TMI Blog2022 (11) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... sition laid down in the case of Alagendran Finance Ltd., [ 2007 (7) TMI 304 - SUPREME COURT] is clearly applicable. Hence,we quash the revision order passed by PCIT u/s.263 of the Act and allow the appeal of assessee. - ITA No. 137/CHNY/2022 - - - Dated:- 16-11-2022 - SHRI MAHAVIR SINGH , VICE PRESIDENTAND SHRI G. MANJUNATHA , ACCOUNTANT MEMBER Appellant by : Shri N V Narayanan , Advocate Respondent by : Shri R. Mohan Reddy , CIT ORDER PER MAHAVIR SINGH , VICE PRESIDENT : This appeal by the assessee is arising out of the Revision order passed by the Principal Commissioner of Income Tax, Chennai-1 u/s.263 of the Income Tax Act, 1961 (hereinafter the Act ) vide C.No.217/U/s.263/PCIT-1/2020-21 dated 23.03.2021. The assessment was framed by the Income Tax Officer, Non-Corporate Ward 1(3), Chennai for the assessment year 2011-12 u/s.143(3) r.w.s. 147 of the Act vide order dated 18.12.2018. 2. At the outset, it is noticed that this appeal is delayed by 285 days. This appeal was filed before Tribunal only on 02.03.2022 and as per Form 36, the order of CIT(A) was received on 29.03.2021. The assessee has filed condonation petition stating that the delay wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which he had reason to believe and not otherwise. The PCIT cannot consider, the order to be erroneous, when the assessing officer did not have any belief of escapement of income in respect of cost of improvement. 4. Brief facts are that the assessee is an individual, filed a belated return of income on 31.07.2013 for the relevant assessment year 2012-13 declaring total income of Rs.13,77,840/-. Since, return was filed as belated return, it was not processed. The AO issued notice u/s.148 of the Act dated 29.03.2018 and the assessee in response to this notice filed return of income on 06.12.2018 declaring total income of Rs.20,56,000/- as against the total income declared in belated return at Rs.13,77,840/-. In the assessment framed by the AO u/s.143(3) r.w.s. 147 of the Act dated 18.12.2018, in response to reassessment notice u/s.148 of the Act, the reasons recorded was, that the assessee has holding a savings bank account with HSBC, Chennai, wherein total credit transaction during the period 01.04.2010 to 31.03.2011 is aggregating to Rs.2.29 crores out of which Rs.26.15 lakhs was cash deposit. The AO recorded the following reason: The assessee is holding a savings ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowance of expenses of Rs.52,414/- as is evident from para 9 of the re-assessment order dated 18.12.2018. He argued that now PCIT want to verify the following:- As per the revised computation of income, schedule 2, the assessee claimed Rs.34.64 lakhs as cost of improvement during the F.Y. 2004-05 while arriving at the LTCG. The cost of improvement was also indexed. The nature of expenditure as well as the details regarding the improvement was not produced. 6.1 The ld.counsel for the assessee in view of the above stated that the issue is squarely covered by the decision of the Delhi Bench of this Tribunal in the case of Dholadhar Investment Pvt. Ltd., vs. CIT in ITA No.628/Del/2010 vide order dated 31.10.2011. He also relied on the decision of Hon ble Supreme Court in the case of CIT vs. Alagendran Finance Ltd., (2007) 293 ITR 1, wherein the Hon ble Supreme Court has considered the Explanation C to section 263(1) of the Act and noted that the Explanation C deals with the powers of CIT in revision, which is clear and unambiguous, as in terms thereof, the doctrine of merger applies only in respect of special items which were the subject matter of appeal and not in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 297, is in relation to that which has escaped assessment, and does not extend to reopening the entire assessment for the purpose of redoing the same de novo. An assessee cannot agitate in any such reassessment proceedings matters forming part of the original assessment which are not required to be dealt with for the purpose of levying tax on that which had escaped tax earlier. Cases of underassessment are also treated as instances of escaped assessment. The order of reassessment is one which deals with the assessment already made in respect of items which are not required to be reopened, as also matters which are required to be dealt with in order to bring what had escaped in the earlier order of assessment, to assessment. An assessee who has failed to file an appeal against the original order of assessment cannot utilise the reassessment proceedings as an occasion for seeking revision or review of what had been assessed earlier. He may only question the extent of the reassessment in so far as the escaped assessment is concerned. The Revenue is similarly bound The same principle was reiterated by a Division Bench of the Calcutta High Court in Commissioner of Income-Tax v. Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X
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