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TMI Blog2023 (9) TMI 1157X X X X Extracts X X X X X X X X Extracts X X X X ..... d." 3. Ld. Counsel for the assessee submitted that the issue raised in the additional ground is purely a legal issue challenging the legality of the assessment framed by the AO u/s 143(3) r.w.s. 147 of the Act dated 06.12.2019. Ld. A/R submitted that the issued raised is purely a legal issue which goes to the root of the matter and that the facts involved in the additional ground are available before the Tribunal and thus, no further verification of facts are required either before the AO or Ld. CIT(A). Ld. A/R therefore prayed that the issue raised in the additional ground may kindly be admitted for adjudication and in defence of his arguments, he relied on the decisions of Hon'ble Apex Court in National Thermal Power Co. Ltd. Vs. CIT [1998] 229 ITR 383 (SC) and Jute Corporation of India Ltd. Vs. CIT [1991] 187 ITR 688 (SC). 4. Ld. D/R on the other hand, submitted that the issue was not raised either before the AO or the first appellate authority and therefore, the same kindly be dismissed. 5. After hearing the rival contentions and perusing the material on record, we find that the assessee has challenged the legality of the assessment framed u/s 143(3) r.w.s. 147 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income-tax Officer. This court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also. The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income-tax (Appeals) takes too narrow a view of the powers of the Appellate Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. The first addition is in respect of loan taken from Sh. Subhas Biswas of Rs. 10 lakh which according to the AO remained unexplained. Consequently, the AO disallowed the interest of Rs. 79,521/- credited on the said loan resulting into gross addition on account of loan and interest thereon the to tune of Rs. 10,79,521/-. Similarly, Rs. 7,20,000/- was added by the AO on account of loan taken from Smt. Sangeeta Roy. Ld. Counsel for the assessee drew our attention by referring to the reasons recorded a copy of which is placed at page no. 14 to 21 of the paperbook and pointed out that these two issues were not the subject matter of the reasons recorded u/s 148(2) of the Act. Ld. A/R prayed that the addition made by the AO in the order passed u/s 143(3) r.w.s. 147 of the Act are without the valid jurisdiction and therefore, the assessment framed may kindly be quashed. In support of his argument, Ld. A/R relied on the decision of Hon'ble Calcutta High Court in the case of CIT Vs. M/S Infinity Infotech Parks Ltd ITAT No.60 of 2014 in GA No.1736 of 2014 besides relying on Ranbaxy Laboratory Ltd. Vs CIT 336 ITR 136 (Del) and CIT Vs. Jet Airways Ltd 331 ITR 236 (Bom), which have been f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12-13 and the assessee has not shown any addition to his assets to the tune of Rs 6 lacs. On careful perusal, it was found that Mrs. Archana Roy (wife of assessee) has never filed any return but has managed to invest Rs. 600000/- with Mr. Mukesh Roy in the aforesaid property. Her case was later reopened u/s147. Thus the creditworthiness of Archna Roy is also not established. On checking the records of e-filing portal it is found that the assessee has filed its return for AY 2012-13 on 25/07/2012. The return was perused and it was revealed that the assessee has not shown or mentioned any such transaction or income in the return filed. From the details discussed above, it is evident that the assessee has done the above investment from the funds not declared in its books. This clearly depict that assessee's income has escaped assessment and has not been offered for tax. The out of books investment as discussed above is Rs. 600000/-. Based on these, I have reasons to believe the income chargeable to tax has escaped assessment to the tune of Rs. 6,00,000/- within the meaning of section 147 of the Income Tax Act and the assessee has not disclosed full and truly all material f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the returned income vide order dated 19.02.2016. Thereafter the case of the assessee was re-opened u/s 147 of the Act by issuing notice u/s 148 of the Act on the ground that income of the assessee to the tune of Rs. 19,11,049/- has escaped assessment within the meaning of Section 147 of the Act as the assessee has not disclosed full and true facts necessary for the assessment of income. Ld. A/R also submitted that by referring to the reasons recorded a copy of which is placed at page 5 of the paper book that the assessee in the instant financial year has constructed a three-storied building consisting three flats on each floor on a piece of land measuring 02 cottah 08 chittack 41 sq.feet at A-79, Lake Gardens, Kolkata-700 045 and the total expense to the tune of Rs. 3,70,000/- for tenant evacuation and Rs. 55,05,646/- for construction of all these flats. The AO noted in the reasons recorded that these costs were borne by the assessee along with other two partners namely Mrs. Archana Roy and Mr. Mukesh Roy. The AO also noted that all these three partners got one flat each as their share on completion of the project and the value of each flat was found to be of Rs. 70,52,500/-. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt has held that the AO has to first demonstrate the failure on the part of the petitioner failing which the re-opening is bad in law. Ld. A/R referred to the last para of the decision of the Hon'ble Apex Court wherein the Court has upheld the decision of the Hon'ble High Court setting aside the re-opening notice issued u/s 148 of the Act. Ld. A/R therefore, prayed that in view of the latest decision of the Hon'ble Apex Court, the re-opening may be quashed 16. Ld. D/R on the other hand submitted that the issue has been raised for the first time by Ld. Counsel for the assessee and therefore, the same may kindly not be admitted and be dismissed. 17. After hearing the rival contentions and perusing the material on record, we find that undisputedly the case of the assessee has been re-opened u/s 147 of the Act by issuing notice u/s 148 of the Act on 26.03.2019 which is apparently after a period of four years from the end of relevant assessment year and therefore, the re-opening u/s 147 of the Act can only be made in terms of the first proviso to Section 147 of the Act. In the present case we note that the issue has been enquired into by the AO during the original assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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