Law: Income Tax Ordinance, 1979

Section: 65,62,132

(a) Income tax Ordinance (XXXI of 1979)]----Ss.65, 62 & 132 Re opening of assessment Profit on sale of shops by assessee was held to be not liable to tax on the basis of an agreement arrived at between a Committee headed by IA.C and the assessee No material was available on record for re opening of assessment Department, therefore, was not justified to re open the assessment in circumstances Where facts regarding making of profit on the sale of shops for the charge year under appeal were identical with the earlier years and for which years, a decision had already been recorded in favour of assessee, there was no justification to charge to tax profit arising from the sale of shops for the subsequent years. Profit on the sale of shops was held to be not liable to tax on the basis of an agreement arrived at between a committee headed by the IAC, and the assessee. There was, thus, no justification nor, for that matter, there was any material available on record so as to justify reopening of assessments already made in pursuance of an agreement, Despite this agreement, assessments already made were reopened; but, subsequently, profit on the sale of shops was deleted by learned CIT (Appeals), and rightly so, assessment proceedings must assume finality at some stage despite the principle of res judicata and estoppel which, in a strict sense, do not apply to proceedings before the Income tax Authorities. Therefore, in order to avoid uncertainty and free the minds of the assessees from the fear of the sword of Democles hanging over their heads, it does appear desirable to extend some degree of finality to the decision of the Income tax Authorities so as to prohibit them to change their decision once taken by them after due consideration of material evidence. In the present case profit earned by the assessee from the sale of shops was held to be not liable to tax, and, accordingly, a second appeal was not proposed by the department for the charge years 1977 78, 1978 79, 1979 80 and 1984 35, before the Tribunal. Therefore, on the same facts, profit for the charge year 1981 82, was not liable to tax. There was no fresh evidence available on record so as to deviate from…

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