TMI Blog2013 (2) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... has ‘reason to believe’ that income had escaped assessment, it confers jurisdiction to reopen the assessment. So long as ingredients are fulfilled, the officer is free to initiate proceedings under section 147 of the Act. In the case of Asst.CIT Vs. Rajesh Jhaveri Stock Brokers P.Ltd [2007 (5) TMI 197 - SUPREME COURT] it was pointed out that expression “reason to believe” in section 147 would mean cause or justification. If the AO has cause or justification to know or suppose that income had escaped assessment, it could be said to have reason to believe that income had escaped assessment - Further case of an intimation under section 143(1)(a) is also covered by the main provision of section 147 as substituted with effect from 1.4.1989 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e present to represent the case of the assessee, hence, these appeals were heard ex-parte. We may mention that even before the Hon ble High Court the case of the assessee remained unrepresented. 3. These appeals are directed against the common order of the learned Commissioner of Income Tax(Appeals) for both the years. The original assessment was completed on 24.05.1996 under section 143(1)(a) for the assessment year 1995-96 and in the case of assessment year 1997-98 it was completed on 13.03.1998 under section 143(1)(a). The assessee carries on business in the purchase and sale of iron and steel items, etc. It had filed return of income on 30.10.1995 for assessment year 1995-96. Intimation was passed under section 143(1)(a) on 24.05.1996 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erely on the basis of a change of opinion. The assessee also questioned the mode of calculation of deduction under section 80HHC and reducing the claim by Rs.1,31,912/-. The other objection was regarding addition of Rs.75,977/- made under the head estimated profits under local turnover . The learned Commissioner of Income Tax(Appeals) has upheld the reopening of assessment and so also the addition of Rs.1,31,912 but has deleted the addition of Rs.75,977/-. 4. The only issue for our consideration therefore is the mode of calculation of deduction under section 80-HHC and the validity of reopening of assessment. At the time of hearing, we had no benefit of any assistance from the assessee s side and hence we have heard only the learned D.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eve that income had escaped assessment, it confers jurisdiction to reopen the assessment. So long as ingredients are fulfilled, the officer is free to initiate proceedings under section 147 of the Act. 7. Considering the fact that the grant of relief u/s.80HHC of the Act in deducting the indirect cost was contrary to the provisions therein, under Explanation (b) to sub-section (3), the Assessing Authority took steps to reopen the assessment u/s.147 of the Act. In the light of the above, we do not think that the Tribunal would be justified in expressing its opinion that the assessment could have been rectified u/s.154 of the Act instead of reopening the assessment u/s.147 of the Act. 8. The question as to whether the proceedings should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , unless we have got full and final facts before us. Accordingly, we set aside both the appeals to the file of the Commissioner of Income Tax(Appeals) with a direction that he shall give a complete finding in view of the above mentioned decisions regarding validity of reopening as well as he shall also consider other relevant decisions which may be relied before him. He shall also take into consideration the submission of the assessee regarding computation of eligible deduction. The issue regarding addition under the head estimated profits under local turnover stands already decided and is no longer subjudice. With the above observation, we dispose of both the appeals. 7. In the result, both the appeals are partly allowed for statistica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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