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TMI Blog2013 (5) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... as recorded for initiation of the proceedings and the notice, he would be competent to make assessment of those items. For every new issue coming before the AO 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 u/s 148. The facts and circumstances are exactly identical here that there is no addition on the basis of the complaint received that the turnover of M/s. Saajo and M/s. Savoy Imaging System, the proprietary concern are not disclosed. No addition is made rather from the records the information available was used for making disallowance i.e. ad hoc disallowances expenses namely, advertisement, telephone charges, electricity charges, motor car expenses, travelling expenses and repair and maintenance. Thu, the order of reopening is quashed assessee's appeals, is allowed. - I.T.A Nos. 1666 & 1667/Kol/2012 - - - Dated:- 14-5-2013 - Shri K. K. Gupta, AM And Shri Mahavir Singh, JM,JJ. For the Appellant: Shri Soumitra Chowdhury, Advocate For the Respondent : Shri Dilip Kr. Rakshit, Sr. DR ORDER Per Shri Mahavir Singh, JM:- Both these appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence basis of ca1cu1ation of profit / income from this parlour is not revealed in the returns of income for A.Y.s .05-06 and 06-07. As such allegation that income from this parlour was not disclosed by assessee truly and correctly appears tenable. In view of this, undersigned has reason to believe that income of the assessee has escaped assessment for A.Y 2005-06 2006-07 which requires re-assess u/s.147 of the I.T. Act." 4. The A.O. from the above reasons noted that the income has escaped assessment. Hence, he issued notice u/s. 148 of the Act. In response to notice u/s. 142(1) of the Act Shri Tapan Kr. Chakraborty, Advocate appeared before the AO and filed details. Before CIT(A), assessee challenged reopening of assessments. The assessee claimed that complete details regarding beauty parlour run by assessee in the name of M/s. Saajo and M/s. Savoy Imaging System, 40/1A, Bhupen Bose Avenue, Kolkata-4 is filed by assessee including the P L Account and Balance Sheet. The AO, according to assessee's counsel, has no basis for reopening because he himself was not satisfied for any particular concealment of income. In the reasons recorded, he noted that "she has shown income from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the words used by Parliament, it is clear that upon the formation of a reason to believe under section 147 and following the issuance of a notice under section 148, the Assessing Officer has the power to assess or reassess the income which he has reason to believe had escaped assessment, and also any other income chargeable to tax. The words 'and also' cannot be ignored. The interpretation which the court places on the provision should not result in diluting the effect of these words or rendering any part of the language used by Parliament otiose. Parliament having used the words 'assess or reassess such income and also any other income chargeable to tax which has escaped assessment', the words 'and also' cannot be read as being in the alternative. On the contrary, the correct interpretation would be to regard those words as being conjunctive and cumulative. It is of some significance that Parliament has not used the word 'or'. The Legislature did not rest content by merely using the word 'and'. The words 'and' as well as 'also' have been used together and in conjunction. . . . Evidently, therefore, what Parliament intends by use of the words 'and also' is that the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee 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 fresh notice under section 148 would be necessary, the legality of which would be tested in the event of a challenge by the assessee." We are in complete agreement with the reasoning of the Division Bench of the Bombay High Court in the case of CIT v. Jet Airways (I) Limited [2011] 331 ITR 236 (Bom). We may also note that the heading of section 147 is "income escaping assessment" and that of section 148 "issue of notice where income escaped assessment". Sections148 is supplementary and complimentary to section 147. Sub-section (2) of section 148 mandates reasons for issuance of notice by the Assessing Officer and sub-section (1) thereof mandates service of notice to the assessee before the Assessing Officer proceeds to assess, reassess or recompute the escaped income. Section 147 mandates recording of reasons to believe by the Assessing Officer that the income chargeable to tax has escaped assessment. All these conditions are required to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the judgment of Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd., supra that the reassessment is not permissible wherein items of income said to have escaped assessment on which reassessment proposed not added but other deductions reduced. Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd., supra has held that "Under Explanation 3 if during the course of the proceedings the Assessing Officer comes to the 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. 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." The facts and circumstances are exactly identical here that there is no addition on the basis of the complaint received that the turnover of M/s. Saajo and M/s. Savoy Imaging System, the proprietary concern are not disclosed. No addition qua that is made r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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