TaxTMI 
TaxTMI 
2024 (9) TMI 1883
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....e assessment order u/s 147 and in directing the AO to make assessment afresh on the ground that AO had not conducted worthwhile enquiries during the assessment proceeding even when the AO had conducted thorough enquiries and also most importantly the Pr. CIT failed to carry our any enquiry himself and also failed to demonstrate which most necessary enquiry the Ld. AO failed to carry out. 1.4. The Worthy Pr. CIT failed to appreciate that inadequate inquiry does not amount to lack of inquiry so as to assume valid jurisdiction u/s 263. 1.5 The Worthy Pr. CIT has erred in setting aside the original assessment on the issue of interest income of Rs. 8,75,726/- during the financial year in question. 1.6 The worthy Pr. CIT has conducted the impugned proceedings u/s 263 in extreme haste and without affording reasonable opportunity of being heard to the applicant. 2. That the appellant crave leave for any addition, deletion or amendment to the Grounds of appeal on or before the disposal of the same. 2. The only ground that the Assessee is agitating is regarding the order passed by the PCIT, Chandigarh-1 on the issue of interest income of Rs. 8,75,726/-.....
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....or the relevant year, "and also bring to tax", any other income, which may attract assessment, though, it is brought to his notice, subsequently, albeit, in the course of the reassessment proceedings. 21.1. To put it plainly, the purported income discovered subsequently during the course of reassessment proceedings, can be brought to tax, only, if the escaped income, which caused, in the first instance, the issuance of notice under section 148 of the Act, is assessed to tax: 22 Explanation 3, to my mind, supports this approach, which emerges upon a plain reading of the said provision, along with the main part of section 147 of the Act. The emphasis in this behalf is on the expression "and also bring to tax" appearing in the main part of section 147 in relation to the right of the Revenue to assess taxable income discovered during reassessment proceedings. In my view, Explanation 3, clearly, expounds that the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment and such other issue, that comes to his notice subsequently, albeit, in the course of proceedings held under section 147 of the Act. In other words, if, n....
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....ped assessment, has as a matter of fact not escaped assessment, it is not open to him independently to assess some other income. If he intends to do so, a fresh notice under section 148 would be necessary, the legality of which would be tested in the event of a challenge by the assessee." (Emphasis is mine) [See CIT v. Mohmed Juned Dadani [2013] 30 taxmann.com 1/214 Taxman 38/[2014] 355 ITR 172 (Guj); CIT v. Jet Airways (1) Ltd. [2010] 195 Taxman 117/[2011] 331 ITR 236 (Bom); and Oriental Bank of Commerce v. Addl. CIT [2014] 49 taxmann.com 485/[2015] 228 Taxman 25 (Delhi) (Mag.)/Manu/DE/1935/2014] 14. Given the aforesaid position, we are not inclined to interfere with the impugned order." xv. Thus, from the above decision it is evident that when in reopened assessment proceedings, the addition is not made on the issue for which the reopening was made, the AO himself is precluded from making any other addition, and therefore, your office is also not authorized to make any other addition by considering the time limit of reassessment order. May I request your honour to kindly drop proceedings under section 263 of the act on this count itself. I would not ....
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....ortunity of being heard and to make relevant submissions. It may be ensured that the fresh assessment order is passed within the prescribed time as stipulated under section 153(3) of the Act." 7. We have considered the findings of the ld. PCIT, Chandigarh-1 and we have also considered the submissions made by the ld. counsel of the Assessee during the proceedings before us. We have also considered the submissions of the ld. DR during the proceedings before us. We find that in this case Assessee's return of income was processed u/s 143(1) of the Act and the declared income in return of income was accepted. Thereafter, on the basis of an information that the Assessee had purchased an immovable property of Rs. 5,40,19,380/-, this case was reopened u/s 147 by issuing the notice u/s 148 of the Act. It was the only ground on account of which the assessment was reopened. The Assessee complied with all the requisites sought by the Assessing Officer in various notices issued from time to time and finally the Assessee's explanation regarding the amount of Rs. 5,40,19,380/-, spent on purchasing of immovable property, has been accepted by the Assessing Officer and the order u/s 143(3) read w....