TaxTMI 
TaxTMI 
2017 (1) TMI 980
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....147 of the Act." 4. Brief facts are that the assessee's assessments were reopened for the three years in question u/s 147 on the basis of following common reasons:- "In this case, there is information with the department that at Juna Dadar Anand, assessee possesses a shop, Another Shop A/c hall is situated near Indira Statue. He owns Vehicles, godowns and other assets. Therefore, it is believed that the income chargeable to tax has escaped assessment within the meaning of Sec. 147 of IT Act. I am satisfied that this is fit case for issuance of notice u/s 148 of the Act." 4.1 During the course of reassessment, the assessee contended that... (i) The assessee is a Kachcha Aaratia in Banana and, on traditional lines, the business has been conducted as per past years; (ii) The assessee receives only commission for facilitating the sale of this agricultural produce between farmers and the ultimate buyers; (iii) The value of goods purchased from various farmers for his principals and value of such banana mentioned in memo prepared and given to principal is same and equal and the assessee was charging separately the amount of commission in each bill. This establishes that the ass....
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....recorded above in the assessment order u/s 143(3) rws 147 of the IT Act. The issues discussed and the addition made by the AO in such order u/s 143(3) rws 147 of the Act are different from the reasons which were recorded by him and in view of which the assessment in question was reopened by him. The AO has finally made the addition of Rs. 7,49,480/- by estimating the net profit of the appellant @ 5% on the basis that he is a Pacca arhatia and he was supposed to maintain all the books of accounts as applicable for purchase and sales of books and also he was supposed to get his books of accounts audited. Thus the reasons recorded for reopening the case and the basis on which the addition was made are different and therefore the entire assessment u/s 143(3) rws 147 for the year under consideration is void ab initio in view of following decisions of Hon'ble courts. 1. CIT Vs. Jet Airways (I) Ltd., 331 ITR 236 (Bom.) 2. Ranbaxy Laboratories Ltd. Vs. CIT, 60 DTR 77 (Del.) 3. CIT Vs. Major Deepak Mehta-In ITA No.04 of 2006 (Chhatisgarh) 10. The above three High Courts namely Bombay High Court, Delhi High Court and MP High-Court have held that if after issuing notice u/s 14....
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....have to now consider is whether 'and also' would be conjunctive, or the second part has to be treated as independent of the first part. If we treat it as conjunctive, then certainly if the reason to believe is there for a particular ground or issue with regard to escaped income which has to be assessed or reassessed, and such ground is not found or does not survive, then the assessment or reassessment of 'any other income' which is chargeable to tax and has escaped assessment, cannot be made. 25. Chapter XIV of the Act deals with the 'Procedure for Assessment'. It provides for filing of Return of Income (s.139), Self Assessment (s.140 A), Assessment (s.143), Best Judgment Assessment (s.144) and also for Income Escaping Assessment (s.147). The purpose of these provisions is to bring to tax the entire taxable income of the assessee and in doing so, where the Assessing Officer has reason to believe that some income chargeable to tax has escaped assessment, he may assess or reassess such income. Since the purpose is to tax all such income which has escaped assessment, in our view, besides 'such income' for which he has reason to believe to have escaped....
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....has also held as under:- "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 and its Explanation 3. This Explanation has been inserted only to clarify the main section and not curtail its scope. Insertion of Explanation 3 is thus clarificatory and is for the benefit of the Revenue and not the assessee. If there is ambiguity in the main provision of the enactment, it can be clarified by insertion of an Explanation to the said section of the Act. Same has been done in the present case. Section 147 of the Act was interpreted differently by different High Courts, i.e., whether the second part of the section was independent of the first part,....