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TMI Blog2014 (4) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... to a legally sustainable addition – Decided in favour of Assessee. - ITA No. 74/Agra/ 2013 - - - Dated:- 29-11-2013 - Bhavnesh Saini And Pramod Kumar, JJ. For the Appellant : Roop Kishore Agarwal For the Respondent : K.K. Mishra ORDER:- PER : Pramod Kumar By way of this appeal, the assessee appellant has called into question correctness of learned CIT(A)-1, order dated 28th September, 2012, upholding the impugned assessment under Section 143(3) r.w.s. 147 of the Income Tax Act 1961, for the assessment year 2002-03. 2. One of the grievances raised by the assessee before us is against validity of reassessment proceedings on the facts and in the circumstances of this case. While grounds of appeal as set out in the memorandum of appeal do not specifically raise the controversy whether impugned assessment can be said to be legally valid even when the main addition, relatable to the reasons recorded for initiation of reassessment proceedings, itself is deleted by the CIT(A) and the revenue is not in appeal against such an action of CIT(A), learned representatives have been heard on this aspect of the matter and we proceed to deal with the issue, as a prelim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -totalling to Rs.7,96,548/- as declared in the return of income. and that Therefore, I delete the addition of Rs.3,98,950/- out of the total amount of additions of Rs.11,95,498/- made by the AO in the assessment order . Revenue is not aggrieved of the relief so granted by the CIT(A) on merits, yet learned Departmental Representative defends the validity of reassessment proceedings. 5. During the course of hearing, it was put to the parties that there seems to be an inherent fallacy in the approach of the revenue authorities inasmuch as once the related quantum addition, i.e. addition made as a result of the reasons recorded for initiating reassessment proceedings, itself is held to be unsustainable in law, and the revenue authorities are not aggrieved of such a relief, there should not be any justification for their defence of the initiation of reassessment proceedings. It is so for the reason that incorrectness of such addition having been accepted, the very foundations of impugned reassessment ceases to hold good in law. The above proposition was put to be learned representatives and we have heard them on the same. 6. Let us deal with this aspect of the matter first, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The Shorter Oxford Dictionary defines the expression also to mean 'further, in addition, besides, too'. The word has been treated as being relative and conjunctive. Evidently, therefore, what Parliament intends by use of the words and also is that the Assessing Officer, upon the formation of a reason to believe under section 147 and the issuance of a notice under section 148(2) must assess or reassess: (i) 'such income'; and also (ii) any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under the section. The words 'such income' refer to the income chargeable to tax which has escaped assessment and in respect of which the Assessing Officer has formed a reason to believe that it has escaped assessment. Hence, the language which has been used by Parliament is indicative of the position that the assessment or reassessment must be in respect of the income in respect of which he has formed a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by him while reopening the assessment. The common thread in both these situations is that the Assessing Officer accepts the situation that based on the reasons recorded, while reopening the assessment, legally sustainable additions cannot be made or deletion of such additions cannot be challenged. Once he accepts such a position, whether at the stage of assessment by not making the related addition, or at a later stage by not challenging CIT(A)'s order deleting such an addition, the reassessment proceedings are rendered infructuous because no other additions, even if any, made by the Assessing Officer can survive the legal scrutiny. It is also important to bear in mind that while deleting the addition before us, as we have seen earlier in this order, learned CIT(A) has given categorical findings which run contrary to the reasons recorded while reopening the assessment and yet the revenue authorities have not raised, either in appeal or by any other mode, even a whisper against such findings which have thus reached finality. While on this issue, it is also important to note that, as is the settled legal position, the reasons recorded for reopening the assessment are to be rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso well-settled that the reasons for reopening are required to be recorded by the assessing authority before issuing any notice under s. 148 by virtue of the provisions of s. 148(2) at the relevant time. Only the reasons so recorded can be looked at for sustaining or setting aside a notice issued under s. 148. In the case of Equitable Investment Co. (P) Ltd. vs. ITO (1988) 73 CTR (Cal) 236 : (1988) 174 ITR 714 (Cal), a Division Bench of the Calcutta High Court has held that where a notice issued under s. 148 of the IT Act, 1961, after obtaining the sanction of the CIT is challenged, the only document to be looked into for determining the validity of the notice is the report on the basis of which the sanction of the CIT has been obtained. The IT Department cannot rely on any other material apart from the report. 11. The same principle was reiterated in a judgment of the Division Bench of this Court in Hindustan Lever Ltd. v. R.B. Wadkar 268 ITR 332: ..the reasons are required to be read as they were recorded by the AO. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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