Desh Raj Udyog v. ITO - Taxpublishers.in

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The Tax Publishers2009 TaxPub(DT) 2011 (All-HC) : (2010) 031 (I) ITCL 0302 : (2009) 318 ITR 0006 : (2009) 227 CTR 0636 : (2010) 188 TAXMAN 0073 : (2009) 032 DTR 0182 Desh Raj Udyog & Chaman Udyog v. ITO INCOME TAX ACT, 1961 Reassessment- Notice under section 148 -Validity Assessee, partnership firm, was engaged in business of manufacture and sale of RCC pipes. It filed its return declaring total income as business income for assessment year 2000-01 and was accepted under section 143(1). AO issued notice under section 148 and assessment order passed under section 143(3)/148, wherein he made certain addition under head income from house property. Thereupon, assessee filed returns of income for assessment years 2001-02 and 2002-03 declaring total income under head income from business and ITO accepted it under section 143(1). Subsequently, notices were issued under section 148 for assessment years 2001 to 2003. Meanwhile CIT (A) recalled his order for assessment year 2000-01 for rectification and passed a fresh order holding that income of assessee was assessable only under head income from business. Assessee filed instant petition challenging reopening of assessment on ground that issue pertaining to income from property had decided by order relating to assessment year 2000-01 whereby CIT (A) passed fresh order regarding income assessed for assessment year 2000-01 only under head income from business and not under head property income. Held: - It was found that objections rose by assessee against issuance of notice under section 148 for assessment years 2001 to 2003, at that time case for assessment year 2000-01 was sub-judice. Since, assessment order for assessment year 2000-01 was passed under section 143(3), read with section 147, whereas for assessment years in question returns were accepted under section 143(1), therefore, assessee could not get any advantage of fact that in assessment year 2000-01 its income had been treated as income from business and not under head income from property. Income-tax Act, 1961, Section 147 A.Y.:2001-02 and 2002-03 Decision: In favour of revenue. Case Law Analysis:Radhasoami Satsang v. CIT [1992] 193 ITR 321 / 60 Taxman 248 (SC) [Para 26], J.P. Bajpai, HUF v. CIT [2004] 269 ITR 40/ 140 Taxman 34 (All.) [Para 27], CIT v. Pateshwari Electrical & Associated Industries (P.) Ltd. [2006] 282 ITR 61 /[2005] 148 Taxman 240 (All.) [Para 30], Universal Plast Ltd. v. CIT [1999] 237 ITR 454 / 103 Taxman 493 (SC) [Para 31] and CIT v. Kelvinator of India [2002] 256 ITR 1 / 123 Taxman 433 (Delhi) [Para 32] SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2009 TaxPub(DT) 2011 (All-HC) : (2010) 031 (I) ITCL 0302 : (2009) 318 ITR 0006 : (2009) 227 CTR 0636 : (2010) 188 TAXMAN 0073 : (2009) 032 DTR 0182

Desh Raj Udyog & Chaman Udyog v. ITO

INCOME TAX ACT, 1961

Reassessment- Notice under section 148 -Validity

Assessee, partnership firm, was engaged in business of manufacture and sale of RCC pipes. It filed its return declaring total income as business income for assessment year 2000-01 and was accepted under section 143(1). AO issued notice under section 148 and assessment order passed under section 143(3)/148, wherein he made certain addition under head income from house property. Thereupon, assessee filed returns of income for assessment years 2001-02 and 2002-03 declaring total income under head income from business and ITO accepted it under section 143(1). Subsequently, notices were issued under section 148 for assessment years 2001 to 2003. Meanwhile CIT (A) recalled his order for assessment year 2000-01 for rectification and passed a fresh order holding that income of assessee was assessable only under head income from business. Assessee filed instant petition challenging reopening of assessment on ground that issue pertaining to income from property had decided by order relating to assessment year 2000-01 whereby CIT (A) passed fresh order regarding income assessed for assessment year 2000-01 only under head income from business and not under head property income. Held: - It was found that objections rose by assessee against issuance of notice under section 148 for assessment years 2001 to 2003, at that time case for assessment year 2000-01 was sub-judice. Since, assessment order for assessment year 2000-01 was passed under section 143(3), read with section 147, whereas for assessment years in question returns were accepted under section 143(1), therefore, assessee could not get any advantage of fact that in assessment year 2000-01 its income had been treated as income from business and not under head income from property.

Income-tax Act, 1961, Section 147

A.Y.:2001-02 and 2002-03
Decision: In favour of revenue.

Case Law Analysis:Radhasoami Satsang v. CIT [1992] 193 ITR 321 / 60 Taxman 248 (SC) [Para 26], J.P. Bajpai, HUF v. CIT [2004] 269 ITR 40/ 140 Taxman 34 (All.) [Para 27], CIT v. Pateshwari Electrical & Associated Industries (P.) Ltd. [2006] 282 ITR 61 /[2005] 148 Taxman 240 (All.) [Para 30], Universal Plast Ltd. v. CIT [1999] 237 ITR 454 / 103 Taxman 493 (SC) [Para 31] and CIT v. Kelvinator of India [2002] 256 ITR 1 / 123 Taxman 433 (Delhi) [Para 32]