TaxTMI 
TaxTMI 
2026 (7) TMI 740
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....itting income from house property income in the return filed u/s 139(1). 3. In the facts and circumstances of the case, the CIT(A) ought to have considered that in the return of income filed u/s 148 income from house property was correctly admitted. 4. In the facts and circumstances of the case, the CIT(A) ought to have considered that in the return of income filed u/s 139(1), the share of the house property income relating to the wife of the assessee was inadvertently included. 5. In the facts and circumstances of the case, the CIT(A) ought to have considered the fact that the share of the wife in the house property income has been admitted in her return of income. 6. The assessee may be permitted to add, alter, modify or drop any ground that may be urged at the time of hearing with the prior approval of the Hon'ble ITAT." 2. Succinctly stated, the assessee had filed his original return of income for AY 2020-21 under section 139(1) of the Act on 05/11/2020, declaring an income of Rs. 47,32,750/-. 3. Subsequently, a search and seizure operation under section 132(1) of the Act was carried out on 05/10/2023 in the case of M/s. Pooja Krishna C....
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....o tax by his wife in her return of income and, therefore, there was neither any concealment nor any loss of revenue. 7. The CIT(A), however, did not find favour with the explanation furnished by the assessee. It was observed by him that, except for placing on record the computation of income of the assessee's wife, no documentary evidence had been produced to establish the ownership pattern of the properties, the extent of the assessee's share therein or the correctness of the revised computation of rental income. The CIT(A) further observed that there were material discrepancies between the two returns with regard to the number of properties, identity of tenants and quantum of rental receipts and that the figures disclosed by the assessee did not reconcile with those reflected in the computation of income of his wife. Accordingly, the CIT(A), being of the view that the assessee had failed to substantiate his claim with cogent documentary evidence, upheld the addition made by the AO and dismissed the appeal. 8. The assessee, aggrieved with the CIT(A) order, has carried the matter in appeal before us. 9. We have heard the Ld. Authorised Representatives of both parti....
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....ent to the search conducted under section 132(1) of the Act, the assessee in his return of income filed in response to notice issued under Section 148 of the Act, dated 29/03/2024 declared an income of Rs. 45,95,180/-, wherein the income under the head "Income from House Property" was disclosed by him at a reduced amount of Rs. 5,23,997/-. 15. As is discernible from the record, the explanation offered by the assessee is that while filing the original return, certain rental income which either belonged to his wife or represented her share in jointly owned properties was inadvertently included in his own hands and that the said mistake was rectified while furnishing the return in response to notice issued under section 148 of the Act, dated 29/03/2024. According to the assessee, since the corresponding rental income had already been offered by his wife in her return of income, there was neither any concealment nor any loss of revenue. 16. We have given thoughtful consideration and are unable to persuade ourselves to subscribe to the aforesaid claim of the assessee. As is discernible from the record, the income sought to be excluded by the assessee was not brought to tax by the ....
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.... of items finally concluded in the original assessment. The assessee cannot claim recomputation of the income or redoing of an assessment and be allowed a claim which he either failed to make or which was otherwise rejected at the time of original assessment which has since acquired finality. Of course, in the reassessment proceedings it is open to an assessee to show that the income alleged to have escaped assessment has in truth and in fact not escaped assessment but that the same had been shown under some inappropriate head in the original return, but to read the judgment in V. Jaganmohan Roa's case (supra) as if laying down that reassessment wipes out the original assessment and that reassessment is not only confined to 'escaped assessment' or 'under-assessment' but to the entire assessment for the year and start the assessment proceedings de novo giving right to an assessee to reagitate matters which he had lost during the original assessment proceeding, which had acquired finality, is not only erroneous but also against the phraseology of section 147 and the object of reassessment proceedings. Such an interpretation would be reading that judgment totally o....
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....evising, reopening or reconsidering the whole assessment or permitting the assessee to reagitate questions which had been decided in the original assessment proceedings. It is only the underassessment which is set aside and not the entire assessment when reassessment proceedings are initiated. The ITO cannot make an order of reassessment inconsistent with the original order of assessment in respect of matters which are not the subject matter of proceedings under section 147. An assessee cannot resist validly initiated reassessment proceedings under this section merely by showing that other income which had been assessed originally was at too high a figure except in cases under section 152(2). The words 'such income' in section 147 clearly refer to the income which is chargeable to tax but has 'escaped assessment' and the ITO's jurisdiction under the section is confined only to such income which has escaped assessment. It does not extend to reconsidering generally the concluded earlier assessment. Claims which have been disallowed in the original assessment proceeding cannot be permitted to be reagitated on the assessment being reopened for bringing to tax certai....
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....cted with the escapement of income. We cannot, therefore, approve in broad propositions laid in that regard in Indian Refrigeration Industries (P.) Ltd.'s case (supra), Ramsevak Paul's case (supra ), Assam Oil Co. Ltd.'s case (supra), Standard Motor Products of India Ltd.'s case (supra), Rangnath Bangur's case (supra), State Bank of Hyderabad's case (supra) and Indian Rare Earth Ltd.'s case (supra). 41. Keeping in view the above principles, we may now turn our attention to the question formulated by the High Court as noticed in the earlier part of the judgment. 42. The Tribunal rightly found that the loss which the assessee wanted to be set off against the 'escaped income' could not be allowed to be so set off because in the original assessment proceedings, no 'set off' was claimed or permitted and the original assessment had acquired finality when the appeal against the order of assessment failed before the AAC and the assessee took no further steps to agitate the issue. The Tribunal was also right in concluding that the items which the assessee wanted to be taken into account in the proceedings under section 147 were u....
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....CIT Vs. Sun Engineering Works P. Ltd. (1992) 198 ITR 297 (SC), the jurisdiction of the A.O in the course of reassessment proceedings initiated u/s. 147 of the Act is confined to only such income which has escaped tax or has been under-assessed and does not extend to revising, reopening or reconsidering the whole assessment; or permitting the assessee to re-agitate questions which had been decided in the original assessment proceedings. Also, as observed by the Hon'ble Apex Court the proceedings under Section 147 of the Act is for the benefit of the revenue and an assessee cannot be permitted to convert the reassessment proceedings as his appeal or revision, in disguise, and seek relief in respect of items earlier rejected or claim relief in respect of items not claimed in the original assessment proceedings, unless the same was relatable to 'escaped income'. Apart from that, it was observed by the Hon'ble Apex Court that even in cases where the claims of the assessee during the course of reassessment proceedings relating to the escaped assessment are accepted, still the allowance of such claims has to be limited to the extent to which they reduce the income to that original....