TMI Blog1979 (9) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... September 4, 1968, and his son, Maliram, has been substituted in his place. On account of non-compliance of notices under ss. 22(2), 22(4) and 23(2) of the Indian I.T. Act, 1922 (hereinafter referred to as " the Act of 1922 "), the assessee was assessed ex parte under s. 23(4) on January 28, 1958, and his total income was assessed at Rs. 2,50,000. He filed an application under s. 27 for reopening the assessment but the same was dismissed by the ITO on August 1, 1958. The assessee preferred appeals against the orders of the ITO dated January 28, 1958, and August 12, 1958. The AAC rejected the appeal arising out of the ITO's order under s. 27 of the Act of 1922, but allowed the appeal arising out of the order under s. 23(4) in part, and red ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the AAC. The Tribunal held that where a reassessment is made in respect of an income which had escaped assessment, the jurisdiction of the ITO under s. 147 was confined to such income which had escaped assessment and did not extend to revising or reopening the whole assessment. However, it further held that, after considering the facts of the case in regard to the addition of Rs. 10,000 particularly the fact that the property did not belong to the assessee's HUF, there was no justification for treating the amount invested in purchasing the house for the assessee's wife as income of the HUF and, as a necessary consequence, the rental income therefrom should also be excluded from the assessment. In this view of the matter, the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned (hereafter in sections 148 to 153 referred to as the relevant assessment year) ......" (The underl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1973] 92 ITR 453 (All), it was held that on reassessment, the entire assessment is not opened. A claim for expenditure which has been disallowed during the original assessment cannot be reagitated on the assessment being reopened for bringing to tax income which has escaped assessment. The controversy on reassessment is confined to matters which are relevant in respect of the income which had not been brought to tax during the course of the original assessment. The question came up for consideration, though in somewhat different circumstances, before their Lordships of the Supreme Court in V. Jaganmohan Rao v. CIT/EPT [1970] 75 ITR 373. Their Lordships observed as follows : " Section 34 in terms states that once the Income-tax Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of the assessee to disclose fully and truly all material facts necessary for his assessment for that year, but extends to taxing all amounts that had escaped assessment. In other words, where the ITO validly initiates reassessment proceedings under s. 147(a) in respect of a particular item, he can, during the reassessment proceedings, deal with all items falling under cl.(a) or cl. (b) though they may not have been dealt with specifically in the notice, that is to say, his jurisdiction is not limited only to the items in respect of which the notice was issued. As we have already observed above, the term " such income " in s. 147 refers only to the entire escaped income. We are, therefore, of Opinion that in the facts and circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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