9911796707
TMI Blog2024 (2) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Bhatia, learned counsel appearing in support of the appeal, we find that the Income Tax Appellate Tribunal ["ITAT"] has while considering the issue of re-opening under Section 147 of the Income Tax Act, 1961 ["Act"] returned the following findings: "7. Upon careful consideration, we note that assessee's case was reopened on the basis of information relating to accommodation entry received from TVH Trading Company Pvt. Ltd. of Rs.26,40,00,000/-. No addition was made in the assessment order on this amount since the amount had already been added in the order u/s 153A dated 30.03.2014. In addition, of Rs.58,18,50,000/- was made u/s 68 of the Act in respect of the amount received from 5 persons which did not form part of the reasons recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148." 5. Our attention was also drawn to the order dated 22 January 2018 passed in ITA 727 of 2017 whereby, while dealing with the impact of that Explanation, the Court had observed as follows: "The Court notices that GKN Driveshafts (supra) has not been assimilated through statute. This aspect is important because in the absence of a consequence spelt out either by statute or through judgment, it cannot be said that invariably every assessee would suffer the same amount of prejudice as to nullify or invalidate the entire assessment proceedings; much will depend on the circumstances of the case. In the present case, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the judgment of the Bombay High Court in Commissioner of Income-Tax vs. Jet Airways (I) Ltd., (2011) 331 ITR 236 which was followed in Ranbaxy Laboratories Limited vs. Commissioner of Income Tax, (2011) 336 ITR 136 DLI and Commissioner of Income Tax (Exemption) vs. Monarch Educational Society, (2016) 387 ITR 416 (Delhi). In the case of Jet Airways (supra) the Bombay High Court first enunciated the rule that if reassessment proceedings do not culminate in an order that adds the amounts relatable to the reassessment notice, and rather adds amounts on other issues, the reassessment orders would be invalid. The Court emphasised the expression "and also" in Section 147 of the Act. The decision in the case of Ranbaxy Laboratories (supra) quoted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tood and read handin-hand with the Explanation, which is only to support the main provision, like an example does to explain any situation. 40. In the present case, insertion of Explanation 3 to section 147 does not in any manner override the main section and has been added with no other purpose than to explain or clarify the main section so as to also bring in 'any other income' (of the second part of section 147) within the ambit of tax, which may have escaped assessment, and comes to the notice of the Assessing Officer subsequently during the course of the proceedings. Circular 5 of 2010 issued by the CBDT (already reproduced above) also makes this position clear. In our view, there is no conflict between the main section 147 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken by the Punjab & Haryana High Court in the cases of Majinder Singh Kang and Mehak Finvest (supra ). 42. Considering the provision of section 147 as well as its Explanation 3, and also keeping in view that section 147 is for the benefit of the Revenue and not the assessee and is aimed at garnering the escaped income of the assessee [viz. Sun Engg.(supra )] and also keeping in view that it is the constitutional obligation of every assessee to disclose his total income on which it is to pay tax, we are of the clear opinion that the two parts of section 147 (one relating to 'such income' and the other to 'any other income') are to be read independently. The phrase 'such income' used in the first part of section 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to the facts, this Court is of the opinion that since there is some doubt as to the accuracy of the interpretation in the case of Ranbaxy Laboratories Limited (supra) and which was subsequently followed in the case of Monarch Educational Society (supra), the appropriate course would be to refer the issue to a larger Bench. The following issue is accordingly framed for reference to the Full Bench i.e. whether the view expressed in the case of Ranbaxy Laboratories Limited (supra) [following Jet Airways's case (supra) of the Bombay High Court and followed later in Monarch Educational Society's case (supra)] with respect to the interpretation of Section 147 read with Explanation (3) of the Act, is restrictive, so as to sustain only additio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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