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TMI Blog2024 (9) TMI 1711X X X X Extracts X X X X X X X X Extracts X X X X ..... to items which had been mentioned or taken note of by the AO while forming the opinion that income had escaped assessment. Ranbaxy had principally held that unless additions are made on that score, no further additions would be sustained. As decided in ATS Infrastructure Limited [2024 (7) TMI 1441 - DELHI HIGH COURT] enunciation with respect to the indelible connection between Section 148A(b) and Section 148 A(d) are clearly not impacted by Explanation 3. As we read Sections 147 and 148, we come to the firm conclusion that the subject of validity of initiation of reassessment would have to be independently evaluated and cannot be confused with the power that could ultimately be available in the hands of the AO and which could be invoked on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case in not appreciating Explanation 3 of Section 147 of the Income Tax Act, 1961 and whether the same would empower the Assessing Officer to assess or reassess income in respect of any issue which has escaped assessment notwithstanding the reasons recorded under sub-section (2) of Section 148 having not alluded to the same or formed the basis for reopening?" 2. The issue itself had arisen in the context of the Assessing Officer ["AO"] having not made any additions in respect of issues which formed subject matter of the notices under Section 147/148 of the Income Tax Act, 1961 ["Act"]. This led to the matter being examined by the Principal Commissioner under Section 263 of the Act and which authority took the view that the hands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her income which may be found to be exigible to tax. 24. This clearly appeals to reason, since Section 147 of the Act embodies a power to assess, reassess as well also to recompute. Consequently, and once that power is validly invoked, the original assessment would cease to exist in the eyes of law. Undoubtedly, once an assessment already made comes to be reopened, the AO stands empowered statutorily to undertake an assessment afresh in respect of the entire income which may have escaped assessment. However, the only additional caveat which Ranbaxy Laboratories Ltd. enters is with respect to a situation where, in the course of reassessment, the AO ultimately comes to the conclusion that no additions or variations were warranted in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the Court in Principal Commissioner of Income Tax v. Jakhotia Plastics Pvt. Ltd. The Court in Jakhotia Plastics had expressed certain reservations with respect to what it viewed as undue importance having been placed by the Bombay High Court on the words "and also" in Jet Airways (I) Ltd. 28. In light of the above, the Court in Jakhotia Plastics had observed that since there was some doubt as to the accuracy of the interpretation accorded in Ranbaxy Laboratories Ltd., it would be appropriate for the matter being placed for the consideration of a larger Bench. This becomes evident from a reading of paragraphs 13, 14 and 15 of the report and which are extracted hereinbelow:- xxxx xxxx xxxx 29. In our considered opinion, and beari ..... X X X X Extracts X X X X X X X X Extracts X X X X
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