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TMI Blog2016 (3) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... return which was later on assessed at Rs. 2,67,370/- under section 143(3) of the Act. While completing the assessment, the Assessing Officer has made an addition of Rs. 10,000/- as gross profit addition and small additions under different heads on account of personal use of vehicle and non-maintenance of bills and vouchers. Accordingly, small additions were made under the head out of trading account, out of scooter running expenses, out of deepawali expenses, out of car maintenance and out of sale of assets debited in profit and loss account. Except these additions, no other addition was made under any other head. When the matter was travelled to the ld. CIT(A), the ld. CIT(A) has observed in his order that huge balances exist against sund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cement is not sustainable in the eyes of law. In support of his contention, the ld. counsel for the assessee has placed reliance upon the judgment of the Hon'ble Delhi High Court in the case of CIT vs. Sardari Lal & Co., 251 ITR 864, in which the Hon'ble High Court has categorically held, in the light of various judicial pronouncements of different High Courts and Apex Court, that whenever question of taxability of income from new source of income is concerned, which had not been considered by the Assessing Officer, the jurisdiction to deal with the same in appropriate cases may be dealt with under section 147/148 and 263 of the Act, if requisite conditions are fulfilled. It is inconceivable that in the presence of such provisions, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he hands of the assessee. I have also carefully perused the judgment of the Hon'ble High Court in the case of CIT vs. Sardari Lal & Co. (supra), in which Hon'ble High Court has adjudicated the powers of the ld. CIT(A) conferred under section 251(1)(a) of the Act in the light of various judicial pronouncements of different High Courts and Apex Court and was of the view that whenever question of taxability of income from new source of income is concerned, which has not been considered by the Assessing Officer, the ld. CIT(A) or the first appellate authority cannot examine that issue or new source of income. The relevant observation of the Hon'ble High court is extracted hereunder for the sake of reference:- "A similar question ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was submitted that a different view was expressed about the scope and ambit of the power of the first appellate authority vis-a-vis the sources considered by the assessing officer and even if the action of the first appellate authority related to a new source of income not considered by the assessing officer, it was not impermissible. It is to be noted that in Union Tyres' case (supra), this decision was also considered by this court in the background of what had been stated in Daluram's case (supra) and it was observed that there was really no difference from the view expressed earlier in Shapoorji's case (supra) and Chamaria's case (supra). Learned counsel for the revenue also submitted that this conclusion of the Divisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making the assessment, but the issue whether these wide powers also include the power to discover a new source of income was not commented upon. Consequently, the view expressed in Shapoorji's case (supra) and Chamaria's case (supra) still holds the field. It may be noted that the issue was considered in CIT v. McMillan and Co. (1958) 33 ITR 182 (SC). Referring to a decision of the Bombay High Court in Narondas Manohar Dass v. CIT (1957) 31 ITR 909 (Bom), it was held that the language used in section 31 of the old Act is wide enough to enable the first appellate authority to correct the Income Tax Officer not only with regard to a matter which has been raised by the assessed but also with regard to a matter which has been considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was also possible, but having regard to the provisions of sections 34 and 33B, which made provision for assessment of escaped income from new sources, the interpretation suggested on behalf of the revenue would be against the view which had held the field for nearly 37 years." (Emphasis, here italicised in print, supplied). 4. Looking from the aforesaid angles, the inevitable conclusion is that whenever the question of taxability of income from a new source of income is concerned, which had not been considered by the assessing officer, the jurisdiction to deal with the same in appropriate cases may be dealt with under section 147/148 of the Act and section 263 of the Act, if requisite conditions are fulfillled. It is inconceivable that in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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