1. The assessee has filed this appeal under Section 260A of the Income-tax Act, 1961 (for short the "Act"), against the order of the Income-tax Appellate Tribunal, Chandigarh Bench "B" (for short the "Tribunal"), dated December 5, 2000.
2. Briefly stated the facts are that the assessment in this case for the assessment year 1984-85 was completed under Section 143(3) of the Act on January 24, 1985, on the returned income of Rs. 14,920. Thereafter some information was received from the Central Bureau of Investigation, on the basis of which the Assessing Officer issued a notice dated March 18, 1991, under Section 148 of the Act after obtaining necessary sanction of the Deputy Commissioner of Income-tax. In response to this notice, return was filed declaring an income of Rs. 14,917 on May 21, 1991. The Assessing Officer made reassessment under Section 147 of the Act at a total income of Rs. 11,37,060 vide order dated March 29, 1993. This order along with the demand notice was served by affixture as the service could not be made in the ordinary course. Aggrieved by the order of reassessment, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals), Shimla, on April 15, 1993. In this appeal, the assessee challenged the validity of the initiation of proceedings under Section 147 as also the reassessment made thereunder. She further challenged various additions made by the Assessing Officer as also the levy of penal interest under Sections 139 and 215/217 of the Act. The Commissioner of Income-tax (Appeals) vide order dated September 23, 1994, upheld the validity of the proceedings under Section 147 and the reassessment made thereunder. The levy of penal interest was also upheld. In respect of various additions, some were upheld while the others were remanded back for fresh adjudication by the Assessing Officer.
3. The assessee preferred a further appeal before the Tribunal. The Tribunal vide order dated December 5, 2000, upheld all the findings of the Commissioner of the Income-tax (Appeals) except on the issue of levy of penal interest under Sections 139(8), 215 and 217 of the Act. The levy of penal interest was quashed by the Tribunal.
4. The assessee has filed the present appeal claiming that the following substantial questions of law arise out of the order of the Tribunal :
"(a) Whether, in the facts and circumstances of the case, the orders annexures P1, P2 and P3 are legally sustainable ?
(b) Whether, in the facts and circumstances of the case, the orders annexures P1, P2 and P3 are legally unsustainable inasmuch as the assessment order having been passed under Section 143(3) of the Act subsequent on the issuance of notice under Section 148 of the Act being non est and void ab initio ?
(c) Whether, in the facts and circumstances of the case, the orders annexures P1, P2 and P3 are legally unsustainable inasmuch as the assessment having been framed subsequent to the period of limitation and thus being beyond limitation ?
(d) Whether, in the facts and circumstances of the case, the sustaining of addition of Rs. 38,000 is legally sustainable, the same being based on mere surmises and conjectures which cannot form the basis for adjudication ?
(e) Whether, in the facts and circumstances of the case, the addition of Rs. 15,000 is legally unsustainable, inasmuch as the same being based on mere surmises and conjectures which cannot form the basis for adjudication ?
(f) Whether, in the facts and circumstances of the case, the addition of Rs. 28,000 is legally unsustainable inasmuch as the same being based on mere surmises and conjectures which cannot form the basis for adjudication ?
(g) Whether, in the facts and circumstances of the case, the orders sustaining the restoring of the case to the file of the assessing authority on certain additions is legally sustainable in view of the fact that the said additions in the first instance only had been made on mere presumptions and conjectures which cannot form the basis for adjudication in law ?"
5. We have heard Mr. A. K. Mittal, the advocate, appearing on behalf of the assessee.
6. Learned counsel challenges the validity of the initiation of the proceedings under Section 147. Mr. Mltt'al states that the basis of the initiation of these proceedings was some inquiry report by the Central Bureau of Investigation. He claims that there was no such report and since the very foundation of the proceedings under Section 147 was non-existent, the proceedings were liable to be quashed. There is no merit in this contention. It is nobody's case that there was an inquiry report against the assessee. The Commissioner of Income-tax (Appeals) and the Tribunal have noticed that the Assessing Officer had received a detailed and comprehensive information from the Central Bureau of Investigation indicating the income and assets belonging to the assessee which had not been shown in her return. The contents of this information have duly been incorporated in the orders of the lower authorities. It has also been found that the assessee had not disclosed the assets mentioned therein in the original return filed by her. The correctness of the information in the communication from the Central Bureau of Investigation is not even in dispute at least in respect of some of the investments as the assessee has tried to explain the same by relating them to some alleged loans/gifts. It is, therefore, evident that the Assessing Officer had received definite information from the Central Bureau of Investigation about the investments made by the assessee and that the assessee had failed to disclose those investments in the original return.
7. Learned counsel then contended that the proceedings under Section 147 were vitiated as the assessee was never confronted with the communication from the Central Bureau of Investigation. However, he was not able to refer to any provision of law under which there was such an obligation cast on an Assessing, Officer. It is not disputed that the assessee was duly confronted with the information contained in the said communication about the investments made by her in various assets. This was all that the Assessing Officer was required to do, to afford the assessee a fair opportunity to explain her case. There is, thus, no merit in this contention also.
8. Mr. Mittal further argued that the present case relates to the assessment year 1984-85 and, therefore, the Tribunal was not justified in examining the validity of the proceedings under the amended provisions of section 147 which had been substituted with effect from April 1, 1989. According to him, the matter had to be examined on the basis of Section 147 as it existed prior to April 1, 1989. There is indeed some debate on this issue and some High Courts have taken the view as canvassed by learned counsel. One such view has been expressed by the Patna High Court in Ranchi Handloom Emporium v. CIT [1999] 235 ITR 604. However, it is not necessary for us to opine on this question as we are satisfied that even under the unamended provisions of section 147, the initiation of proceedings is valid. Prior to its amendment on April 1, 1989, the section stood as under :
"If-
(a) the Assessing Officer has reason to believe that, by reason of the omission or failure on the part of an assessee to make a return under Section 139 for any assessment year to the Assessing Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or
(b) notwithstanding that there has been no omission or failure as mentioned in Clause (a) on the part of the assessee, the Assessing Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned (hereafter in Sections 148 to 153 referred to as the relevant assessment year) . . ."
9. From a perusal of the above, it is evident that to confer jurisdiction under Section 147(a) of the Act, two conditions are required to be satisfied ; firstly, the Assessing Officer must have reason to believe that income, profits or gains chargeable to tax has escaped assessment and, secondly, he must have reason to believe that such escapement has occurred either because of omission or failure on the part of the assessee to disclose fully or truly all material facts necessary for his assessment of that year. In the present case, both the requirements stand fulfilled. It is an undisputed fact that the assessee had not disclosed various investments in the return originally filed by her and on this basis the Assessing Officer could reasonably entertain a prima facie belief about the escapement of income. Thus even under the unamended provisions of section 147, the proceedings initiated in the present case have to be upheld as valid.
10. Learned counsel next contends that the impugned order of reassessment dated March 29, 1993, is invalid as the assessment has been framed under Section 143(3) of the Act. According to him, once a notice under Section 148 of the Act is issued, the assessment has to be completed under Section 147 and not under Section 143(3). This contention is totally devoid of any merit. It has been rightly pointed out by the Tribunal that once a return in pursuance to notice under Section 148 is filed, the "provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139." The position was the same even prior to the amendment of Section 148 with effect from April 1, 1989. The unamended provision also provided that on issue of a notice under Section 148 "the provisions of this Act shall, so far as may be, apply accordingly as if a notice were a notice issued under Sub-section (2) of Section 139". Thus, it is evident that the return filed in response to a notice under Section 148 has to be treated as if it has been filed under Section 139. That being so, the procedural provisions for making an assessment under Section 143(3) of the Act also come into play. A perusal of Section 143 shows that the procedure prescribed therein applies to a return which "has been made under Section 139 ..." In view of the clear provisions of law as discussed above, the findings of the Tribunal on this issue are in accordance with law and warrant no interference. Even if it were to be held that the assessment ought to have been framed under Section 147 and not Section 143(3), the assessee cannot derive any benefit merely on account of misdescription of a section. It is not the case of the assessee that the procedure of framing the assessment under Section 147 had not been followed.
11. Learned counsel has also attacked the impugned orders on the ground of limitation. He contends that the impugned order dated March 29, 1993, had been passed after the expiry of the period of limitation prescribed under the Act. The assessment could have been framed up to March 31, 1993. According to him, no order of assessment had been properly served on the assessee up to that date and, therefore, it has to be assumed that no assessment had been framed within the period of limitation. This argument is totally frivolous and is being noticed only to be rejected. The Tribunal has clearly found that the assessment had been completed on March 29, 1993. The order along with the demand notice had been sent for service on the same day, but it was reported by the notice server that the assessee had refused to receive the same. The Assessing Officer, therefore, ordered the service through affixture for which purpose he deputed his inspector. The inspector served the notice through affixture on March 30, 1993, and submitted his report to the Assessing Officer. Thus, it is evident that the assessment had duly been framed on March 29, 1993, within the period of limitation. It appears that in the present case the assessee has been trying to evade service of notice so as to take the plea of limitation at a subsequent stage. The inspector, who served the order and demand notice by affixture, had also reported that the service of any notice on the assessee was very difficult because of her non-co-operative and hostile attitude. She sometimes even let her dogs loose on the persons who had gone to serve notices on her.
12. The questions raised in paras. (d) to (f) pertain to various additions on account of unexplained investments by the Assessing Officer which have been upheld by the Commissioner of Income-tax (Appeals) as also the Tribunal. The Tribunal has discussed these additions in detail and has recorded a finding that despite repeated opportunities, the assessee had failed to lead any satisfactory evidence to explain the source of investment. This finding is purely a finding of fact involving no question of law much less a substantial question of law.
13. In question (g), the order of the Commissioner of Income-tax (Appeals) whereby the issue about the investment in some of the assets had been restored to the Assessing Officer for fresh adjudication, has been challenged.
The Commissioner of Income-tax (Appeals) had remanded the matter because the assessee had complained that no adequate opportunity of being heard had been afforded to her. Thus no fault can be found in the action of the appellate authority in remanding the matter. Even otherwise the appellate authority has the jurisdiction to remand any matter if it is satisfied that it requires further investigation or that further opportunity is required to be afforded to the assessee. The Tribunal has also noticed the fact that the Assessing Officer has already passed the consequential order on October 30, 1996, and the same is the subject-matter of appeal before the Commissioner of Income-tax (Appeals). We, therefore, find that there was nothing wrong in the action of the Commissioner of Income-tax (Appeals) in remanding the issue about some additions for fresh adjudication by the Assessing Officer.
14. No other point has been raised.
15. In view of the aforesaid discussion, we are of the considered view that no substantial question of law arises out of the order of the Tribunal. Accordingly, the appeal is dismissed in limine.