TMI Blog2023 (12) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... r exercise of power u/s 263 of the Act, it is mandatory that the order passed by the Assessing Officer should be erroneous and prejudicial to the interest of the Revenue. A perusal of the assessment order shows that the returned income was accepted by the AO and no addition was made for reasons recorded at the time of issue of notice u/s 148 of the Act. This is an undisputed fact that the issues which prompted the AO to reopen the assessment were duly considered and reply of the assessee was accepted and no addition was made. This fact has also not been disturbed by the PCIT in his order u/s 263 of the Act. In our considered opinion, the AO could not have made the addition on the issues raised by the PCIT in his order as no addition was made on account of reasons recorded for reopening the assessment. No hesitation in setting aside the order of the PCIT and restore that of the Assessing Officer - Decided against revenue. - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND MS ASTHA CHANDRA, JUDICIAL MEMBER For the Assessee : Shri Somil Agarwal, Adv For the Department : Shri P.N. Barnwal, CIT-DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- This appeal b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riefly stated, the facts of the case are that assessment order dated 06.08.2019 framed u/s 147 r.w.s 143(3) of the Act was considered not only erroneous but also prejudicial to the interest of the Revenue by the PCIT Rohtak. 4. Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules. 5. The sum and substance of the submissions of the ld. counsel for the assessee is that the Assessing Officer could not have done what the PCIT expected him to do as the Assessing Officer had limited jurisdiction for completing reassessment proceedings based upon the reasons recorded for reopening the assessment. 6. It is the say of the ld. counsel for the assessee that the Assessing Officer could not have gone beyond the reasons recorded for reopening the assessment. 7. Supporting the order of the PCIT, the ld. DR vehemently state that though the Assessing Officer has accepted the source of cash deposit but did not investigate the nature of land alleged to be sold as agricultural land. It is the say of the ld. counsel for the assessee that the impugned la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und tenable. 5. In view of the fact and circumstances that the assessee failed to furnish satisfactory reply of the letter issued by this office in respect of source of cash deposits of Rs. 72,00,0001- deposited in the saving bank accounts maintained with Oriental Bank of commerce and State bank Of India and interest income of Rs. 7,7501- during the F.Y. 2011-12 relevant to A.Y. 2012- 13. Therefore cash deposit of Rs. 72,00,000/- in saving bank accounts and interest income of Rs. 7,7501- remained unexplained which exceeds the maximum amount no chargeable to tax for the relevant assessment year under consideration Hence, the said unexplained cash deposit of Rs. 72,00,0001- and interest income of R~ 7,7501- is required to be taxed in the hands of the assessee as per provisions of section 151 of the Income tax Act, 1961. 6. Keeping in view the facts narrated above, I am satisfied and have reason to believe that the income chargeable to tax on account of cash deposited in bank account 'and interest income totaling Rs. 72,07,750/- as well as any other income which comes to notice during assessment proceedings has escaped assessment by reasons of the failure on the part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the following show cause notice: 12. On a perusal of the aforementioned notice at Para 2 the PCIT himself has referred to the sale deed No. 13087 dated 23.12.2011 relating to sale of agricultural land. This very document was examined by the Assessing Officer as mentioned in his assessment order when he was examining the source of cash deposited in the Savings Bank account. 13. These facts go on to show that specific queries were raised to which specific reply was filed. Therefore, it cannot be said that the Assessing Officer did not make any enquiry. Moreover, assessment was reopened with specific reasons for reopening and those specific reasons have been duly examined by the Assessing Officer before completing assessment. 14. In our considered opinion, for exercise of power u/s 263 of the Act, it is mandatory that the order passed by the Assessing Officer should be erroneous and prejudicial to the interest of the Revenue. A perusal of the assessment order shows that the returned income was accepted by the Assessing Officer and no addition was made for reasons recorded at the time of issue of notice u/s 148 of the Act. 15. This is an undisputed fact that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subsection (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 the less, assess or reassess the income in respect of any issue which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under the section. 11. Thereafter, the High Court referred to the decision of the Rajasthan High Court in the case of CIT versus Shri Ram Singh, (2008) 306 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... caped income chargeable to tax. As per Explanation 3 if during the course of these proceedings the Assessing Officer comes to conclusion that some items have escaped assessment, then notwithstanding that those items were not included in the reasons to believe as recorded for initiation of the proceedings and the notice, he would be competent to make assessment of those items. However, the Legislature could not be presumed to have intended to give blanket powers to the Assessing Officer that on assuming jurisdiction under section 147 regarding assessment or reassessment of the escaped income, he would keep on making roving inquiry and thereby including different items of income not connected or related with the reasons to believe, on the basis of which he assumed jurisdiction. For every new issue coming before the Assessing Officer during the course of proceedings of assessment or reassessment of escaped income, and which he intends to take into account, he would be required to issue a fresh notice under section 148. 19. In the present case, as is noted above, the Assessing Officer was satisfied with the justifications given by the assessee regarding the items, viz., club fees, g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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