?

(G) Whether the case covered u/s 153(2A) was treated as simple direction u/s 153(3) of the IT Act when the assessment as per order of the CIT(A) in case of country liquor, assessed as per deeming provisions of Section 44AC was cancelled by the Tribunal vide order dt. 21st Jan., 1997, and, therefore, the assessment framed u/s 253/143(3), dt. 25th Feb., 2002, after more than 4 years is barred by limitation ?

(H) Whether the assessment by taxing the profit of country liquor business is to be assessed by adopting the profit of country liquor as per the deeming provisions of Section 44AC of the IT Act ?

(I) Whether the orders passed by the Tribunal, dt. 21st Sept., 2004, order dt. 3rd June, 2003, passed by CIT(A) for the asst. yrs. 1990-91 and 1991-92 and assessment orders are perverse and contrary to the provisions of law and deserve to be quashed and set aside ?

(J) Whether the impugned orders which have been passed without considering the submissions made by the appellant are liable to be quashed and set aside ?

(K) Whether the notice issued by the assessing authority u/s 148 of the IT Act at unknown address of the service of which is not proved and which has been issued in avoidance (sic) of the first appellate authority for the reason for which the Tribunal has already passed order dt. 21st Jan., 1997, is not valid notice ?

The basic issue involved in these questions is whether the assessment has been made in pursuance of the notice u/s 148 in the present proceedings.

CIT(A) has considered this aspect in para 4 of his order, which has been affirmed by the learned Tribunal in its order. For ready reference that reads as under :

I have carefully considered the rival submissions. As regards the first ground of issue of notice u/s 148 is concerned, the present proceedings have got no relation with the issue of such notice. The present proceedings are as a result of order passed u/s 143(3) Read with Secction. 253 of the IT Act, 1961, in furtherance to comply with the direction given by the Tribunal in the abovementioned appeal orders. Since the present assessments have not been made in consequence to the notice u/s 148 read with Section 147 of the IT Act, 1961, hence the grounds of appeal and the argument of the learned Authorised Representative on this issue cannot be sustained. As far as the jurisdiction of the present AO over the case of the appellant is concerned, this is covered by the provisions of Section 124(3) of the IT Act. The appellant has not raised any objection before the learned AO against the proceedings before him and against the issue of notice under Sections. 142 and 143(2). Therefore, such notices cannot be challenged after the lapse of one month from the date of service of the notice. As regards the address of the appellant is concerned, none was available at the old address and since the address of the appellant was C/o Mehta & Co., who had also changed the office at the new address at Ghittiranjan Marg, C-Scheme, Jaipur, without any intimation to the AO, therefore, I do not find any infirmity in the assumption of jurisdiction by the learned AO. Thus, the above ground of appeal too fails.

The second issue involved is whether the Tribunal has set aside the assessment and gave a direction for fresh assessment.

CIT(A) has considered this aspect in para 6 of its order, which has been affirmed by the learned Tribunal in its order. For ready reference that reads as under :

From the plain reading of the direction of the Hon''ble Tribunal, it is evident that nowhere the assessment has been set aside to be completed de novo. The assessment order dt. 29th Oct., 1992, is clear on the issue where, the income from country liquor business was taken as per books at Rs. 45,17,605 and Rs. 25,00,781 for asst. yrs. 1990-91 and 1991-92, respectively. In fact, the entire income from country liquor and IMFL/beer business has been taken as declared by the appellant. The learned CIT(A) ''directed the computation of income from country liquor business in accordance with provisions of Section 44AC. The Hon''ble Tribunal has directed the computation of income from country liquor business as per Sections. 28 to 43C. Therefore, as far as the computation of income from country liquor business is concerned, the order of the learned AO was restored by Hon''ble Tribunal. As regards the income from IMFL/beer business is concerned, the issue does not have any comment/agitated before the Tribunal. Therefore, from the order of the Tribunal it cannot be said that the assessment was set aside and the limitation prescribed in Section 153(2A) was applicable. This was the case of recomputation of income as per the specific directions of the Hon''ble Tribunal for which provisions of Section 153(3) are clearly applicable. The provisions of Section 153(3) are reproduced below for ready reference :

The provisions of Sub-sections. (1) and (2) shall not apply to the following classes of assessments, reassessments and recomputations which may subject to the provisions of Sub-section (2A), be completed at any time.

From the plain reading of the sub-section, the recomputation of income does not have any time-limit prescribed in the Act and, therefore, the ground of appeal taken by the appellant does not survive.

When there is a finding that the assessment order was not set aside and in the present proceedings, the assessment has been made in pursuance of the direction of the Tribunal in the first round to compute the income as per provisions of Sections. 28 to 43C of the IT Act, it cannot be said that the assessment was beyond limitation. In fact, only a direction was given to recompute the income as per the provisions of Sections. 28 to 43C.

In view of these findings and facts on record, we see no substance in these questions for admission as a question of law.

Consequently, both the appeals stand dismissed at admission stage.

Since the appeals stand dismissed, the stay applications connected therewith also stand rejected.