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TMI Blog2021 (7) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 147 for escapement of income, therefore, the addition made by the A.O does not survive being not in accordance with Law. The Order of the Ld. CIT(A) is accordingly set aside, and the A.O. is directed to delete the addition - Decided in favour of assessee. - ITA No. 3068/Del./2017 - - - Dated:- 24-6-2021 - R. K. Panda, Member (A) And Sudhanshu Srivastava, Member (J) For the Appellant : Mahavir Singh, CA For the Respondents : Anima, Sr. D.R. ORDER Per R. K. Panda, AM This appeal filed by the Assessee is directed against the Order dated 22.03.2017 of the Ld. CIT(A)-1, Gurgaon, relevant to the A.Y. 2008-2009. 2. Facts of the case, in brief, are that the assessee is an individual and filed his return of income declaring total income of ₹ 12,78,494/-. Subsequently, on the basis of the information received from the Deputy Director of Income Tax (Inv.), Unit-(1), Gurgaon, vide letter No. 1796 Dated 19.03.2014 that the assessee has purchased insurance policy for ₹ 1.05 crores and surrendered the policy within 03 years, the A.O. after recording the following reasons reopened the assessment under section 147 of the I.T. Act. Annexure Reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreed to return the amount with a condition that they will transfer the amount in assessee's account if Vikram Electrics Equipment Pvt. Ltd. withdraws the case. The land owners transferred ₹ 6,60,93,750/- in assessee's account on 22.11.2007 vide cheque No. 266375. The assessee thereafter transferred ₹ 3,60,93,750/- on 22.11.2007 vide cheque No. 271266 from Gurgaon Gramin Bank to M/s. Vikram Electric Equipment Pvt. Ltd. immediately after he received the funds and the remaining amount paid by the assessee later on during the year once all the cases were resolved. In support, the assessee has also filed copy of FIR and both the above cheques and Mukhitarnama Khas regarding the receipt of the amount of ₹ 6,60,93,750/-. For filing the other copy of the court order and the receipt for the balance payment, the assessee required some time. However, the A.O. did not grant any time because of the assessment getting time barred. In the absence of any documentary evidence regarding the payment of ₹ 3,00,00,000/- (66093750-36093750), the A.O. held the same to be unexplained and accordingly, made addition of ₹ 3,00,00,000/- to the total income of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 3,60,93,750/- to M/s. Vikram Electrical Pvt. Ltd. and the remaining amount of ₹ 3 crore was still lying with the appellant on 22.11.2007 i.e. the date on which the appellant had received the amount of ₹ 6,60,93,750/- and had transferred the amount of ₹ 3,60,93,750/- to M/s. Vikram Electrical Pvt. Ltd. The appellant has contended that the remaining amount was also paid on behalf of M/s. Vikram Electrical Pvt. Ltd. to Sh. Rakesh Kumar (₹ 2,30,00,000/-) and on account of stamp duty on behalf of M/s. N. R Buildcon (₹ 70,00,000/-) which was otherwise to be paid by M/s. Vikram Electrical Pvt. Ltd. The appellant has however not been able to give any supporting evidence in this regard. As mentioned above, M/s. Vikram Electrical Pvt. Ltd. has denied having received the amount of ₹ 3 crores from the appellant. In these circumstances the claim of the appellant with regard to the payment of ₹ 3 crores on behalf of M/s. Vikram Electrical Pvt. Ltd. to Sh. Rakesh Kumar and on account of stamp duty is a mere self-serving statement. 3.10. It may be relevant to mention here that as per the documents filed by the appellant during the course of app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int commissioner of Income Tax Range-ii Gurgaon has been granted in a mechanical fashion without analysing the reasons recorded by the Ld. A.O. and notice issued in lieu of such permission is void in law. 3.2. The Learned Counsel for the Assessee referring to the decisions of Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. vs., CIT reported in [1998] 229 ITR 383 (SC) and in the case of Jute Corporation of India Ltd., vs., CIT reported in [1991] 187 ITR 688 (SC) and various other decisions submitted that all the material facts are already available on record and no new facts are required to be investigated. The additional grounds being legal in nature and go to the root of the matter and, therefore, these additional grounds should be admitted for adjudication. 4. After hearing both the sides and considering the fact that the additional grounds raised by the assessee are purely legal in nature and no new facts are required to be investigated and these grounds go to the root of the matter, therefore, the additional grounds raised by the assessee are admitted for adjudication. 5. Learned Counsel for the Assessee at the outset referring to the copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aragraph. It is the submission of the Learned Counsel for the Assessee that when the A.O. has not made any addition on the issues for which the case of the assessee was reopened, he cannot make any other addition without issuing fresh notice under section 148 after recording escapement of income and, therefore, the entire re-assessment proceedings are vitiated. 7.1. We find merit in the above arguments of the Learned Counsel for the Assessee. It is an admitted fact that the A.O. has not made any addition on account of the reasons for which the case of the assessee was reopened but has made certain other additions. We find the Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd., (supra) has held that the A.O. had jurisdiction to re-assess the issues other than the issues in respect of which proceedings are initiated, but, he was not so justified when the reasons for the initiation of those proceedings ceased to survive. The relevant observations of the Hon'ble Delhi High Court from para-12 to 22 reads as under: 12. The submission of learned counsel for the Revenue was that when reassessment is reopened by issuance of notice under Section 148, the previo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to vest him with the jurisdiction, to subject to tax, any other income, chargeable to tax, which the Assessing Officer may find to have escaped assessment, and which may come to his notice subsequently, in the course of proceedings under Section 147. 14. The Bombay High Court also discussed the case of Jaganmohan Rao (supra) and Sun Engineering (supra) of the Apex Court. In the case of Sun Engineering (supra) the issue before the Supreme Court was whether in the course of reassessment on an escaped item of income could an assessee seek a review in respect of an item which stood concluded in the original order of assessment. The Supreme Court dealt with the provisions of Section 147, as they stood prior to the amendment on 1st April, 1989. In this context, the Supreme Court held that the expression escaped assessment includes both non-assessment as well as under-assessment . The expression assess was defined as referring to a situation where the assessment is made for the first time under Section 147, whereas reassess as referring to a situation where the assessment has already been made, but the Assessing Officer has reason to believe that there is under assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssess jurisdiction, to put to tax, any other income which subsequently came to his notice, in the course of the proceedings, which were found by him, to have escaped assessment. 17. Now, coming back to the interpretation which was given by the Bombay High Court to Sections 147 and 148 in view of the precedent on the subject. The Court held as under:- 11.... Interpreting the provision as it stands and without adding or deducting from the words used by Parliament, it is clear that upon the formation of a reason to believe under Section 147 and following the issuance of a notice under Section 148, the Assessing Officer has the power to assess or reassess the income which he has reason to believe had escaped assessment and also any other income chargeable to tax. The words and also cannot be ignored. The interpretation which the Court places on the provision should not result in diluting the effect of these words or rendering any part of the language used by Parliament otiose. Parliament having used the words assess or reassess such income and also any other income chargeable to tax which has escaped assessment , the words and also cannot be read as being in the alterna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly assess the latter. Section 147 has this effect that the Assessing Officer has to assessee or reassess the income ( such income ) which escaped assessment and which was the basis of the 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 the proceedings However, if after issuing a notice under Section 148, he accepted the contention of the assessee and holds that the income which he has initially formed a reason to believe had escaped assessment, has as a matter of fact not escaped assessment, it is not open to him independently to assess some other income. If he intends to do so, a fresh notice under Section 148 would be necessary, the legality of which would be tested in the event of a challenge by the assessee. 18. We are in complete agreement with the reasoning of the Division Bench of Bombay High Court in the case of Jaganmohan Rao (supra). 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch as per our discussion was not permissible. Had the Assessing Officer proceeded not to make dis-allowance in respect of the items of club fees, gifts and presents, etc., then in view of our discussion as above, he would have been justified as per explanation 3 to reduce the claim of deduction under Section 80 HH and 8-I as well. 21. In view of our above discussions, 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 are initiated but he was not so justified when the reasons for the initiation of those proceedings ceased to survive. Consequently, we answer the first part of question in affirmative in favour of Revenue and the second part of the question against the Revenue. 22. The present appeal is accordingly allowed. 7.2. Since, in the instant case, admittedly no addition has been made on account of the issue for which the case of the assessee was reopened but addition has been made on some other ground without issuing fresh notice under section 148 after recording reasons under section 147 for escapement of income, therefore, the addition made by the A.O. amou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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