Shri Nilesh Kalidas Shah, Ahmedabad V. The ACIT.,Circle-3, Ahmedabad

ITA 1056/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9584 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-11-2016
• Assessment Year: 1994-1995
• Appeal Filed On: 15-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRAVIN KUMAR
• Assessee Lawyers: GYAN PIPARA
• Keywords: Unexplained investment; Period of limitation; Question of law; Time period of passing order; Reason to believe; Reassessment proceedings
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 142(1); 143(2); 208; 48; 73; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ITA NO. 1056/AHD/2013 / ASSESSMENT YEAR : 1994-1995 NILESH KALIDAS SHAH, 43, KAMDHENU COMPLEX, NR. POLYTECHNIC, AMBAWADI, AHMEDABAD-380015 PAN : ACIPS 6595 C VS ACIT, CIRCLE-3, AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI GYAN PIPARA, AR REVENUE BY : SHRI PRAVIN KUMAR, SR DR / DATE OF HEARING : 15/11/2016 / DATE OF PRONOUNCEMENT: 10/01/2017 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-6, AHM EDABAD DATED 21.02.2013 FOR ASSESSMENT YEAR 1994-95. 2. THE CONCISE GROUNDS RAISED ARE TO THE EFFECT THA T THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN (I) UPHOLDING THE REASSESSING PROCEEDINGS U/S 147/148 O F THE INCOME- TAX ACT; (II) CONFIRMING THE ADDITION OF RS.4,82,006/- BEING THE UNEXPLAINED INVESTMENT IN SHARES; (III) CONFIRMING THE ADDITION OF RS. 9,33,091/- AS THE IN TEREST PAID IN CASH; (IV) CONFIRMING ADDITION OF RS.1,28,000/- FOR INVESTMENT IN HOUSE PROPERTY. (V) CONFIRMING ADDITION OF RS.2,50,000/- BEING UNEXPLAI NED ADVANCES TO S.S. NAGRI. SMC-ITA NO. 1056/AHD/2013 NILESH KALIDAS SHAH VS. ACIT AY : 1994-1995 2 (VI) CONFIRMING THE ADDITIONS OF RS.65,000/- AND RS.6,75 0/- TOWARDS UNEXPLAINED INVESTMENT IN SHARES. (VII) CONFIRMING THE ADDITION OF RS.4,044/- BEING THE UNE XPLAINED DONATION. (VIII) CONFIRMING THE ADDITION OF RS.2,50,000/- BEING THE UNEXPLAINED INVESTMENT IN THE SHARES OF RELIANCE INDUSTRIAL LTD . (IX) CONFIRMING THE ADDITION OF RS.50,000/- BEING THE UN EXPLAINED HOUSEHOLD EXPENDITURE. 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH WAS CA RRIED ON ASSESSEES PREMISES U/S 132 ON 03.12.1993 AND 04.12.1993. ON T HE DATE OF SEARCH, THE RETURN OF INCOME FOR A.Y. 1994-95 WAS NOT DUE AS TH E PREVIOUS YEAR HAD NOT ENDED. A NOTICE UNDER SECTION 142(1) DATED 19.12.19 94 WAS ISSUED FOR FILING THE RETURN OF INCOME, FOLLOWED BY A NOTICE UNDER SE CTION 148 DATED 27.07.1995; IN RESPONSE TO WHICH THE ASSESSEE FILED RETURN OF INCOME ON 05.12.1996 DECLARING TOTAL INCOME OF RS.5,65,660/-. 3.1 THE REASSESSMENT PROCEEDINGS WERE ALSO COMMENCE D BY THE ASSESSING OFFICER BY ISSUING VARIOUS NOTICES U/S. 1 42(1) AND 143(2) AND DURING THE COURSE THEREOF, THE ASSESSEE FILED THE R EQUIRED DETAILS FROM TIME TO TIME. AS PER THE LAW, THE ASSESSMENT ORDER SHOU LD HAVE BEEN PASSED ON OR BEFORE 31.03.1998 BEING THE LIMITATION ALLOWABLE . THE ASSESSING OFFICER INSTEAD ISSUED YET ANOTHER NOTICE U/S. 148 DATED 10 .03.1998, WHICH WAS SERVED ON 12.03.1998, FOR THE VERY SAME ASSESSMENT YEAR JUST A COUPLE OF DAYS PRIOR TO THE LIMITATION PERIOD FOR PASSING THE ASSESSMENT ORDER PURSUANT TO FIRST NOTICE U/S.148 OF THE ACT. 3.2 SINCE CONSEQUENT TO FIRST 148 NOTICE NO ASSESSM ENT ORDER WAS PASSED, THE APPELLANT OBJECTED TO THE VALIDITY OF SECOND NO TICE U/S.148 DATED SMC-ITA NO. 1056/AHD/2013 NILESH KALIDAS SHAH VS. ACIT AY : 1994-1995 3 10.03.1998 BEFORE THE ASSESSING OFFICER ON THE GROU ND THAT THE ASSESSMENT PROCEEDINGS PURSUANT TO THE FIRST VALID NOTICE U/S. 148 OF THE ACT DATED 27.07.1995 WERE ALREADY PENDING. CONSEQUENTLY, AS P ER LAW, THE ISSUANCE OF THE SECOND NOTICE U/S.148 OF THE ACT DATED 10.03.19 98 WAS BAD IN LAW AND WITHOUT JURISDICTION AND HENCE INVALID. 3.3 THE ASSESSING OFFICER REJECTED THE ASSESSEES O BJECTIONS ON UNTENABLE GROUND THAT THE RETURN FILED ON 05.12.1996 IS NON-E ST IN THE EYES OF LAW AND THEREFORE A NOTICE U/S. 148 WAS ISSUED BY HIM ON 10 .03.1998. THEREAFTER, THE ASSESSING OFFICER PROCEEDED TO PASS THE REASSESSMEN T ORDER U/S. 143(3) R.W.S. 147 DATED 27.03.2000 BASED ON SUCH INVALID S ECOND NOTICE U/S.148 OF THE ACT DATED 10.03.1998 DETERMINING THE TAXABLE IN COME AT RS.26,99,554/- AFTER MAKING VARIOUS ADDITIONS AND DISALLOWANCES. 4. AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL C HALLENGING THE VALIDITY OF THE ORDER PASSED PURSUANT TO SECOND NOTICE U/S.1 48 AND MERITS OF THE ADDITION. 5. THE LD. CIT(A) DISMISSED THE APPEAL VIDE ORDER D ATED 10.12.2000 ON THE BASIS OF FOLLOWING OBSERVATIONS: IN THIS CASE SEVERAL OPPORTUNITIES OF HEARING WERE GIVEN TO THE APPELLANT TIME AND AGAIN AND THIS TIME AROUND NEITHER THERE H AS BEEN ANY COMPLIANCE NOR AN LETTER FOR ADJOURNMENT HAS BEEN RECEIVED. IN THIS VIEW OF THE MATTER THE APPEAL IS DECIDED ON MERITS. 6. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE T HE ITAT, AHMEDABAD BENCH VIDE ITA NO.475/AHD/2001. DURING THE COURSE O F HEARING BEFORE THE ITAT, AN ADDITIONAL GROUND OF APPEAL WAS FILED AS U NDER: THE IMPUGNED ORDER OF ASSESSMENT IS BAD IN LAW AS THE SAME IS BARRED BY LIMITATION AND THEREFORE, REQUIRES TO BE CANCELLED. AS VIDE SUBMISSIONS DATED 26/02/2000, IF HAS BEEN SUBMITTED BEFORE THE ASSESS ING OFFICER THAT THE NOTICE SMC-ITA NO. 1056/AHD/2013 NILESH KALIDAS SHAH VS. ACIT AY : 1994-1995 4 U/S.148 DATED 10/03/1998 IS BAD IN LAW AS AT THE TI ME OF ISSUE OF THIS NOTICE U/S.148, THE EARLIER ASSESSMENT IN RESPONSE TO NOTI CE U/S.148 DATED 27/07/1995 WAS UNDERGOING AND THUS, THERE WAS TIME AVAILABLE TO THE ASSESSING OFFICER FOR COMPLETION OF THE ASSESSMENT BY 31/03/1998 AND THUS, THE ISSUE OF NOTICE U/S.148 DATED 10/03/1998 IS BAD IN LAW AS ON THIS DATE THE ORIGINAL ASSESSMENT HAS NOT COME TO AN END. THE PRE SENT ASSESSMENT BEING BASED ON NOTICE U/S.148 DATED 10/03/1998 IS BARRED BY LIMITATION AND THUS REQUIRES TO BE CANCELLED. 6.1 THE ITAT IN ITA NO.475/AHD/2001 VIDE ITS ORDER DATED 03.04.2006 HELD THAT THE ADDITIONAL GROUND IS PERTAINING TO LE GAL ISSUE AND HENCE IN THE INTEREST OF JUSTICE THE SAME IS ADMITTED AND ACCORD INGLY THE MATTER WAS SENT BACK TO THE FILE OF THE LD. CIT(A) TO DECIDE THE IS SUE IN ACCORDANCE WITH LAW AFTER VERIFYING THE VARIOUS DATES AND PROVIDING REA SONABLE OPPORTUNITY TO THE ASSESSEE. 7. THE LD. CIT(A), IN SET-ASIDE PROCEEDINGS PURSUAN T TO ITATS ORDER AND AFTER CONSIDERING THE SUBMISSION FILED BY THE ASSES SEE, CALLED FOR A REPORT FROM THE ASSESSING OFFICER. THE AO FURNISHED THE RE PORT DATED 22.08.2012, A COPY THEREOF WAS PROVIDED TO THE ASSESSEE. THE ASSE SSEE FILED A REJOINDER DATED 04.09.2012 DISPUTING THE FINDINGS OF THE AO. LD. CIT(A), HOWEVER, HELD THAT THE REASSESSMENT PROCEEDINGS HAD BEEN VAL IDLY INITIATED IN ACCORDANCE WITH LAW AND HE, THEREFORE, REJECTED THE LEGAL GROUND RAISED ON THE FOLLOWING OBSERVATIONS: 4.4 AS SEEN FROM THE REMAND REPORT, THERE IS NO DI SPUTE IN THE CHRONOLOGICAL EVENTS. IN BRIEF THE CHRONOLOGICAL E VENTS ARE AS FOLLOW. NOTICE U/S 142(1) DTD. 19/12/1994 WAS ISSUED CALLING FOR T HE RETURN OF INCOME. RETURN OF INCOME WAS FILED ON 05/12/1996 ADMITTING INCOME OF RS. 5,55,663/- . NOTICE U/S 148 DTD. 27/07/1995 WAS SERVED ON 01/ 08/1995. APPELLANT DID NOT FILE ANY RETURN OF INCOME OR LETTER IN RESPONSE . ACCORDINGLY THE LIMITATION FOR THE REOPENED PROCEEDINGS WAS TO EXPI RE ON 31/03/1998. BEFORE THE SAID DATE, NOTICE U/S 148 DTD. 10/03/1998 WAS S ERVED ON 12/03/1998, STATING THAT THE RETURN FILED ON 05/12/1996 IN RESP ONSE TO THE NOTICE U/S 142(1) WAS NON-EST IN LAW. ORDER U/S 143(3) R.W.S. 147 WAS PASSED ON 27.03.2000 WHICH WAS WELL WITHIN TIME TAKING INTO A CCOUNT THE SECOND NOTICE U/S 148 DTD. 10/03/1998. SMC-ITA NO. 1056/AHD/2013 NILESH KALIDAS SHAH VS. ACIT AY : 1994-1995 5 4.5 THUS THE ISSUE FOR CONSIDERATION AND ADJUDICATI ON IS WHETHER ISSUE OF SECOND NOTICE U/S 148 WITHOUT PASSING ASSESSMENT OR DER PURSUANT TO THE FIRST NOTICE U/S 148 IS IN ACCORDANCE WITH LAW OR NOT. I N THIS CONNECTION, THE FOLLOWING CASE LAWS ARE OF RELEVANCE. 4.6 IN THE INSTANT CASE THE SECOND NOTICE U/S 148 W AS ISSUED BEFORE THE LIMITATION FOR COMPLETION OF ASSESSMENT ON THE BASI S OF THE FIRST NOTICE U/S 148 EXPIRED. THEREFORE, IT CANNOT BE SAID THAT THE ISS UE OF SECOND NOTICE WAS EITHER TO CIRCUMVENT LAW OR DUE TO INADVERTENCE. APPELLAN T HAD NOT FILED ANY RETURN OF INCOME IN RESPONSE TO FIRST NOTICE U/S 148. AS HELD BY THE SUPREME COURT IN THE DECISION REFERRED TO ABOVE, IN THE ABSENCE O F ANY EXPRESS PROVISION ON THE STATUTE DEBARRING THE ISSUE OF SECOND NOTICE AN D IN THE ABSENCE OF ANY RETURN OF INCOME FILED BY THE APPELLANT PURSUANT TO THE FIRST NOTICE U/S 148, IT CANNOT BE SAID THAT THE ISSUE OF THE SECOND NOTICE U/S 148 WAS IN CONTRAVENTION OF THE INCOME-TAX ACT. ADMITTEDLY IM PUGNED ORDER U/S 143(3) R.W.S 147 PASSED WITHIN THE TIME LIMIT TAKING INTO RECKONING THE DATE OF THE SECOND NOTICE OF SEC. 148. THEREFORE I AM OF THE C ONSIDERED VIEW THAT THE ACTION OF THE A.O WAS IN ACCORDANCE WITH LAW. 4.7 DURING THE COURSE OF HEARING, LEARNED A.R. RELI ED ON THE CASE LAWS CITED AT 258 ITR 183 (BOM), 133 TAXMAN 71 (MUM), 80 ITD 591 (CHD.) 87 ITD 77 (AGRA) (SMC), 24 SOT (DELHI) (URO) AND 107 I TD 357 (CHENNAI). HAVING GIVEN MY CAREFUL CONSIDERATION TO THE RATIOS LAID DOWN IN THE SAID DECISIONS, I DO NOT FIND THAT ANY OF THESE CASE LAW S IS APPLICABLE TO THE FACTS OF THE INSTANT CASE. 4.8 ACCORDINGLY, THE ADDITIONAL GROUND OF APPEAL FI LED BY THE APPELLANT FOR THE FIRST TIME BEFORE THE TRIBUNAL AND RESTORED BY THE TRIBUNAL FOR ADJUDICATION TO THIS OFFICE IS DISMISSED. 8. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. TH E LD. COUNSEL FOR THE ASSESSEE AFTER REITERATED THE FACTS AND ARGUMENTS R AISED BEFORE THE LD. CIT(A), IT WAS STRESSED THAT THE FIRST NOTICE ISSUE D U/S. 148 ON 27.07.1995 WAS VALID IN LAW SINCE CONSEQUENCE PROCEEDINGS WERE PEN DING AND NEITHER REASSESSMENT PROCEEDINGS WERE DROPPED NOR REASSESSM ENT WAS FRAMED WITHIN THE TIME LIMIT RELATABLE TO THIS 148 NOTICE. THE SECOND NOTICE ISSUED U/S. 148 DATED 10.03.1998 WAS INVALID IN THE EYES O F LAW AND THE ASSESSMENT SMC-ITA NO. 1056/AHD/2013 NILESH KALIDAS SHAH VS. ACIT AY : 1994-1995 6 ORDER FRAMED ON THE EXTENDED TIME LIMIT BASED ON UN TENABLE SECOND NOTICE U/S. 148 DATED 10.03.1998 IS BAD IN LAW. 8.1 RELIANCE PLACED ON THE JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF G.P. AGARWAL VS. ACIT, REPORTE D IN 208 ITR 795, RELIED UPON BY THE CIT(A) IS IRRELEVANT AND NOT APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. IN THAT CASE, REMEDY FOR RECTIFICA TION WAS AVAILABLE AND HENCE THE WP WAS DISMISSED ON THE GROUND OF AVAILAB ILITY OF ALTERNATIVE REMEDY. LIKEWISE, THE RELIANCE ON JUDGMENT OF HONB LE SUPREME COURT IN THE CASE OF COMMUNIDADO OF CHIMALIM VS. ITO & ORS., REPORTED IN 247 ITR 271, BY THE CIT(A) IS ON THE CONTRARY, IN FAVOR OF THE APPELLANT. 8.2. THE PLEA OF THE LD. COUNSEL IS THAT THE PROCEE DINGS HAD BECOME BARRED BY LIMITATION VIS-A-VIS THE VALID FIRST NOTI CE ISSUED U/S. 148 DATED 27/07/1995 AND THE ISSUE OF SECOND NOTICE DATED 10/ 03/1998 WOULD NOT REVIVE THE TIME LIMIT. IN SUPPORT OF THE AFORESAID ARGUMENT, RELIANCE IS PLACED ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF ADITYA MEDISALES LTD VS DEPUTY COMMISSIONER OF INCO ME-TAX, CIRCLE 1(1) [2016] 73 TAXMANN.COM 197 (GUJARAT) APART FROM VARIOUS OTHER DECISIONS REFERRED TO. 9. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHE R HAND, STRONGLY SUPPORTED THE ORDERS PASSED BY THE LD. AO AND CIT(A ) CONTENDING THAT SINCE THE SECOND NOTICE U/S. 148 HAD BEEN ISSUED WI THIN THE LIMITATION PERIOD AND NO ASSESSMENT COULD BE MADE ON THE BASIS OF THE FIRST NOTICE IN VIEW OF THE INVALID /NON-EST RETURN, THE ASSESSMENT MADE AFTER THE ISSUE OF THE SECOND NOTICE WAS VALID IN THE EYES OF LAW. THE RE IS NO BAR IN THE ACT FOR ISSUING SECOND NOTICE OF REOPENING AND THAT THE ASS ESSMENT BASED ON SECOND NOTICE HAVING BEEN PASSED WITHIN THE PERIOD OF 6 YE ARS FROM THE END OF THE SMC-ITA NO. 1056/AHD/2013 NILESH KALIDAS SHAH VS. ACIT AY : 1994-1995 7 PREVIOUS YEAR, THE SAME WAS VALID UNDER THE ACT. HE ALSO STATED THAT THE ASSESSEE HAD BEEN NON-COOPERATIVE THROUGHOUT THE PR OCEEDINGS. 10. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE LOWER AUT HORITIES. AS A MATTER OF FACT THE ASSESSMENT PROCEEDINGS PURSUANT TO THE FIR ST NOTICE U/S.148 OF THE ACT DID NOT CULMINATE INTO A VALID ORDER PRIOR TO I SSUANCE OF THE SECOND NOTICE UNDER THE SAME SECTION I.E. U/S.148 OF THE A CT. THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF ADITYA MEDISALES LTD. VS. DCIT, CIRCLE 1(1) (2016) 73 TAXMANN.COM 197 (GUJ.) HAS DEALT WITH IDENTICAL QUESTION OF LAW. THE RELEVANT FINDINGS OF THE HONBLE HIGH COURT AFT ER DISCUSSING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN VARIOUS D ECISIONS ARE REPRODUCED HEREUNDER: 1. IT CAN THUS BE SEEN THAT MAJORITY OF THE HIGH CO URTS OF THE COUNTRY HAVE PROCEEDED ON THE BASIS THAT WHEN THE ASSESSMENT PRO CEEDINGS ARE PENDING PURSUANT TO THE RETURN FILED BY THE ASSESSEE, THERE WOULD BE NO AUTHORITY IN THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 148 OF THE ACT. EXPRESSED IN DIFFERENT THOUGHTS AND LANGUAGE, THE CENTRAL CON CEPT BEING THAT WHEN A RETURN IS FILED, ASSESSMENT IS EITHER BEING DONE OR COULD BE CARRIED OUT BY ISSUING NOTICE UNDER SECTION 143 OF THE ACT FOR WHI CH TIME LIMIT HAS NOT EXPIRED, IN SUCH A CASE, THERE WOULD BE NO QUESTION OF INCOME CHARGEABLE TO TAX HAVING ESCAPED ASSESSMENT. ONLY UPON COMPLETION OF THE ASSESSMENT, OR IF NOT TAKEN IN SCRUTINY, UPON COMPLETION OF THE PERIO D DURING WHICH IT CAN BE SCRUTINISED, THE QUESTION OF INCOME HAVING ESCAPED THE ASSESSMENT WOULD ARISE. SINCE THE INVOCATION OF POWER UNDER SECTION 147 OF THE ACT DEPENDS ON THE ASSESSING OFFICER'S REASON TO BELIEVE THAT INCO ME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT, NO SUCH BELIEF COULD BE FORMED TILL THE RETURN IS PENDING ASSESSMENT. 6. IN OUR CASE, THE SITUATION IS DURING THE PENDENC Y OF FIRST NOTICE OF REASSESSMENT, THE ASSESSING OFFICER RECORDED SEPARA TE REASONS AND ISSUED A FRESH NOTICE FOR REASSESSMENT. THOUGH THIS IS NOT A CASE WHERE THE ORIGINAL ASSESSMENT ITSELF WAS PENDING WHEN THE NOTICE FOR R EOPENING WAS ISSUED AND IN THIS CONTEXT, AS NOTED, SOME OF THE HIGH COURTS HAVE DRAWN A DISTINCTION, IN OUR OPINION, THERE WOULD BE NO MATERIAL CHANGE. AS LONG AS ASSESSMENT SMC-ITA NO. 1056/AHD/2013 NILESH KALIDAS SHAH VS. ACIT AY : 1994-1995 8 WAS AT LARGE BY VIRTUE OF THE FIRST NOTICE OF REOPE NING, THE QUESTION OF ISSUING SECOND NOTICE FOR THE SAME PURPOSE DID NOT ARISE. 7. THERE CANNOT BE TWO PARALLEL ASSESSMENTS BASED O N TWO NOTICES. AS LONG AS FIRST ASSESSMENT IS NOT COMPLETED, QUESTION OF REASSESSMENT WOULD NOT ARISE. ONCE A NOTICE IS ISSUED UNDER SECTION 148 OF THE ACT, IT TRIGGERS INITIATION OF PROCEEDINGS FOR ASSESSMENT OR REASSES SMENT OF INCOME WHICH MAY HAVE ESCAPED ASSESSMENT EARLIER. DURING SUCH ASSESS MENT, ANY INCOME WHICH MAY COME TO THE NOTICE OF ASSESSING OFFICER MAY ALS O BE BROUGHT TO TAX. TILL THIS ASSESSMENT IS NOT COMPLETED, IT WOULD NOT BE P OSSIBLE FOR HIM TO FORM A BELIEF THAT INCOME CHARGEABLE TO TAX HAD ESCAPED AS SESSMENT. UNTIL THE ASSESSMENT, BE IT ORIGINAL OR REOPENED, IS PENDING BEFORE THE ASSESSING OFFICER, THE QUESTION OF ISSUING NOTICE FOR REOPENI NG WOULD NOT ARISE. AS NOTED, IN CASE OF RANCHHODDAS KARSONDAS (SUPRA), TH E SUPREME COURT HAD TAKEN A VIEW THAT TILL THE ASSESSMENT PROCEEDINGS A RE PENDING, IT CANNOT BE STATED THAT THERE WAS ESCAPEMENT OF INCOME. TO OUR MIND, THERE IS NO DISTINCTION WHETHER THE PENDING ASSESSMENT IS PURSU ANT TO THE RETURN FILED BY THE ASSESSEE ORIGINALLY OR IN RESPONSE TO THE NOTIC E OF REASSESSMENT ISSUED BY THE ASSESSING OFFICER. IN EITHER CASE WITHIN THE CO NTOURS OF THE PROVISIONS FOR ASSESSMENT, THE ASSESSMENT OF THE INCOME OF THE ASS ESSEE AT THE HANDS OF THE REVENUE IS AT LARGE. 11. IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES, IT IS QUITE CLEAR THAT THE POSITION OF LAW IS SETTLED PROPOSITION THAT WHEN TH E REASSESSMENT PROCEEDINGS ARE PENDING BASED ON A VALID 148 NOTICE , THE SUBSEQUENT PROCEEDINGS UNDER SECTION 148 CANNOT BE INITIATED U NLESS EARLIER PROCEEDINGS ARE BROUGHT TO A LOGICAL END. IN THE PRESENT APPEAL , IT IS AN UNDISPUTED FACT THAT THE FIRST NOTICE DATED 27.07.1995 ISSUED UNDER THE SAME SECTION REMAINS UN-DISPOSED OF. IT IS ALSO AN UNDISPUTED FACT THAT THE SECOND NOTICE UNDER SECTION 148 WAS ISSUED ON THE GROUND THAT INCOME HA D ESCAPED ASSESSMENT BECAUSE OF THE INVALID/NON-EST RETURN FILED BY THE ASSESSEE. THE ASSESSING OFFICER IN THE REMAND REPORT HAS CONFIRMED ALL THE DATES AS MENTIONED IN PARA NO.13 ON PAGE 19 TO 22 OF THE ORDER OF CIT(A) AND ALSO CONFIRMED THAT NO ASSESSMENT WAS MADE PURSUANCE TO FIRST NOTICE U/ S.148 DATED 27.07.1995. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, I AM INCL INED TO QUASH THE SECOND NOTICE UNDER SECTION 148 DATED 10/03/1998 AS INVALI D. THE ASSESSMENT ORDER SMC-ITA NO. 1056/AHD/2013 NILESH KALIDAS SHAH VS. ACIT AY : 1994-1995 9 DATED 27.03.2000 PASSED IN PURSUANCE SUCH NOTICE IS THUS ANNULLED. IN VIEW OF THE FACT THAT I HAVE ANNULLED THE ASSESSMENT ORD ER ITSELF AND HAVE TREATED IT AS ANNULLED, I DO NOT FIND IT NECESSARY TO ADJUD ICATE UPON ANY OF THE OTHER GROUNDS ON MERITS AS RAISED BY THE ASSESSEE. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 10 TH JANUARY, 2017 AT AHMEDABAD. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 10/01/2017 *BIJU T., SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD