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Deputy Commissioner of Income-Tax Versus Takshila Educational Society

2015 (4) TMI 1103 - PATNA HIGH COURT

Reopening of assessment - Held that:- Once it is found that none of the reasons recorded by the Assessing Officer for initiating proceedings under section 147 was germane to initiation of such proceedings, then it has to be held that he had no reason to believe that any income had escaped assessment and, therefore, any further proceeding would be without jurisdiction. - Decided in favour of assessee - Miscellaneous Appeal Nos. 277 and 278 of 2010 - Dated:- 6-4-2015 - Ramesh Kumar Datta And Anjan .....

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tter arose out of reopening of the assessment of the assessee under section 147 of the Income-tax Act, 1961. The Assessing Officer after recording the reasons issued notice under section 147 of the Act to the assessee. Upon the assessee appearing, the assessment order has been passed. In the assessment ultimately made by the Assessing Officer, the findings have been recorded with regard to escaped assessment relating to the cost of construction on the basis of the report of the DVO ; but there i .....

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h was another ground for initiation of proceedings; rather the finding of escaped assessment was made for entirely different reasons. 5. Thus, it was contended on behalf of the assessee before the Tribunal that the Assessing Officer had no jurisdiction as the recording of reasons to believe are the pre-conditions for exercise of jurisdiction under section 147 of the Act. If he had no valid grounds or reasons to believe, then solely on other grounds it was not open to him to come to the findings .....

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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 recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (here after in this section and in sections 148 to 153 referred to as the relevant assessment year). Explanation 3.-For the purpose of assessment or reassessment under this section, the Assessing Offi .....

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the reasons to believe on which the notice had been issued under section 148(1) of the Act but also an additional grounds. The relevant part of section 148(1) and (2) is quoted below : "148.(1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period as may be specified in the notice, a return of his income or the income of any other person in respect of which he is .....

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s evident from a consideration of the aforesaid provisions that before issuing notice under section 147 of the Act for initiating proceedings, the Assessing Officer is required to record his reasons for doing so. Thus, the assumption of jurisdiction by him is the reason to believe that certain income of the assessee has escaped assessment or reassessment, which reasons have to be recorded by him in writing. 10. It is true that under the provisions of section 147 of the Act, it has been further c .....

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3 (Raj), in paragraphs 23 to 29 of which it has been held as follows (page 351) : "Reverting back to the language of section 147, this much is clear, that the sine qua non for conferment of jurisdiction on the Assessing Officer to initiate proceedings under that section is that he should have 'reason to believe' that 'any income chargeable to tax has escaped assessment for any assessment year' and that situation being available, i.e., the Assessing Officer having entertained .....

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course of proceedings under section 147'. The precise question, thus requiring to be considered is, as to whether, the conjunctive word used, being 'and', used between the expression '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 section 147' is required to be given its due, or is required to be ignored, or is required to be interpreted as ' .....

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ection, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (here after in this section and in sections 148 to 153 referred to as the relevant assessment year).' But then if it were to be so read, the word 'also' becomes redundant, and to make sense of the sentence, the section would be required to be read by ignoring the words 'also', as well, in which event, the section would read as under : ' .....

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year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year).' It is established principle of interpretation of statutes, that Parliament is presumed to be not extravagant, in using the words, and, therefore, every word used in the section is required to be given its due meaning. If considered on that principle, leaving apart for the moment, the aspect of interpretation of the word 'and' as 'or', the existence of the word .....

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