TMI Blog2020 (2) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings under the section. Therefore, as no addition has been made on the reasons for which the assessment of the assessee is reopened, the other it issuance made by the learned assessing officer cannot be sustained. In view of this we allow ground number 1-3 of the appeal of the assessee. The effect of section 147 as it now stands after the amendment of 2009 can therefore, be summarised as follows : (i) the Assessing Officer must have reason to believe that any income chargeable to tax has escaped assessment for any assessment year ; (ii) upon the formation of that belief and before he proceeds to make an assessment, reassessment or recomputation, the Assessing Officer has to serve on the assessee a notice under sub-section (1) of section 148 ; (iii) the Assessing Officer may assess or reassess such income, which he has reason to believe, has escaped assessment 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 the section ; and (iv) though the notice under section 148(2) does not include a particular issue with respect to which income has escaped assessment, he may none ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come tax on 29/3/2017. In response to that notice assessee filed its return of income on 29/11/2017 declaring a net income of ₹ 147890/ . Further notice under section 143 (2) of the act was issued on 29/11/2017. 4. The learned assessing officer noted that assessee and his wife have purchased the property for ₹ 40 Lakhs and incurred expenses of registration of ₹ 270,000. Assessee was asked to explain the source of investment made for acquisition of the above property. Assessee explained that it has obtained an interest free loan of ₹ 40 lakhs from one company and the payment was directly made by that company to the seller of the property. The learned assessing officer on further examination found that the assessee and his wife are director of that company and their shareholding in that particular company is 50% each. He also noted that company had reserve and surplus of ₹ 1178304/ as on 31/3/2010 and ₹ 8 60376 as on 31/3/2009. Consequently the AO issued notice under section 2 (22) (e) of the act that why ₹ 20 Lakhs should not be taken as a deemed dividend income in the hands of the assessee. The assessee explained that Company is operati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has filed his return of income showing that salary income of ₹ 3 80000 therefore to the net returned income as per ITR of ₹ 1 47490/ . He further made an addition of ₹ 3 80000/ . Accordingly the total income of the assessee was determined at ₹ 1 705794/ and passed an order under section 143 (3) of the income tax act on 27/12/2017. 5. Assessee being aggrieved with the order of the learned assessing officer preferred an appeal before the learned CIT A challenging reopening of the assessment as well as on the merits. The learned CIT A dismissed the appeal of the assessee on both the grounds. Therefore, assessee is in appeal before us. 6. The learned authorised representative submitted a paper book and relied upon the copy of the written submission filed before us which was placed before the learned CIT A. He referred to the order sheet obtained by the assessee, which is placed at page number 13 to 17 of the paper book. He further referred to approval obtained under section 151 of the income tax act on this issue wherein the principal Commissioner of income tax has mentioned that he is satisfied that this is a fit case for issue of notice under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see to disclose is correct and true income, the income chargeable to tax for the assessment year 2010 11 has escaped assessment within the meaning of section 147 of the income tax 1961. 9. Therefore, admittedly, the case of the assessee was reopened for taxing the source of investment of purchase of property by the assessee. However, on perusal of the assessment order it is found that there is no such addition made in the hands of the assessee on that account. Thus, it is apparent that the reason for which the case of the assessee was reopened is not at all used for adjusting the income of the assessee. On reading of the provisions of section 147 and explanation 3 to that section, it is mandatory that for the purpose of assessment or reassessment, the assessing officer may assess reassess the income in respect of any issue, which has escaped the assessment and also , such issue comes to his notice subsequently in the course of the assessment proceedings, notwithstanding that the reasons for such issue has not been included in the reasons recorded under section 148 of the income tax act. Therefore it is apparent that if for the reasons the case of the assessee is reopened does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter issuing a notice under section 148 , he accepts 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 notice under section 148 would be necessary in the event of challenge by the assessee. The effect of section 147 as it now stands after the amendment of 2009 can therefore, be summarised as follows : (i) the Assessing Officer must have reason to believe that any income chargeable to tax has escaped assessment for any assessment year ; (ii) upon the formation of that belief and before he proceeds to make an assessment, reassessment or recomputation, the Assessing Officer has to serve on the assessee a notice under sub-section (1) of section 148 ; (iii) the Assessing Officer may assess or reassess such income, which he has reason to believe, has escaped assessment 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 the section ; and (iv) though the notice under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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