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TMI Blog2021 (2) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... two appeals are identical and facts and circumstances are also common. In view of the submissions of the Ld. DR, these cases were heard together and disposed of vide this consolidated order. 3. The brief facts of the case are that the assessee trust constituted as a public trust under the Bombay Public Trusts Act, 1950, is a charitable institution registered u/s.12A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') dated 06.12.2006 and u/s.80G of the Act dated 06.12.2006. The trust established with the predominant object of establishing and running educational institutions etc. The assessee trust had filed return of income on 03.11.2008 declaring Nil income. The return was accompanied with computation, audit report, audite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment within the meaning of section 147. 3. Issue notice under section 148." 4. It was contended by the assessee that the Assessing Officer made addition of Rs. 1,83,74,601/- by invoking the provisions of Section 115BBC of the Act. The case was reopened under the provisions of Section 147 of the Act by issuing notice u/s.148 of the Act. That it is evident from the reasons for reopening that during the course of enquiry in connection with the application made by the assessee for aid from Islamic Development Bank, Jeddah, the Assessing Officer was of the opinion that there was violation of Section 11 of the Act since the assessee trust had spent less than 85% of its income on the objects of the trust. That from such reasons, it was cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with ITA(L) No.1526 of 2008 dated 12.04.2010. In this case, the issue before the Hon'ble High Court was that in a case which has been reopened u/s.147 of the Act and the Assessing Officer does not assess or reassess the income in respect of which the Assessing Officer had reason to believe that income had escaped assessment and formed the basis for issue of notice u/s.148 of the Act, then is it open to the Assessing Officer to assess or reassess independently any other income which does not form the subject matter of such notice? The Hon'ble High Court upheld the contention of the assessee that the words "and also" appearing in Section 147 signifies that the Assessing Officer may assess or reassess such income which forms the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the assessee had not applied its income towards the objects of the trust which left it with a surplus of Rs. 89,88,923/- after taking into consideration the exemption provided u/s.11(1)(a) of the Act. The Assessing Officer was of the opinion that this amount of income had escaped taxation within the meaning of Section of 147 of the Act and therefore, he reopened the assessment u/s.148 of the Act. It was observed by the Ld. CIT(Appeals), as evident from records that the assessment order shows no addition has been made on the ground that the assessee had applied less than 85% of the income towards the objects of the trust. Instead, the Assessing Officer has enquired into the donations received by the assessee and as held them to be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome chargeable to tax which may have escaped assessment and which comes to his notice subsequently in the course of the proceedings. 8. Thus, according to this judgment, after insertion of Explanation 3 to Section 147 of the Act by Finance (No.2) Act, 2009 w.e.f. 01.04.1989, Section 147 has an effect that the Assessing Officer has to assess or reassess income which escaped assessment and which was basis of formation of belief and if he does so, he can also assess or reassess any other income which has escaped assessment and which comes to his notice during the course of proceedings. However, if after issuing a notice u/s.148 of the Act, he accepts the contention of the assessee and holds that income for which he has initially formed a reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Jurisdictional High Court in the case of Commissioner of Income Tax-5, Mumbai Vs. Jet Airways (I) Ltd. (supra.), has held that in such event, the Assessing Officer exceeds his jurisdiction and he has to assess or reassess in respect of that subject matter only which formed the subject matter to the reasons for which the notice u/s.147/148 was issued. It is definitely open to the Assessing Officer to assess or reassess any other income which he has reason to believe has escaped assessment but for that purpose, he has to issue separate notice to the assessee u/s.148 of the Act. In present scenario, when specific subject matter reasons recorded and notice issued u/s.147/148 of the Act was with respect to under utilization of income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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