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TMI Blog2022 (11) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... e commission and brokerage and commission income. On going through the P&L A/C, it is observed that total receipts shown in the P&LA/c of Rs.5,79,039/- only and claimed credit for TDS. The assessee has under stated the receipts as reflected in the 26AS report. 3. In the case of assessee there was information received from the Pr. Director of Income-tax (Investigation), Kolkata vide letter dated 30.6.2019 and conveyed that credible information was received that Mr. Sunil Shaw, M Sailesh Kumar Singh, Mr. Ramu Saha, Mr. Gautam Saha and Mr. Madhusudhan Saha maintain various current account in the name of different firms/concerns/companies. They have declared trading as business activity. There were high value cash deposits in these accounts and the proceeds were immediately withdrawn in cash from ATMs, cheque issuance, fund transfer, RTGS. The case has been investigated by DDIT (Inv.) Unit 3(1), Kolkata and the list containing the beneficiaries was also encoded, wherein assessee's name appears at Sr. No for Rs 45,00,000/- transaction with SKYLARK LOGISTICS AGENCIES PVT LTD., INDUSIND A/C-0305-JG036 050/200011924533 PERIOD-01/07/2011 TO 01/2/2016." 3. The case of the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice 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 alternative. On the contrary, the correct interpretation would be to regard those words as being conjunctive and cumulative. It is of some significance that Parliament 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the escaped income?" The issue which arose before the Supreme Court was whether, in the course of a 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 1-4-1989. The Supreme Court held that the expression "escaped assessment" includes both "non-assessment" as well as "under assessment". Income is said to have escaped assessment within the meaning of the section when it has not been charged in the hands of an assessee during the relevant assessment year. The expression "assess" refers to a situation where the assessment of the assessee for a particular year is, for the first time, made by resorting to the provisions of section 147. The expression "reassess" refers to a situation where an assessment has already been made but the Assessing Officer has reason to believe that there is under assessment on account of the existence of any of the grounds contemplated by Explanation 1 to section 147. The Supreme Court adverted to the Judgment in V. Jaganmohan Rao v. CIT [1970] 75 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T v. Shri Ram Singh [2008] 306 ITR 343 . The Rajasthan High Court construed the words used by Parliament in section 147 particularly the words that the Assessing Officer 'may assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings' under section 147. The Rajasthan High Court held as follows : ". . . if is only when, in proceedings under section 147 the Assessing Officer, assesses or reassesses any income chargeable to tax, which has escaped assessment for any assessment year, with respect to which he had "reason to believe" to be so, then, only in addition, he can also put to tax, the other income, chargeable to tax, which has escaped assessment, and which has come to his notice subsequently, in the course of proceedings under section 147. To clarify it further, or to put it in other words, in our opinion, if in the course of proceedings under section 147, the Assessing Officer were to come to the conclusion, that any income chargeable to tax, which, according to his "reason to believe", had escaped assessment for any assessment year, did not escap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) would not be affected by the amendment brought in by the insertion of Explanation 3 to section 147.- 16.Explanation 3 lifts the embargo, which was inserted by judicial interpretation, on the making of an assessment or reassessment on grounds other than those on the basis of which a notice was issued under section 148 setting out the reasons for the belief that income had escaped assessment. Those judicial decisions had held that when the assessment was sought to be reopened on the ground that income had escaped assessment on a certain issue, the Assessing Officer could not make an assessment or reassessment on another issue which came to his notice during the proceedings. This interpretation will no longer hold the field after the insertion of Explanation 3 by the Finance Act (No. 2) of 2009. However, Explanation 3 does not and cannot override the necessity of fulfilling the conditions set out in the substantive part of section 147. An Explanation to a statutory provision is intended to explain its contents and cannot be construed to override it or render the substance and core nugatory. Section 147 has this effect that the Assessing Officer has to assess or reassess the income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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