TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1244
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....ny other source of income than agricultural income. Since, the income from agricultural operations is exempt from tax, he was not obliged to file the return of income. The Assessing Officer based on the information that assessee has deposited a sum of Rs.76,00,000/- in Zila Sahkari Bank Ltd., initiated reassessment proceedings in the case of assessee by recording reasons that income to the extent of Rs.76,00,000/- has escaped assessment in the order passed u/s 148A(d) of the Act. Accordingly, notices u/s 148 was issued on 26.03.2022. In response to which assessee filed return of income on 12.04.2022 declaring total income of Rs.10,00,000/- from agriculture activity and claimed the same as exempt from tax. The Assessing Officer passed the re....
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....(A) erred in law and on facts in approving the wrong re-opening of the assessing officer. 4. The CIT Appeal has erred in law and on facts by confirming the addition on agriculture income even though the case was opened on different facts and information. 5. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other." 5. Heard both the parties and perused the materials available on record. At the outset, the claim of the AR of the assessee was that the case of the assessee was reopened after passing order u/s 148A(d) of the Act dated 26.03.2022 wherein it was held that assessee had deposited cash in the bank account....
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....case of V. Jaganmohan Rao (supra). We may also note that the heading of section 147 is "income escaping assessment" and that of section 148 "issue of notice where income escaped assessment". Section 148 is supplementary and complimentary to section 147. Sub-section (2) of section 148 mandates reasons for issuance of notice by the Assessing Officer and sub-section (1) thereof mandates service of notice to the assessee before the Assessing Officer proceeds to assess, reassess or recompute escaped income. Section 147 mandates recording of reasons to believe by the Assessing Officer that the income chargeable to tax has escaped assessment. All these conditions are required to be fulfilled to assess or reassess the escaped income chargeable to t....
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....ere deleted by the Tribunal-Additions in respect of other items which were not part of "reasons to believe" were also not sustainable." 9. The Hon'ble jurisdictional high court in the case of ATS Infrastructure Ltd. vs ACIT reported in [2025] 166 taxmann.com 61 (Delhi) held that AO cannot be permitted to improve the reasons recorded which form basis for initiating action under section 148A. The relevant observations of the hon'ble high court as contained in para 29 to 32 of the order reads as under: "29. In our considered opinion, and bearing in mind the import of Explanation 3 as well as the language in which Section 147 of the Act stands couched, we find no justification to differ from the legal position which had been enunciated in Ra....
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....attempt to either deviate from the reasons originally recorded for initiating action under Section 147/148 of the Act nor can those Explanations be read as empowering the AO to improve upon, supplement or supplant the reasons which formed the bedrock for initiation of action under the aforenoted provisions." 10. Similarly, the Hon'ble Bombay High Court in the case of CIT vs Jet Airways (I) Ltd. reported in [2011] 331 ITR 236 (Bom.) has held that "it is not open to AO to independently assess some income other than the income referred in section 148 for which reason was recorded". The relevant head note of the judgement reads as under:- "Section 147 of the Income-tax Act, 1961 Income escaping assessment - Non-disclosure of primary facts As....