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TMI Blog2019 (8) TMI 1266X X X X Extracts X X X X X X X X Extracts X X X X ..... 80IC and consequently thereafter the income was assessed at the same sum as originally returned by the appellant. Subsequent thereto, the case of the appellant was reopened u/s 147 vide notice dated 31.03.2015. The reasons provided by the AO for reopening of the assessment was that he was in receipt of information from the Investigating Wing at Delhi regarding some transactions of the appellant with M/s Bhola Motors Pvt Ltd. In the course of re-assessment proceedings, the AO made independent enquiries from M/s Bhola Motors Pvt Ltd and found that there were no discrepancies in the transactions between the appellant and M/s Bhola Motors Pvt Ltd. The AO accordingly re-assessed the income vide order dated 09.02.2016 at the same sum i.e. Rs. 3,51,57,010/- as earlier assessed u/s 143(1)/154 of the Act. . Thereafter the Ld. Pr. CIT invoked section 263 of the Act and show caused the assessee vide notice dated 02.02.2018as follows: (i) As per Section 92E of the I.T. Act, 1961, the audit report is required to be furnished by the due date of 30th September of that assessment year but the e-return filed by the assessee company on 12.02.2008 was a belated return. Hence the deduction u/s 80-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court in the case of CIT Vs Alagendran Finance Ltd (162 Taxman 465). 5. The Ld. AR alternatively contended that the reassessment order dated 09.02.2016 of the AO could not otherwise be regarded as erroneous and prejudicial to the interests of the Revenue since no addition was made on account of the reasons for which the assessment was reopened. Referring to the decisions of the Hon'ble High Courts at Delhi, Bombay and Calcutta the Ld AR of the appellant contended that when the AO did not make any addition on the issue for which he exercised reopening jurisdiction u/s 148 then he could not have proceeded with "other additions" for which no reasons were recorded. As a corollary what the AO could not have done directly while framing the assessment u/s 147, the ld. Pr. CIT could not have done it indirectly by exercising revisionary jurisdiction on "other issues" u/s 263 of the Act. - CIT Vs Infinity Infotech Parks Ltd (GA No. 1736 of 2014) (Cal HC) - CIT Vs Software Consultants (341 ITR 240) (Del HC) - Ranbaxy Laboratories Ltd Vs CIT (336 ITR 136) (Del HC) - CIT Vs Jet Airways (331 ITR 236) (Bom HC) 6. The Ld. AR further argued that in the show cause notice as well as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the date of the original assessment order and not the subsequent re-assessment order passed u/s 147 of the Act. To buttress his contention, the ld. CIT, DR relied on the decision of this Tribunal in the case of Vijay Kr. Gupta Vs CIT (142 TTJ 650). 8. The Ld. Pr. CIT, DR further submitted that the AO was empowered to make additions on all other issues apart from which the assessment is sought to be reopened in light of Explanation 3 to Section 147 of the Act. According to him therefore even the appellant's alternative plea did not hold any ground. To support his argument, he relied on the decision of the Hon'ble Delhi High Court in the case of Pr.CIT Vs Jakhotia Plastics Pvt Ltd (94 taxmann.com 89). As regards the merits of the case, he supported the order of the ld. Pr.CIT that the claim u/s 80-IC could not have been possibly made in a belated return of income. He therefore supported the order of the ld. Pr.CIT setting aside the assessment order back to the AO for his failure to make any enquiry on this issue. 9. We have carefully considered the submissions of the appellant and perused the material on record. The primary issue to be adjudicated in the present appeal is wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 80IC of the Act. Having consciously applied his mind, the AO disallowed such claim and thereby in the intimation issued u/s 143(1), the income assessed was Rs. 7,19,96,170/- which was arrived after the disallowance of the claim u/s 80-IC of the Act. Thereafter, acting upon the petition u/s 154, the AO passed a speaking order dated 19.04.2010 in which the appellant's claim for deduction u/s 80-IC was allowed. We therefore find that on two separate occasions the AO had consciously applied his mind and followed the courses permissible in law with regard to allowability of appellant's claim for deduction u/s 80-IC of the Act. In the facts involved in the present case therefore it cannot be said that the before passing of either of the orders dated 30.11.2009& 19.04.2010, the AO had not applied his mind to the facts governing the deduction claimed u/s 80-IC. In our considered opinion, the AO having considered the facts had made conscious decisions first to disallow and then to allow the deduction u/s 80IC of the Act. It may be so that on the merits the ld. Pr. CIT being the supervisory authority of the AO did not agree with the decision taken by his subordinate authority i.e. the AO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra), in our opinion, has rightly considered the matter albeit under section 17 of the Wealth-tax Act, 1957 which is in parimateria with the provisions of the Act. Relying on Sun Engg. Works (P.) Ltd.'s case (supra), it was held: "Under section 17 of the Wealth-tax Act, 1957, even as it is under section 147 of the Incometax Act, proceedings for reassessment can be initiated when what is assessable to tax has escaped assessment for any assessment year. The power to deal with underassessment and the scope of reassessment proceedings as explained by the Supreme Court in the case of Sun Engg. [1992] 198 ITR 297 , is in relation to that which has escaped assessment, and does not extend to reopening the entire assessment for the purpose of redoing the same de novo. An assessee cannot agitate in any such reassessment proceedings matters forming part of the original assessment which are not required to be dealt with for the purpose of levying tax on that which had escaped tax earlier. Cases of underassessment are also treated as instances of escaped assessment." The order of reassessment is one which deals with the assessment already made in respect of items which are not require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeding u/s 147 with regard to some issue other than the grant of deduction u/s 80-IC of the Act, such fact by itself did not extend the limitation period with regard to such issue. Particularly, in view of the fact that this very issue regarding grant of deduction u/s 80IC was the subject matter of disallowance in the intimation u/s 143(1) which was subsequently deleted by the AO in his order u/s 154 of the Act. If one goes by the ld. CIT's proposition that the grant of deduction u/s 80-IC was erroneous; then it is evident from the facts of the present case that the deduction was consciously allowed by the AO by an order u/s 154/143(1) dated 09.04.2010 and therefore error, if any, had crept in the said order, and not in the latter order u/s 147/143(3) dated 09.02.2016. In view of these peculiar facts, we hold that the decision of this Tribunal in the case of Vijay Kr. Gupta Vs CIT (supra) relied upon by the ld. CIT, DR was factually distinguishable and hence not applicable. Respectfully following the ratio decidendi laid down by the Hon'ble Apex Court in the case of CIT Vs Alagendran Finance Ltd (supra), we therefore hold that the proceedings u/s 263 had become barred on 31.03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed under Section 147/143(3) of the Act it has been held that the respondent assessee had been able to show and establish the genuineness of and capacity to make the said investment. 10. Similar issue had arisen before this Court in Ranbaxy Laboratories Ltd. v. CIT, [2011] 336 ITR 136/ 200 Taxman 242/ 12 Taxmann.com 74 (Delhi). In the said case, the Division Bench had also examined Explanation 3 to Section 147, which was inserted by Finance (No. 2) Act of 2009 with retrospective effect from 1st April, 1989. Reference was made to the decision of the Bombay High Court in CIT v. Jet Airways (I) Ltd., [2011] 331 ITR 236/[2010] 195 Taxman 117 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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". Sections 148 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 be fulfilled to assess or reassess the escaped income chargeable to tax. As per Explanation 3 if during the course of these proceedings the Assessing Officer comes to 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. However, the Legislature could not be presumed to have intended to give blanket powers to the Assessing Officer that on assuming ..... X X X X Extracts X X X X X X X X Extracts X X X X
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