TMI Blog2020 (9) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... sment order passed under section 143(3) r.w.s. 147. A perusal of the assessment order shows that the assessment was reopened to examine misuse of Client Code Modification for tax evasion. No addition was made by the Assessing Officer in respect of the issue for which the assessment was reopened. It is a well settled law that where no addition is made on the issue for which the assessment is reopened, it is not open to the Assessing Officer to make independent addition for which he had not recorded reason to believe for issuing notice u/s 148. No error in the action of AO in not travelling to other issues for making addition once no addition was made on the issue for which assessment was reopened. The PCIT clearly erred in invoking rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was given from borrowed funds. The PCIT further observed that the assessee has not shown any interest from borrowed money, as such, interest expenditure debited to the P L Account was required to be disallowed in proportion to money borrowed but not used for business purpose. The ld.Authorized Representative of the assessee contended that the scope of examination in reassessment proceedings available to the Assessing Officer was limited to examine misuse of client code modification. Since, no addition was made by the Assessing Officer, for which assessment was reopened, the Assessing Officer could not have travelled to other issues. To buttress his arguments the ld.Authorized Representative of the assessee relied on the decision of the Hon& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the issue for which the assessment was reopened. It is a well settled law that where no addition is made on the issue for which the assessment is reopened, it is not open to the Assessing Officer to make independent addition for which he had not recorded reason to believe for issuing notice u/s 148 of the Act. The Hon ble Jurisdictional High Court in the case of CIT vs. Jet Airways (India) Limited (supra) has elucidated this principle. The relevant extract of the findings of the Hon ble Court on this issue reads as under:- 16. Explanation 3 lifts the embargo, which was inserted by judicial interpretation, on the making of an assessment or reassessment on grounds other than those on the basis of which a notice was issued under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 148 would be necessary, the legality of which would be tested in the event of a challenge by the assessee. (Emphasized by us.) The Hon ble High Court while passing the aforesaid judgment also considered the decision of Hon ble Supreme Court of India in the case of CIT vs. Sun Engineering Works (P) Ltd. reported as 198 ITR 297, wherein, the Hon ble Apex Court interpreted the provisions of section 147 as they stood prior to the amendment on 1-4-1989. 5. Thus, in view of the settled legal position, we find no error in the action of Assessing Officer in not travelling to other issues for making addition once no addition was made on the issue for which assessment was reopened. The PCIT clearly erred in invoking revisional juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than taking a pedantic view of the rule requiring pronouncement of orders within 90 days, disregarding the important fact that the entire country was in lockdown, we should compute the period of 90 days by excluding at least the period during which the lockdown was in force. We must factor ground realities in mind while interpreting the time limit for the pronouncement of the order. Law is not brooding omnipotence in the sky. It is a pragmatic tool of the social order. The tenets of law being enacted on the basis of pragmatism, and that is how the law is required to interpreted. The interpretation so assigned by us is not only inconsonance with the letter and spirit of rule 34(5) but is also a pragmatic approach at a time when a disaster, n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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