AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 515
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.... order dated 24th May 2023 passed by the Hon'ble Commissioner of Income Tax (Appeals), Pune, in respect of Assessment Year 2015-16. The company, due to unforeseen circumstances, was unable to file the appeal within the prescribed time of 60 days from the date of receipt of the order, resulting in a delay of approximately 555 days in filing the appeal. I have been using services of email accounts [email protected] & rajesh.baheti@lorgan group.com. The services of these email accounts were stopped by the service provider. Hence, the appellant company has not received any notices Regarding the proceedings before the Commissioner of Income Tax, Appeals. The appellant company has been facing prolonged financial difficulties as their bank accounts are freezed for operations. Further, the company has borrowed money for business from Axis Bank Ltd. and the account has become non-performing asset (NPA) 1 due to sudden stoppage of the business. Owing to these financial difficulties, the company does not have any administrative team who can keep a track of the status of the appeal filed by it. The Appellant company came to know about the order passed by....
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....er passed by Ld. AO u/s 143(3) r.w.s.147 of the Act, since no addition on account of reasons to believe for re-opening of assessment was made but disallowance of bad debts was made which was not a part of reasons to believe, thereby, violated the ratio laid down by the jurisdictional Bombay High Court in the case of CIT Vs Jet Airways (I) Ltd [2011) 331 ITR 236 (Bom.) and, therefore the impugned reassessment order is bad-in-law and hence, may please be quashed." 4.2 For admission of above Additional Ground, assessee placed reliance on the following decisions: i. Ahmedabad Electricity Company Ltd. Vs. CIT (1993) 199 ITR 351 (RB) ii. Jute Corporation of India Ltd. Vs. CIT (1990) 53 taxman 85 iii. National Thermal Power Company Ltd. Vs. CIT (1998) 299 ITR 383 (SC) 5. Brief facts of the case are that the assessee is a Limited Company engaged in the business of Marketing of goods. Ld. Assessing Officer based on his observation that the assessee has not filed the return and that substantial cash has been deposited in the bank account and purchased more than one vehicle and interest received as per Form No.26AS, invoked section 147 of the Act and issued no....
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....as per Form No.26AS. However, no addition out of the reasons to believe of escapement of income has been made but addition has been made on the other issue without issuing any fresh notice u/s. 148 of the Act. 8. Ld. Departmental Representative vehemently argued supporting the order of ld.CIT(A) but failed to controvert the contentions made by ld. Counsel for the assessee by filing any binding precedents in its favour. 9. We have heard the rival contentions and perused the record placed before us. The main contention of ld. Counsel for the assessee is that ld. AO has not made addition for the reasons mentioned in the reasons recorded for reopening the assessment proceedings. By way of legal issue raised in the additional ground, validity of re-assessment proceedings have been challenged. In light of the judgment of Hon'ble Apex Court in the case of National Thermal Power Company Ltd. Vs. CIT (supra), we admit this legal issue. From the record, we observe that the assessee is a Limited Company. Ld. AO based on the information about substantial cash deposit in the bank account of the assessee company, purchase of more than one vehicle and interest income as per Form No.26AS and....
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....y the insertion of Explanation 3 to Section 147 by Finance (No. 2) Act of 2009 The effect of the Explanation is that once an Assessing Officer has formed a reason to believe that income chargeable to tax has escaped assessment and has proceeded to issue a notice u/s 148, it is open to him to assess or reassess income in respect of any other issue though the reasons for such issue had not been included in the reasons recorded u/s 148(2). 14. The second line of precedent is reflected in a judgment of the Rajasthan High Court in Commissioner of Income Tax v. Shri Ram Singh (2008) 306 ITR 343 (Raj). 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'' u/s 147. The Rajasthan High Court held as follows. .... it is only when, in proceedings u/s 147 the Assessing Officer, assesses or reassesses any income chargeable to tax which has escaped assessment for any assessment year, with respect to which....
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....of the Punjab & Haryana High Court in Commissioner of Income Tax Vs. Atlas Cycle Industries,. The decision in Atlas Cycle Industries held that the Assessing Officer did not have jurisdiction to proceed with the reassessment, once he found that the two grounds mentioned in the notice u/s 148 were incorrect or non existent. The decisions of the Punjab & Haryana High Court in Atlas Cycle Industries (supra) and of the Rajasthan High Court in Shri Ram Singh (supra) 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 of reassessment on grounds other than those on the basis of Which a notice was issued u/s 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....
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....e of its legislative powers to do so, the provisions of Section 147(1) as they stood after the amendment of 1 April 1989 continue to hold the field. 18. In that view of the matter and for the reasons that we have indicated, we do not regard the decision of the Tribunal in the present case as being in error. The question of law shall accordingly stand answered against the Revenue and in favour of the assessee. The appeal is accordingly dismissed. There shall be no order as to costs." 11. Similar issue has also been dealt recently by this Tribunal in the case of Rajya Rakhiv Police Karmachari Sahakari Patsanstha Maryaditand Vs. ITO in ITA No.171/Un/2025 order dated, 16.06.2025. Relevant finding of this Tribunal reads as under : "8. We have heard the rival contentions and perused the record placed before us. So far as the legal issue raised vide Ground No.1 in the grounds of appeal is concerned, we find that the reason for carrying out the re-assessment proceedings was regarding explanation about the source of cash deposit of Rs. 35,00,821/-. It is noticed that assessee neither had PAN nor has filed any return of income for the year under consideration. It was onl....