The mandatory recording of reasons before issuing notice under Section 148 is essential for assuming jurisdiction in reassessment proceedings under Section 147.

Rajesh Balia, J.-This appeal is directed against the order of the Tribunal, Jodhpur Bench, Jodhpur, dt. 26th May, 2003 relating to asst. yr. 1988-89 deciding ITA No. 111 1/Jp/1994 and ITA No. 898/Jp/1995 filed by the respondent-assessee before the Tribunal. There were cross-appeals filed by the assessee to the extent they were aggrieved with the order passed by the CIT(A) in an appeal filed by the assessee against the order of reassessrnent for the asst. yr. 1988-89 dt. 30th Nov., 1993.

2. The appeal of the assessee was allowed and that of the Revenue was dismissed by the Tribunal on threefold grounds. Firstly, that prior to arnendrnent of Section 147 w.e.f 1st April, 1989, it was required under Section 148 that the AO gives to the assessee a notice for filing return of not less than 30 days whereas after the arnendrnent, it was required that the assessee should be given a notice to file return within 30 days. The Tribunal found distinction between the expression ‘within 30 days’ and ‘not less than 30 days’ and held that since the reassessrnent proceeding relating to asst. yr. 1988-89, which ended prior to the commencement of the arnended provisions w.e.f 1st April, 1989, the arnended provisions were not applicable in relation to the assessrnent already completed. Since notice to file return within ‘30 days’ was of lesser duration than not less than 30 days, it was invalid.

3. Thesecond ground which prevailed with the Tribunal was that the AO has not recorded his own satisfaction to the escapement of income from levy of tax for asst. yr. 1988-89 but has merely acted on the opinion of another officer making an order under Section 132(5) for the purpose of retaining assets and account books which were seized during the search operations conducted on the premises of the assessee. The search took place in November, 1988. It was found by the Tribunal that the AO, while exercising jurisdiction under Section 147 must act on his own satisfaction and not on derivative satisfaction of some other officer, therefore, the basic precondition for the AO to hold the reason to believe that income has escaped assessment for asst. yr. 1988-89 was lacking.

4. Lastly, it was found that before initiating proceedings under Section 147 for the impugned asst. yr. 1988-89, the reasons for initiating such proceedings were not recorded as required by Sub-section (2) of Section 148. The reasons are purported to have been recorded on 30th Sept., 1991 and notices have been issued on 14th Oct., 1991.

5. The learned Counsel for the Revenue has urged as was urged before the Tribunal that there may be some mistake in writing the dates, and therefore, no exception can be made out from some clerical error.

According to him, the order dt. 13th Sept., 1991 may have been made on 30th Oct., 1991.

6. We have perused the record of the AO containing the recording of reasons and are satisfied that the third point alone is sufficient to uphold the order of the Tribunal. The note-sheet recording reasons for asst. yr. 1988-89 reads as under:

30th Sept., 1991 “search and seizure was conducted under Section 132 of IT Act. A lot of incriminating documents with valuables found and seized during course of search. The order under Section 132(5) passed by AO in which AO has given his finding that assessee has made increment in out of undisclosed sources during assessment year under consideration. The AO also has been given that the business income also underassessed during assessment year made consideration. Therefore, I have reason to believe that income has escaped for taxation. This fact is on the part of assessee he fails to disclose true facts before AO. Notice under Section 148 is issued on 14th Oct., 1991 and served on 29th Oct., 1991.”

7. Apparently, the reasons purported to have been recorded on 30th Sept., 1991 and, notice is purported to have been issued on 14th Oct., 1991. However, if the reasons were recorded on 30th Sept., 1991, it could not have been record