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TMI Blog2019 (11) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... dent addition under section 14A. Thus, both the above decisions clearly apply to the facts and circumstances of the case. There was, thus, no justification for the A.O. to initiate re-assessment proceedings against the assessee. In this view of the matter, reopening of the assessment is invalid and bad in law. Accordingly, set aside the Orders of the authorities below and quash the reopening of the assessment. Resultantly, appeal of Assessee is allowed. In this view of the matter, there is no need to decide the addition under section 14A which is left with academic discussion only. X X X X Extracts X X X X X X X X Extracts X X X X ..... ed its return of income for the assessment year 2009-10. After perusal of the above mentioned information & facts and since the returned was not filed by the assessee, I have reason to believe that an income of at least ₹ 35,00,000/- for A.Y. 2009-10 has escaped from assessment. Approval for initiating proceedings u/s 147 r.w. 149(1)(b) r.w.s. 151 of the Income Tax is requested from Pr.CIT-9, New Delhi for determination of income of the assessee in AY 2009-10. Sd/-Ram Niwas Income Tax Officer, Ward-26(2), New Delhi." 3.1. In these reasons, the A.O. has noted that since assessee has not filed return of income for assessment year under appeal, therefore, he has reason to believe that an income of atleast ₹ 35 lakhs has escap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t make any such addition in the re-assessment order for which reopening have been done. The A.O. in the assessment order has made disallowance under section 14A only. Learned Counsel for the Assessee relied upon Judgment of Hon'ble Bombay High Court in the case of CIT-5, Mumbai vs., Jet Airways (I) Ltd., [2011] 331 ITR 236 (Bom.) in which it was held as under : "Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Nondisclosure of primary facts - Assessment years 1994-95 and 1995-96 - Whether an Explanation to a statutory provision is intended to explain its content and cannot be construed to override it or to render substance and core nugatory - Held, yes - Whether after insertion of Explanation 3 to section 147 by Fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke additions on account of these items but instead reduced the deductions under sections 80HH and 80-1. The Commissioner (Appeals) held that in the original assessment the powers of the Assessing Officer were limited to the extent of prima facie adjustment only. On the merits of the additions, the Commissioner (Appeals) followed his order of assessment year 1996-97. On appeal the Tribunal held that the assumption of jurisdiction by initiating reassessment proceedings was valid and reassessment could not be annulled. It was a separate issue that after validly assuming jurisdiction the points on which reassessment was proposed were not added/disallowed. At the same time under section 147 the Assessing Officer could also assess such income whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , he found the deduction under sections 80HH and 80-I as claimed by the assessee to be not admissible. He consequently proceeded to make deductions under sections 80HH and 80-I and accordingly reduced the claim on these accounts. The very basis of initiation of proceedings for which reasons to believe were recorded was income escaping assessment in respect of items of club fees, gifts and presents etc., but while these items were not disturbed, the Assessing Officer proceeded to reduce the claim of deduction under sections 80HH and 80-I which was not permissible. The Tribunal was right in holding that the Assessing Officer had the jurisdiction to reassess issues other than the issues in respect of which proceedings were initiated but he was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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