TMI Blog2021 (8) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... d not be open to the Assessing Officer to assess income under some other issue independently. - Decided in favour of assessee. - ITA No. 2830/DEL/2018 - - - Dated:- 29-7-2021 - N. K. Billaiya , Member ( A ) And K. N. Chary , Member ( J ) For the Appellant : S.K. Tulsian, Abha Agarwal, Bhoomija Verma, A. Nancy Rathi, Advs. and Ashwani Kumar, CA For the Respondents : S.N.A Nazmi, Sr. DR ORDER Per N. K. Billaiya, Accountant Member This appeal by the assessee is preferred against the order of the CIT(A) - 35, New Delhi, dated 02.01.2018 pertaining to A.Y 2009-10. 2. The grievances of the assessee read as under: 1. That the order dated 02-01-2018 passed u/s. 250 of the Income-tax Act, 1961 (hereinafter called the Act ) by the Learned Commissioner of Income-Tax (Appeals) 35 New Delhi is against law and facts on the file in as much as he was not justified to uphold the action of the Learned Income Tax Officer, Ward -11(4), New Delhi in passing the order u/s. 148 of the Act. 2. That the order dated 02-01-2018 passed u/s. 250 of the Act by the Learned Commissioner of Income-Tax (Appeals) -35 New Delhi is against law and facts on the file in as much as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ward 13( 3), Delhi Room No. 324, C. R. Building, I, P. Estate, C. R. Building, Delhi 7 25 Lacs 2, Matchless Infrastructure Pvt. Ltd. AAECM 5742 J Circle 16( 2) Delhi Room No. 308, C. R. Building, I. P. Estate, C. R, Building, Delhi, 7 90 Lacs 3 . Golden Job Finder Pvt. Ltd. AACCG4539K Ward 10( 2), Delhi. . Room No. 374 C. R. Building,. I. P. Estate, C. R. Building, Delhi 7 95 Lacs 4 . Celebration Infrabuild Pvt. Ltd. AADCG 2557J Ward 5( 4), Delhi. Room No. 229B, C. R. Building, I. P. Estate, C. R. Building, Delhi 715 Lacs, The above mentioned company is assessed, with you. Credible information in respect of him has been received by this unit on 09.12.2009. The main all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us beneficiary companies. The undersigned is providing a cash trail of beneficiary company is layering under your jurisdiction. The following bank accounts of proprietors: S. No Name of Account Holder Bank Branch A/c No 01. Mahendra Suppliers DCB Bank, Kalbadevi Branch, Mumbai 00221300000532 02 Ambika Udyog DCB Bank, Kalbadevi Branch, Mumbai 0022130000050 03. Karuna Securities DCB Bank, Kalbadevi Branch, Mumbai 00221300000569 04. Akshay Traders DCB Bank, Kalbadevi Branch, Mumbai 00221300000578 05. Shree Hari Suppliers DCB Bank, Garihat Branch, Kolkata 08721200000046 06. Durga Udyog DCB Bank, Garihat Branch, Kolkata 08721200000064 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Income Tax or Pr. Commissioner of Income Tax or Commissioner of Income Tax, in view of the amended provision of section 151 w.e.f 01.06.2015, The necessary sanction in this regard is being obtained separately from Pr. Commissioner of Income Tax-04, Delhi before the issue of notice u/s/148 for reopening of assessment under section 147 in the case of assessee company. (Mahender Kumar Meena) Income Tax Officer, Ward-10(2), New Delhi Submitted for kind approval please. 5. A perusal of the reasons recorded, extracted hereinabove, for reopening the assessment clearly show that the Assessing Officer had reasons to believe that income to the extent of ₹ 95 lakhs as per information mentioned in the reasons has escaped assessment in the case of the assessee for A.Y 2009-10. 6. Strictly keeping in mind the reasons for reopening the assessment mentioned hereinabove, let us now see how the assessment order dated 28.12.2016 framed u/s. 147 r.w.s 143(3) of the Act was completed: Income as above ₹ 26,31,781/- Additions Disallowance u/s. 68 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The effect of Explanation 3 which was inserted by the Finance (No. 2) Act of 2009 is that even though the notice that has been issued under section 148 containing the reasons for reopening the assessment does not contain a reference to a particular issue with reference to which income has escaped assessment, the Assessing Officer may assess or reassess the income in respect of any issue which has escaped assessment, when such issue comes to his notice subsequently in the course of the proceedings. The reasons for the insertion of Explanation 3 are to be found in the Memorandum explaining the provisions of Finance (No. 2) Bill of 2009. The Memorandum treats the amendment to be clarificatory and contains the following Explanation: Some courts have held that the Assessing Officer has to restrict the reassessment proceedings only to issues in respect of which the reasons have been recorded for reopening the assessment. He is not empowered to touch upon any other issue for which no reasons have been recorded. The above interpretation is contrary to the legislative intent. With a view to further clarifying the legislative intent, it is proposed to insert an Explanation i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In other words, when proceedings are already on in respect of one item in respect of the income for which he had already recorded reasons is it necessary that he should record reasons for assessing or reassessing any of the items which are totally unconnected with the proceedings already initiated. Suppose under two heads income has escaped assessment and those two heads are inter-linked and connected, the proceedings initiated or notice already issued under sub-section (2) of section 148 would be sufficient if the escaped income on the second head comes to the knowledge of the officer in the course of the proceedings. But if both the items are unconnected and totally alien then the assessing authority has to follow sub-section (2) of section 148 with regard to the escaped income which comes to his knowledge during the course of the proceedings. Hence, the view of the Punjab and Haryana High Court and the Kerala High Court was that, once the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment and proceeds to issue a notice under section 148, it is not open to him to assess or, as the case may be, reassess the income under an independe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stands and without adding or deducting from the words used by Parliament, it is clear that upon the formation of a reason to believe under section 147 and following the issuance of a notice under section 148, the Assessing Officer has the power to assess or reassess the income, which he has reason to believe had escaped assessment and also any other income chargeable to tax. The words and also cannot be ignored. The interpretation which the Court places on the provision should not result in diluting the effect of these words or rendering any part of the language used by Parliament otiose. Parliament having used the words assess or reassess such income and also any other income chargeable to tax which has escaped assessment , the words and also cannot be read as being in the alternative. On the contrary, the correct interpretation would be to regard those words as being conjunctive and cumulative. It is of some significance that Parliament has not used the word or . The Legislature did not rest content by merely using the word and . The words and , as well as also have been used together and in conjunction. The Shorter Oxford Dictionary defines the expression also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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