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TMI Blog2019 (8) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... would be the ones relating to WPMS No. 122 of 2013. 2. The petitioner is a partnership firm which is duly registered. According to the petitioner, the firm was constituted on 01.12.2003 vide partnership deed dated 01.12.2003 having following partners : "1. Shri Jitendra Kumar Gupta 2. Shri Aditya Kumar Gupta and 3. Shri Ashish Kumar Gupta" 3. Later in the year 2005, Smt. Meenakshi Gupta w/o Shri Jitendra Kumar Gupta was also inducted as a partner. This firm was reconstituted on 01.01.2009 with the same name i.e. Sharda Exports" with Sri Jitendra Kumar Gupta, Sri Aditya Kumar Gupta and Sri Ashish Kumar Gupta as partners, with its office at Plot No. 11, Sector-4, Sidcul Integrated Industrial Estate Ranipur, Haridwar and the firm M/s Sharda Exports which has the above three partners and Smt. Meenakshi Gupta as partner was dissolved on 31.3.2009. These facts are being stated here as one of the submissions of the learned counsel for the petitioner is that post 2009 there is a different firm than what was for the assessment year 2005-06 to assessment year 2008-09. 4. The firm is in the business of manufacture and export of handmade, hand tufted and hand woven carpets, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore in terms of sub-section (6) of Section 133-A read with sub-section (1) of Section 131, a notice was given to the petitioner. In reply to the notice, the petitioner objected to the survey and stated that it is in violation of law. The Revenue thereafter initiated reassessment proceedings under Section 147/148 of the Act. 8. Pursuant to the survey and the material discovered by the Revenue as far as assessment year 2005-06 is concerned, another notice was given to the petitioner on 29.03.2012. At the same time reassessment notices were sent to the petitioner for assessment year 2006-07, 2007-08 and 2008-09 as well, which have all been challenged before this Court. 9. The reasons for the reassessment were assigned by the Revenue, by disclosing the material it had discovered from the survey made in the factory premises at Haridwar and other places, which showed that there was no manufacturing activity being carried out at Haridwar in Uttarakhand. In the reasons assigned by the Revenue subsequent to the survey, it has been stated in detail as to what was reflected from the books of accounts and other documents in the survey. The material discovered showed that carpets were a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in body of Section 147 of the Act. The precise emphasis is on the words "and also", which is in the substantive part of Section 147. In short, what has been held that if reassessment was being done for reason "A" then Revenue can do reassessment on reason "B" only if it comes to the conclusion that reassessment for reason "A" is valid. If it comes to the conclusion that the reassessment for reason "A" is not at all called for then it is restrained from reassessing the assessee for reason "B". 13. Under what conditions and under what limitations, reassessment can be done is provided under Section 147 to Section 153 of the Income Tax Act. The essential condition for exercising reassessment is that the assessing officer must have "a reason to believe" that an income chargeable to tax has escaped assessment, for which notices were liable to be given under Section 147/148 of the Act. As there were conflicting opinions of different High Courts as to the limitations on reassessment, i.e. precisely as to whether an assessing officer can also determine on "other reasons for reassessment" i.e. the reasons other than what were given in the notice (under Section 147/148 of the Act), therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 proceedings. However, 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. 17. We have approached the issue of interpretation that has arisen for decision in these appeals, both as a matter of first principle, based on the language used in section 147(1) and on the basis of the precedent on the subject. We agree with the submission which has been urged on behalf of the assessee that section 147(1) as it stands postulates that upon the formation of a reason to believe that income chargeable to tax has escaped assessment for any assessment year, the Assessing Officer may assess or reassess such income "and also" any other income charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presently before this Court also, it is very clear that the dominant partners of the firm continue to be the same. To that extent, there has been no change in the firm, particularly as to the control of the affairs of the firm. When the firm was first constituted on 01.12.2003, it had following partners : "1. Shri Jitendra Kumar Gupta -Father 2. Shri Aditya Kumar Gupta and - Son 3. Shri Ashish Kumar Gupta -Son" 19. The father i.e. Jitendra Kumar Gupta had 10% share of the firm, whereas the remaining 90% share was divided equally between the two sons i.e. Aditya Kumar Gupta and Ashish Kumar Gupta having 45% share each. Thereafter when in the year 2005, the mother was also included as a partner, the sons continued to retain their share and only the share of Jitendra Kumar Gupta was now divided between him and his wife. In the newly constituted firm in the year 2005 the share of the partners was as under: "1. Shri Jitendra Kumar Gupta - 7% 2. Smt. Meenakshi Gupta - 3% 3. Shri Aditya Kumar Gupta - 45% 4. Shri Ashish Kumar Gupta - 45%" 20. In the newly constructed firm in the year 2009, although the share of the partners is not stated in the writ petition, but the fact i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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