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TMI Blog2013 (6) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Rs. 16,73,26,015/- as against the returned income of Rs. 16,67,22,015/-. Scrutiny of income tax assessment records revealed that in the computation of income the assessee had deducted Rs. 1,87,41,755/- on account of provision for doubtful debts no longer required written back but in P&L account this amount was not added to the other income. The mistake resulted in under assessment of income by Rs. 1,87,41,755/- involving tax effect of Rs. 63,08,473/-. 02. In view of the above, I have reasons to believe that the income of Rs. 1,87,41,755/- chargeable to tax has escaped assessment within the meaning of section 147/148 of the Income Tax Act, 1961." 3. From the above extract, it is evident that the purported reasons pertain to the issue of provision for doubtful debts. The allegation was that the assessee had deducted Rs. 1,87,41,755/- on account of the said provision for doubtful debts but in the Profit & Loss Account the said amount had not been added to the taxable income. It was contended that this resulted in under assessment of income by Rs. 1,87,41,755/-, involving a tax liability of Rs. 63,08,473/-. 4. According to the learned counsel for the respondent/assessee, after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings under section 147 of the said Act, deleted the addition in respect of bad debts as also the disallowance under section 14A of the said Act. However, the Commissioner of Income Tax (Appeals) held in favour of the revenue and confirmed the addition on account of the issue with regard to unabsorbed depreciation. 7. Both the revenue and the assessee filed the appeals before the Tribunal being ITA Nos. 4399/Del/2011 and 4406/Del/2011. The revenue was aggrieved by the finding of the Commissioner of Income Tax (Appeals) with regard to the deletion on account of the issue pertaining to bad debts. In so far as, the assessee was concerned, its appeal was directed against the findings of the Commissioner of Income Tax (Appeals) whereby the proceedings under Section 147/148 of the said Act were held to be valid and the revenue's contention with regard to the unabsorbed depreciation had been accepted. 8. The Tribunal, hearing both the appeals, passed a common order disposing of the same by virtue of the impugned order dated 01.08.2012. The Tribunal dismissed the revenue's Appeal with regard to the issue of bad debts and allowed the assessee's appeal on both counts, namely, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n on the basis of the original reasons, no other additions could be made in view of the expression "and also" used in Explanation 3 to Section 147. This was the subject matter of the decision of the Bombay High Court in the case of CIT v. Jet Airways: 331 ITR 236 (Bom). This was followed by this Court in Ranbaxy Laboratories Limited v. CIT: 336 ITR 136 (Delhi) and also in CIT v. Software Consultants: 341 ITR 240 (Delhi). It was also subject matter of a recent decision of this court in the case of CIT v. Cheil Communications India Pvt. Ltd.: ITA No. 578/2012 decided on 17.04.2013. Therefore, no additions in absence of any addition on the issue of bad debts could have been made by the Assessing Officer. 11. Apart from this, we find that the initiation of the proceedings under Section 147 of the said Act were also bad as has been rightly observed by the Tribunal as under:- "14. In the present case, the assessment has been completed u/s 143(3) originally. The details in respect of bad debts were filed and thereafter the assessment was completed. Therefore, it cannot be said that Assessing Officer has not applied his mind. Even otherwise, as we have discussed above in detail, no such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich had not been denied by the Assessing Officer in the original assessment framed on 26.12.2008. In fact, the entire issue of the provision for bad debts was discussed by the Assessing Officer at the time of original assessment and, therefore, the Tribunal was also right in holding that the attempt to re-assess was based on a mere change of opinion. 13. With regard to the additional reasons which were recorded subsequent to the issuance of notice under Section 148 of the said Act, we have already observed that this could not have been done by the Assessing Officer. The validity of the proceedings initiated upon a notice under Section 148 of the said Act would have to be judged from the stand point of the reasons which existed at the point of time when the Section 148 notice was issued. The additional reasons cannot be provided or recorded subsequent to the issuance of notice under Section 148. It is, of course, open to the Assessing Officer, if some other information comes within his knowledge to issue another notice under Section 148 for different reasons. But that is not the case here. On the basis of the very same notice issued under Section 148, the Assessing Officer has rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,115/- involving tax effect of Rs. 1,28,33,604/-. In view of the above, I have reasons to believe that the income of Rs. 6,85,19,358/- and Rs. 3,02,90,115/- aggregating to Rs. 9,88,09,473/- chargeable to tax has escaped assessment within the meaning of section 147/148 of the Income Tax Act, 1961." 15. It will be seen from the above extract that what the Assessing Officer had done was that he had combined the original recorded reasons and the additional reasons and shown it as one set of reasons. There is no document on record which purports to be the reasons wherein the above-extracted three subparagraphs (a), (b) and (c) have been set out together. In fact, the purported recorded reasons dated 19.01.2010 comprise of two paragraphs numbered as "01" and "02". The purported additional reasons also comprise of two paragraphs "01" and "02". It is only in the additional reasons, in paragraph "01" that two sub-paragraphs are referred to as "(a)" and "(b)". It is, therefore, clear that the Assessing Officer has conjured up a different set of reasons by combining the original reasons and the additional reasons allegedly recorded sometime in October 2010. This is impermissible and does no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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