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2021 (9) TMI 190 - AT - Income TaxReopening of assessment u/s 147 - eligibility of reasons to believe - information that the assessee had made immovable properties transactions - HELD THAT:- From perusal of the reasons recorded, we noticed that whether the provisions of explanation 2(a) or 2(b) of section 147 are applicable or both the sections are applicable". AO had written "escaped assessment within the meaning of section 147". The explanation 2(a) contains the situation where no return of income was furnished by the assessee. In the present case the assessee furnished his return of income, which is evident from assessment order page No. 2, therefore, provisions of explanation 2(a) of Section 147 of the Act does not apply on the assessee. As observed that no addition was made by the AO on the ground of reasons recorded and AO believed that income is escaped assessment.Explanation 3 does not and cannot override the necessity of fulfilling the conditions set out in the substantive part of section 147. An Explanation to a statutory provision is intended to explain its contents and cannot be construed to override it or render the substance and core nugatory. Section 147 has this effect that the AO has to assess or reassess the income ("such income") which escaped assessment and which was the basis of the formation of belief and if he does so, he can also assess or reassess any other income which has escaped assessment and which, comes to his notice during the course of the proceedings - If after issuing a notice under section 148, he accepted the contention of the assessee and holds that the income which he has initially formed a reason to believe had escaped assessment, has as a matter of fact not escaped assessment, it is not open to him independently to assess some other income. If he intends to do so, a fresh notice under section 148 would be necessary, the legality of which would be tested in the event of a challenge by the assessee. Therefore, we found merit in the contention of the ld. AR and the case laws relied upon by the ld DR are not applicable in the case of the assessee, therefore, we quash the proceedings initiated u/s 147 of the Act. - Decided in favour of assessee.
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