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TMI Blog2012 (2) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2011, the following substantial question of law was framed: "Whether the tribunal was right in law in holding that the Commissioner of Income Tax had wrongly invoked jurisdiction under Section 263 of the Income Tax Act, 1961." 3. The assessee is a company and for the assessment year 1993-94 did not file their return of income. During the course of assessment proceedings for the assessment year 1997-98, it was noticed that Central Bureau of Investigation had conducted search in the premises in which FDRs worth Rs.20 lacs relating to assessment year 1993-94 were found in possession of Poonam Rani Singh, a director of the respondent company. However, Poonam Rani Singh claimed that the FDRs though in her name, actually belonged to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 148 of the Act. 7. With regard to the first aspect, the Commissioner of Income Tax observed that only seven parties were issued notices on random basis and their statements were recorded, but notices were not issued to other share applicants. The Commissioner of Income Tax in his order has mentioned lacunas and defects in the statements of the seven share applicants and the manner in which they were recorded. Accordingly, he held that the Assessing Officer had failed to make necessary verification and enquiries, which were required. Direction was given to the Assessing Officer to carry out investigation and enquiries regarding receipt of share application money. 8. The assessee preferred an appeal before the tribunal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Bombay High Court in CIT versus Jet Airways India Limited, (2011) 331 ITR 236 (Bom.) in which it has been held as under: "The effect of section 147 as it now stands 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 sub-section (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 inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer entertained a reason to believe, albeit even a genuine reason to believe, would not continue to vest him with the jurisdiction, to subject to tax, any other income, chargeable to tax, which the Assessing Officer may find to have escaped assessment, and which may come to his notice subsequently, in the course of proceedings under section 147." 12. The Division Bench in Ranbaxy Laboratories Limited (supra)considered the judgment of the Supreme Court in the case of V. Jagmohan Rao versus CIT and EPT, (1970) 75 ITR 373(SC) and CIT versus Sun Engineering Works Private Limited, (1992) 198 ITR 297 (SC) and has then elucidated: "18. We are in complete agreement with the reasoning of the Division Bench of the Bombay High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, gifts and presents and provision for leave encashment, but, however, during the assessment proceedings, he found the deduction under sections 80HH and 80-I as claimed by the assessee to be not admissible. He consequently while not making additions on those items of club fees, gifts and presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed by the Assessing Officer should be erroneous and prejudicial to the interest of the Revenue. In the present case, the Assessing Officer did not make any addition for the reasons recorded at the time of issue of notice under Section 148 of the Act. This position is not disputed and disturbed by the Commissioner of Income Tax in his order under Section 263 of the Act. Sequitur is that the Assessing Officer could not have made an addition on account of share application money in the assessment proceedings under Section 147/148. Accordingly, the assessment order is not erroneous. Thus, the Commissioner of Income Tax could not have exercised jurisdiction under Section 263 of the Act. 15. The question of law is accordingly answered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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