Law:

Section:

Section 147 of the Income-tax Act, 1961 - Corresponding to section 34 (1) of Indian Income-tax Act, 1922 - Income escaping assessment - Position prior to 1-4-1989 - Assessment year 1952-53 - In original assessment, assessee disclosed before Income-tax officer all primary facts necessary for assessment - Subsequently, on basic of information by tax informer that certain transactions were bogus, ITO sought approval of CBDT to reopen assessment - Reasons recorded by ITO, however, did not contain any ground for formation of belief that income of assessee-company exceeding Rs. 50,000 had escaped assessment - CBDT still gave its sanction mechanically and without application of mind - Whether, in aforesaid circumstances, reassessment proceedings were not validly initiated - Held, yes Section 149, read with section 297(2)(d)(ii), of the Income-tax Act, 1961 - Income escaping assessment - Time limit for issuance of notice - Assessment year 1952-53 - Whether time limit for issue of a notice as provided by section 149 of new Act, cannot be modified so as to read in section 149(1)(a)(ii), that same would be only eight years and not sixteen years or income which has escaped assessment would amount to or would be likely to amount to Rs. 1,00,000 or more instead of Rs. 50,000 or more - Held, yes - Whether at initial stage when merely a notice is issued by Income-tax officer for reopening of an assessment, it can not be said whether reopening is time-barred or not on ground that amount of escapement was not such which entitled Income-tax officer to issue such a notice, unless of course, notice itself specifies amount of escapement which on face of it bars jurisdiction and authority of Income-tax officer to initiate proceeding or to issue notice for reopening assessment - Held, yes FACTS The assessee-company appellant was inter alia dealing in jute. The assessment of the assessee, for the assessment year 1952-53, was completed in 1957, under the 1922 Act. The appellant had filed its balance-sheet and profit and loss account for the said year along with the return. In the course of the said assessment, pursuant to directions of the assessing Income-tax officer, the appellant…

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