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TMI Blog2012 (7) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.1 The learned Commissioner of Income Tax(Appeals) erred in holding that reopening of the assessment is not valid thereby, canceling the reassessment order. 2.2 The Commissioner of Income Tax(Appeals) failed to note that once an assessment is reopened, the entire assessment is open before the Assessing Officer and he can consider all the issues in respect of which 'income has escaped assessment'. 2.3 The learned Commissioner of Income Tax(Appeals) erred in placing reliance on the Hon'ble High Court P&H decision in the case of Atlas Cycle Industries (180 ITR 319)(1989) in the light of the Supreme Court's decision in the case of Sun Engineering Works Pvt Ltd in 198 ITR 297, when the proceedings under Section 147 are initiated, the same is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income for Assessment Year 2004-05 on 20.10.04 declaring a loss of Rs. 6,47,971/-. This return was processed under Section 143(1) of the Act. Subsequently, the Assessing Officer reopened the assessment by issuing a notice under Section 148 of the Act on 23.01.08. The reasons for reopening the assessment was that the Addl. Commissioner of Income Tax, Salary Range-II, Chennai, passed on the information to the Assessing Officer of the assessee informing that while completing the assessment under Section 143(3) in the case of Late Shri M E Duraiswamy represented by legal heir Smt. Gayathri Viswanathan, it is seen that during the previous year relevant to the Assessment Year 2004-05, the above mentioned assessee has transferred an immovable prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income from assessment before issuing a notice under Section 148 of the Act. Therefore, the reopening of the assessment was bad in law for which the assessee relied on the following decisions:- 1. Shambhu Nath Sheo Prasad Vs. C.I.T. [1995] 113 CTR 166 (Pat.) Reasons must be recorded on the file. The reasons must be cogent showing the application of mind by the Assessing Officer. The reasons will not be valid if they did not disclose the material which led the Assessing Officer to the belief required under Section 147. 2. C.I.T. Vs. Kerala State Cashew Development Corporation (1992) 198 ITR 520 (Ker.) Recording of reasons is mandatory at the stage of issue of notice under Section 148 and is an essential condition to vest jurisdiction t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 26.12.2008 is annulled." 6. The Departmental Representative argued that even if no addition is made by the Assessing Officer on the ground for which the assessment was re-opened, the Assessing Officer still has jurisdiction to make addition on other grounds. When pointed out by the Bench that the orders of the High Courts are against his pleadings, he could not cite any decision, which was in favour of the Revenue. 7. On the other hand, the Authorised Representative of the assessee filed before us a copy of order of Chennai 'C' Bench of the Tribunal in the case of M/s.Caress Beauty Care Products (P) Ltd. in ITA No.1431/Mds./2011 order dated 23.11.11 and submitted that on the same issue, the Tribunal had confirmed the order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in [2011] 331 ITR 236 (Bom.) wherein it was held as under:- "Explanation 3 to section 147 of the Income tax Act, 1961, was inserted by the Finance (No.2) Act of 2009, with effect from April, 1, 1989. The effect of the Explanation is that even though the notice that has been issued u/s.148 containing the reasons for reopening the assessment does not contain a reference to a particular issue with reference to which income has escaped assessment, the Assessing Officer may assess or reassess the income in respect of any issue which has escaped assessment, when such issue comes to his notice subsequently in the course of the proceedings. Parliament having used the words "assess or reassess such income and also any other income chargeable to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssuing a notice u/s.148, he accepts the contention of the assessee and holds that the income which he has initially formed a reason to believe had escaped assessment, has as a matter of fact not escaped assessment, it is not open to him independently to assess some other income. If he intends to do so, a notice u/s.148 would be necessary in any event of challenge by the assessee". To the same effect is the decision of Hon'ble Rajasthan High Court in the case of C.I.T. vs. Dr.Devendra Gupta [2011] 336 ITR 59 (Raj.) and of Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. Vs. C.I.T. [2011] 336 ITR 136 (Del). Therefore, we do not find any infirmity in the order of the Commissioner of Income Tax(Appeals) and the same is hereby ..... X X X X Extracts X X X X X X X X Extracts X X X X
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