TMI Blog2013 (9) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... e reasons recorded - Following decision of M/s Swarnadhara IJMII Integrated Township Development Company Versus DCIT, Hyderabad [2013 (6) TMI 624 - ITAT HYDERABAD] - Decided against Revenue. Assessing Officer is empowered to assess any other escaped income which comes to his notice in course of the reassessment proceedings along with escaped income which was the subject matter of reopening as per the reasons recorded therein. Without assessing the income as per the reasons recorded, the Assessing Officer cannot assess any other income which was not the subject matter of reopening. Therefore, in the facts of the present case, the Assessing Officer could not have independently assessed such other income without assessing the income which escaped assessment as per the reasons recorded and on the basis of which the proceedings u/s 147 were initiated. - ITA Nos. 1228 to 1230/Hyd/11, C.O. Nos. 71 to 73/Hyd/11 - - - Dated:- 28-6-2013 - Shri Chandra Poojari And Shri Saktijit Dey,JJ. For the Petitioner : Sri M. H. Naik For the Respondent : Shri V. Raghavendra Rao ORDER Per Saktijit Dey, Judicial Member. These set of appeals by the department and Cross Objections by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment cannot be reopened on a mere change of opinion. It was contended by the assessee that during the original assessment proceedings the assessee had submitted all the relevant materials and records and the Assessing Officer having examined all materials and completed the assessment by allowing exemption u/s 10B, reopening of the assessment on considering the very same material would amount to change of opinion. The Assessing Officer completed the assessment u/s 143(3) read with section 147 of the Act allowing deduction u/s 10B of the Act. However, the Assessing Officer disallowed the claim of set off of unabsorbed depreciation brought forward from the assessment years 1995-96 and 1996-97. The assessee being aggrieved of the assessment order passed for the aforesaid years u/s 143(3) read with section 147 preferred an appeal before the CIT (A). 3. Before the CIT (A), the assessee challenged the initiation of proceedings u/s 147 of the Act as well as the merits of disallowance. The CIT (A) while upholding the action of the Assessing Officer in initiating proceedings u/s 147 of the Act for all the assessment years however allowed the assessee's contention with regard to merits o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, while completing the assessments for the aforesaid years u/s 143(3) read with section 147 of the Act, the Assessing Officer has not disturbed the exemption claimed u/s 10B of the Act which was allowed in the original assessment. On the other hand, the Assessing Officer disallowed the claim of set off of unabsorbed depreciation relating to assessment years 1995-96 and 1996-97 against the business income declared for the aforesaid assessment years. Thus, it is very much clear in the reassessment proceedings the Assessing Officer has made assessment of income other than the income which was subject matter for reopening as per the reasons recorded while initiating proceedings u/s 147 of the Act. In other words, the reasons recorded for reopening the assessment has no nexus with the income ultimately assessed u/s 147 of the Act. The Assessing Officer without assessing the escaped income as per the reasons recorded has considered some other income which was never the subject matter of reopening as per the reasons recorded. The Hon'ble Bombay High Court in the case of Jet Airways (I) Ltd. (supra) while examining the identical issue held as under:- "Interpreting the provision as it st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lieve is not assessed or reassessed, it would not be open to the Assessing Officer to independently assess only that income which comes to his notice subsequently in the course of the proceedings under the section as having escaped assessment. If upon the issuance of a notice under section 148(2), the Assessing Officer accepts the objections of the assessee and does not assess or reassess the income which was the basis of the notice, it would not be open to him to assess income under some other issue independently. Parliament when it enacted the provisions of section 147 with effect from April 1, 1989 clearly stipulated that the Assessing Officer has to assess to reassess the income which he had reason to believe had escaped assessment and also any other income chargeable to tax which came to his notice during the proceeding. In the absence of the assessment or reassessment of the former, he cannot independently assess the latter." The High Court further held as under:- Explanation 3 lifts the embargo, which was inserted by judicial interpretation, on the making of an assessment of reassessment on grounds other than those on the basis of which a notice was issued under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o rewrite the language used by Parliament. Our view has been supported by the background which led to the insertion to Explanation 3 to section 147. Parliament must be regarded as being aware of the interpretation that was placed on the words" and also" by the Rajasthan High Court in Shri Ram Singh [2008] 306 ITR 343. Parliament has not taken away the basis of that decision. While it is open to Parliament, having regard to the plenitude its legislative powers to do so, the provisions of section 147 as they stood after the amendment of April 1, 1989, continue to hold the field. " 7. The Hon'ble Delhi High Court also followed the aforesaid ratio in case of Ranbaxy Laboratories Ltd. Vs. CIT (336 ITR 136) (Delhi) wherein it was held as under:- "We are in complete agreement with the reasoning of the Division Bench of the Bombay High Court in the case of CIT v. Jet Airways (I) Limited (2011) 331 ITR 236 (Bom). We may also note that the reading of section 147 is "income escaping assessment" and that of section 148 "issue notice where income escaped assessment". Sections 148 is supplementary and complimentary to section 147. Sub-section (2) of section 148 mandates reasons for issuance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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