TaxTMI 
TaxTMI 
2017 (9) TMI 465
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....hese appeals arise out of the order passed by the Assessing Officer u/s 147 of the Act and the assessee wishes to raise the following additional ground of appeal which is purely a legal ground and which was not taken inadvertently earlier at the time of filing of this subject appeal: "Under the facts and circumstances of the case, the order passed u/s 147 is illegal and bad in law." 3. It was submitted that in view of the decision of Hon'ble Supreme Court in the case of CIT vs. NTPC Ltd reported in 229 ITR 383, the above said additional ground being a purely legal ground may be admitted for imparting substantial justice to the appellant. 4. Both the parties were heard. After taking into consideration the fact that the above said ad....
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.... itself is null and void. It was further explained that in original proceedings u/s 143(3), AO has verified all the creditors and debtors in evidence to which copy of notice issued by the AO and reply submitted by the assessee was filed. The Ld. CIT(A) however, has not given any finding on this issue. 7. It was further submitted that the AO initiated proceedings u/s 148 to verify certain cash transactions and its disallowability u/s 40A(3) but made the addition made u/s 68 by treating the creditors as unexplained. It is a settled law that if the income, the escapement of which was the basis of the formation of the reason to believe is not assessed or reassessed, it would not be open to the AO to independently assess only that income whic....
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....s 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 wor....
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....e which comes to his notice subsequently during the course of the proceedings as having escaped assessment. If the income, the escapement of which was the basis of the formation of the reason to believe is not assessed or reassessed, it would not be open to the Assessing Officer to independently assess only that income which comes to his notice subsequently in the course of the proceedings under the section as having escaped assessment. If upon the issuance of a notice under section 148(2), the Assessing Officer accepts the objections of the assessee and does not assess or reassess the income which was the basis of the notice, it would not be open to him to assess income under some other issue independently. Parliament when it enacted the p....
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....n 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 escape assessment, then, the mere fact that the Assessing Officer entertained a reason to believe, albeit even a genuine reason to believe, would not continue 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." (Emphasis supplied) 11. In the instant case, the basis for formation of belief that the income has escaped assessment and in respect of whi....