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2014 (4) TMI 126 - HC - Income TaxValidity of exercise of power u/s 147 of the Act – Reopening of assessment – Reason to believe – Held that:- Section 147 of the Act speaks that, if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned. Relying upon Jorawar Singh Baid Vs. Assistant Commissioner of Income Tax (Cal.) and others [1992 (2) TMI 40 - CALCUTTA High Court] – The power that can be exercised under section 143(2) to cover the assessment made u/s 143(1) does not exclude the power of the AO to reopen the assessment u/s 147, subject to availability of ingredients of section 147 – it cannot be accepted that reassessment u/s 147 is vitiated, because the Assessing Officer failed to invoke his power to correct the assessment period completed u/s 143 (1) by issuing a notice u/s 143(2) of the Act. The purpose of section 147 is to ensure that a party cannot get up by making false or untrue statement at the time of original statement and when that falsity comes to notice the assessee cannot turned around and say that since "you accepted my lie, now your hands are tied and you can do nothing" - In order to proceed u/s 147, if the, AO has reason to believe that any income chargeable to tax has escaped assessment then he can proceed for reassessment - The only requirement of section 147 is that the AO must have good reason to believe that some income had escaped assessment. The letter dated 14.05.2013 written by the Deputy Commissioner of Income Tax Range-VI Lucknow shows that in the return filed by the petitioner for assessment year 2006-07 the petitioner declared its total income "Nil" - during the year share capital and secured loan increases - the assessee did not explain the source of increment, similarly other current assets also increased - apart from District Valuer Report, there were sufficient reasons for the AO to believe that the income chargeable to tax has escaped assessment – the ingredients of section 147 is available to reopen the proceeding of assessment for the assessment year 2006-07 – thus, there is no reason to interfere with the proceeding for assessment year 2006-07 initiated u/s 147(1) of the Act – Decided against Assessee.
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