ITO, Ward-2(2)(2), Ahmedabad V. Jasmin Jayendrabhai Thakkar, Ahmedabad

ITA 1330/AHD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8823 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 14-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRENDRA OJHA; S S SHUKLA
• Keywords: Reopening of assessment; Depreciation; Salary income; Competent authority; Reason to believe; Reassessment proceedings
• Section: 143(3); 142(1); 13; 147; 68; 148; 144; 139

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (THROUGH WEB-BASED VIDEO CONFERENCING PLATFORM) ] BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 1330/AHD/2019 & CO NO. 184/AHD/2019 / ASSESSMENT YEAR : 2010-11 INCOME-TAX OFFICER, WARD-2(2)(2), AHMEDABAD VS JASMINE JAYENDRABHAI THAKKAR, 4/94, SUNDERNAGAR FLATS, NR. MANISH HALL , NARANPURA, AHMEDABAD 380 013 PAN : ADYPT 9076 C / (APPELLANT) / (RESPONDENT/ CROSS-OBJECTOR) ITA NO. 1331/AHD/2019 & CO NO. 185/AHD/2019 / ASSESSMENT YEAR : 2011-12 INCOME - TAX OFFICER, WARD-2(2)(2), AHMEDABAD VS JASMINE JAYENDRABHAI THAKKAR, 4/94, SUNDERNAGAR FLATS, NR. MANISH HALL , NARANPURA, AHMEDABAD 380 013 PAN : ADYPT 9076 C / (APPELLANT) / (RESPONDENT/ CROSS-OBJECTOR) REVENUE BY : SHRI VIRENDRA OJHA, CIT-DR & SHRI S.S. SHUKLA, SR. DR ASSESSEE BY : SHRI VARTIK CHOKSHI, AR / DATE OF HEARING : 27/07/2021 / DATE OF PRONOUNCEMENT: 02/08/2021 / O R D E R PER RAJPAL YADAV, VICE PRESIDENT : THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINS T SEPARATE ORDERS OF LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OF EVEN DATED 17.06.2019 PASSED FOR ASSESSMENT YEARS 2010-11 AND 2011-12. O N RECEIPT OF NOTICE IN THE APPEALS OF THE REVENUE, THE ASSESSEE HAS FILED CROSS OBJECTIONS BEARING ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 2 NOS. 184/AHD/2019 AND 185/AHD/2019 IN ASSESSMENT YE ARS 2010-11 AND 2011-12 RESPECTIVELY. 2. SINCE COMMON ISSUES ARE INVOLVED IN ALL THESE AP PEALS; THEREFORE, WE HAVE HEARD THEM TOGETHER AND DEEM IT APPROPRIATE TO DISPOSE OF BY THIS COMMON ORDER. 3. FIRST WE TAKE UP ITA NO.1330/AHD/2019 AND CO NO. 184/AHD/2019. IN THE CROSS OBJECTION, THE ASSESSEE HAS CHALLENGED REOPENING OF ASSESSMENT. THIS GROUND OF APPEAL OF THE ASSESSEE HAS BEEN REJE CTED BY THE LEARNED FIRST APPELLATE AUTHORITY. HOWEVER, ON MERITS, THE ADDITI ONS HAVE BEEN DELETED. THEREFORE, FIRSTLY, WE TAKE UP THE JURISDICTIONAL I SSUE AGITATED IN THE CROSS OBJECTION. IN GROUND NO.1 THE ASSESSEE HAS PLEADED THAT THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE VALIDITY OF THE REASSESS MENT PROCEEDINGS INITIATED UNDER SECTION 147/148 OF THE INCOME-TAX A CT. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE LEARNED ASSESSING OFFICER HAS ISSUED A NOTICE UNDER SECTION 148 OF THE INCOME-TAX ACT ON 08.01.2016 AFTER RECORDING THE REASONS. THE LEARNED COUNSEL FOR THE ASSESSEE, WHILE IMPUGNING THE REOPENING OF THE ASSESSMENT, CONTENDE D THAT THE ASSESSMENT CAN BE REOPENED IF THE ASSESSING OFFICER IS SATISFI ED THAT THE INCOME HAS ESCAPED ASSESSMENT; HOWEVER, A NOTICE UNDER SECTION 148 COULD BE ISSUED ONLY AFTER TAKING APPROVAL FROM THE COMPETENT AUTHO RITY AS CONTEMPLATED UNDER SECTION 151 OF THE INCOME-TAX ACT. H E TOOK US THROUGH THE REASONS RECORDED AND THE OBJECTIONS FILED BY THE AS SESSEE AGAINST THE REOPENING. HE ALSO TOOK US THROUGH THE ORDER OF TH E ASSESSING OFFICER DATED 25.05.2016 VIDE WHICH THE ASSESSING OFFICER HAS DIS POSED OF THE OBJECTIONS AGAINST THE REOPENING OF THE ASSESSMENT. THE LEARN ED COUNSEL FOR THE ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 3 ASSESSEE FURTHER CONTENDED THAT IT IS ASSESSMENT YE AR 2010-11 AND NOTICE UNDER SECTION 148 OF THE INCOME-TAX ACT WAS ISSUED ON 08.01.2016 - MEANING THEREBY IT WAS ISSUED AFTER EXPIRY OF FOUR YEARS FR OM THE END OF THE RELEVANT ASSESSMENT YEAR. IF AN ASSESSING OFFICER WANTS TO REOPEN AN ASSESSMENT WHERE FOUR YEARS HAVE EXPIRED FROM THE END OF THE R ELEVANT ASSESSMENT YEAR, THEN, AS PER SUB-SECTION (1) OF SECTION 151, THE LE ARNED ASSESSING OFFICER HAS TO OBTAIN PERMISSION FROM THE PRINCIPAL CHIEF COMMI SSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSIO NER AS THE CASE MAY BE. IN THE PRESENT CASE, THE LEARNED ASSESSING OFF ICER DID NOT OBTAIN SUCH APPROVAL AND, THEREFORE, THE REOPENING IS BAD IN TH E EYES OF LAW. FOR BUTTRESSING THIS POINT THAT THE LEARNED ASSESSING O FFICER HAS NOT TAKEN THE APPROVAL FROM THE COMPETENT AUTHORITY, HE TOOK U S THROUGH OWN ADMISSION OF THE ASSESSING OFFICER IN THE ORDER PAS SED WHILE DISPOSING OF THE OBJECTIONS OF THE ASSESSEE. 5. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESEN TATIVE RELIED UPON THE ORDER OF THE ASSESSING OFFICER AS WELL AS THE F INDINGS OF THE LEARNED CIT(A) ON THIS ISSUE. 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS. THE REASONS RECORDED BY THE ASSESSING OFFICER HAS A DIRECT BEARING ON TH E CONTROVERSY IN HAND; THEREFORE, WE TAKE NOTE OF THE REASONS AVAILABLE ON PAGE NO.43 OF THE PAPER- BOOK WHICH READS AS UNDER:- REASONS FOR REOPENING SHRI JASMINE JAYENDRABHAI THAKKAR A.Y. 2010-11 ON PERUSAL OF THE BANK STATEMENT OF JASMINE JAYENDR ABHAI THAKKAR, OBTAINED FROM BANK, FOR ACCOUNT NO.463009114082071 MAINTAINE D WITH BHUJ MECANTILE CO-OPERATIVE BANK IT HAS BEEN FOUND THAT CASH DEPOSITS ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 4 AGGREGATING TO RS.11.94 CRORES HAVE BEEN MADE IN TH IS BANK ACCOUNT ON VARIOUS DATES DURING THE F.Y. 2009-10. FURTHER, THE RETURN OF INCOME FILED BY SHRI JASMINE J. THAKKAR WAS EXAMINED ON ITD. ON PERUSAL OF THE RETURN OF INCOME FILED B Y HIM IT HAS BEEN FOUND THAT HE DOES NOT HAVE ANY SUBSTANTIAL INCOME. THE DETAILS OF THE GROSS TOTAL INCOME FILED BY HIM FOR VARIOUS YEARS ARE TABULATED HEREUNDER: NAME OF PERSON HEAD GROSS TOTAL INCOME (IN RS.) AY 2012-13 AY 2011-12 AY 2010-11 AY 2009-10 AY 2008-09 JASMINE JAYENDRABHAI THAKKAR INCOME FROM SALARY / PENSION 287095 760248 512889 308398 262320 ON PERUSAL OF THE GROSS INCOME FILED BY HIM IT HAS BEEN FOUND THAT HE IS SHOWING INCOME UNDER THE HEAD SALARY AND HE DOES NOT HAVE ANY SUBSTANTIAL SOURCE OF INCOME SO AS TO DEPOSIT SUCH HUGE CASH IN HIS BANK ACCOUNT. IN VIEW OF THE DISCUSSION HELD ABOVE, THE SOURCE OF DEPOSITS IN THE HANDS OF SHRI JASMINE J. THAKKAR REMAINS UNEXPLAINED. MOREOV ER, HE DOES NOT HAVE ANY CREDITWORTHINESS SO AS TO DEPOSIT SUCH HUGE FUN DS IN CASH IN HIS ACCOUNTS. CONSIDERING THE ABOVE RETURNED INCOME AND KEEPING I N MIND THE HUGE CASH DEPOSITS IN THE BANK ACCOUNT, TO EXPLAIN THE SAME, I HAVE REASON TO BELIEVE THAT INCOME OF RS.11.94 CRORES HAS ESCAPED ASSESSME NT FOR FY 2009-10, I.E. AY 2010-11. ACCORDINGLY, IT IS A FIT CASE FOR REOP ENING U/S 147 OF THE I.T. ACT. SD/- (KAVITA P. KAUSHIK) DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1(3), AHMEDABAD. 7. A COPY OF THE NOTICE ISSUED UNDER SECTION 148 OF THE INCOME-TAX ACT IS AVAILABLE ON PAGE NO.1 OF THE PAPER-BOOK AND, ON PE RUSAL OF THIS NOTICE, IT WOULD REVEAL THAT IT WAS ISSUED ON 08.01.2016. IT IS, THEREFORE, ASSUMED THAT THE NOTICE UNDER SECTION 148 WAS ISSUED ON 08.01.20 16. AGAINST THIS ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 5 REOPENING OF ASSESSMENT, THE ASSESSEE HAS FILED OBJ ECTIONS AND THOSE OBJECTIONS HAVE BEEN DISPOSED OF BY THE LEARNED ASS ESSING OFFICER VIDE ORDER DATED 25 TH MAY 2016. FOR THE COMPLETENESS OF THE FACTS, WE D EEM IT APPROPRIATE TO TAKE NOTE OF THE ORDER ALSO WHICH RE ADS AS UNDER:- OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1 (3), 304, 3 RD FLOOR, AAYAKAR BHAVAN, AHMEDABAD, PHONE NO.079-27546870 NO.DCIT/CC-1(3)/JJT/AY10-11/2016-17 DATE: 25 .05.2016 ORDER OF THE DISPOSAL OF OBJECTION RAISED FOR THE A Y 2010-11 PAN : ADYPT9076C TO, SHRI JASMINE JAYNDRABHAI THAKKAR 4/94, SUNDER NAGAR FLATS, NR. MANISH HALL, NARANPURA, AHMEDABAD 380013 REF : OBJECTION RAISED AGAINST REASONS RECORDED FOR INITIATION OF RE-ASSESSMENT PROCEEDINGS U/S 147 OF THE I.T. ACT FOR AY 2010-11 THROUGH THE LETTER DATED 21.05.2016 AGAINST THE ASSESSMENT PROCEEDINGS REG . PLEASE REFER TO THE ABOVE. 2. THE POINT-WISE REPLY TO THE OBJECTION RAISED FO R AY 2010-11 IN YOUR CASE IS AS FOLLOWS: OBJECTION NO.1 : NON SATISFACTION OF PRE-CONDITION FOR INVOKING THE PROVISIONS OF SECTION 147: PLEASE NOTE THAT THE REASONS RECORDED U/S 147 WAS A LREADY FORWARDED TO YOU THROUGH THE LETTER DATED 12.05.2016, IT IS CLEARLY MENTIONED THE REASONS WHICH LEADS TO BELIEVE THAT INCOME OR PROFIT OR GAINS CHA RGEABLE TO INCOME-TAX HAS ESCAPED ASSESSMENT. OBJECTION NO.2 : JURISDICTION FOR REASSESSMENT PROC EEDINGS CANNOT BE ASSUMED ON BASIS OF REASONS TO SUSPECT: THE CASE IS RE-OPENED ON THE BASIS OF THE FACTS WHI CH HAVE LEADS TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT FOR THE CONCERNED AY, WHICH CAN BE SEEN ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 6 FROM THE REASONS RECORDED, ALREADY PROVIDED TO YOU. HENCE, THERE IS NO ASSUMPTION MADE IN THE CASE. OBJECTION NO.3: NOTICE ISSUED WITHOUT RECORDING OF PROPER SATISFACTION OF THE PR. CHIEF COMMISSIONER / CHIEF COMMISSIONER / PR. C OMMISSIONER / COMMISSIONER THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE. PLEASE NOTE THAT THE NOTICE U/S 148 WAS ISSUED AFTE R OBTAINING THE APPROVAL FROM THE CONCERNED JT. COMMISSIONER. COPY OF THE S AME IS ENCLOSED HEREWITH FOR YOUR REFERENCE. 3. AS THE OBJECTIONS RAISED BY YOU ARE HEREWITH DIS POSE OFF, YOU ARE REQUESTED TO ATTEND THE OFFICE OF THE UNDERSIGNED O N OR BEFORE 30.05.2016 WITH REPLY TO THE NOTICE ISSUED U/S 142(1) OF THE ACT DA TED 12.05.2016. 4. YOUR EXPLANATION SHOULD REACH THE UNDERSIGNED ON OR BEFORE 30.05.2016. PLEASE NOTE THAT IF YOU FAIL TO FURNIS H ANY EXPLANATION BY THE GIVEN DATE, ASSESSMENT IN YOUR CASE FOR THE ASSESSM ENT YEAR MAY BE FINALIZED U/S 144 OF THE INCOME TAX ACT, WITHOUT AFFORDING AN Y FURTHER OPPORTUNITY. NON-COMPLIANCE TO THE NOTICE WILL LEADS TO PENALTY PROCEEDINGS AS PER THE PROVISIONS OF INCOME-TAX ACT, 1961. YOURS FAITHFULLY, SD/- (KAVITA P. KAUSHIK) DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1(3), AHMEDABAD. 8. AT THIS STAGE, WE WOULD LIKE TO TAKE NOTE OF SEC TION 151 OF THE INCOME- TAX ACT WHICH READS AS UNDER:- 151. SPECIFIED AUTHORITY FOR THE PURPOSES OF SECTION 148 AND SECTION 148A SHALL BE, ( I ) PRINCIPAL COMMISSIONER OR PRINCIPAL DIRECTOR OR COMMISSIONER OR DIRECTOR, IF THREE YEARS OR LESS THAN THREE YEARS H AVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR; ( II ) PRINCIPAL CHIEF COMMISSIONER OR PRINCIPAL DIRECT OR GENERAL OR WHERE THERE IS NO PRINCIPAL CHIEF COMMISSIONER OR PRINCIP AL DIRECTOR GENERAL, CHIEF COMMISSIONER OR DIRECTOR GENERAL, IF MORE THAN THRE E YEARS HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR. ] ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 7 9. ON THE REASONS REPRODUCED ABOVE, NO DATE IS AVAI LABLE; HOWEVER, IT IS ASCERTAINED FROM THE COPY OF THE NOTICE DATED 08.01 .2016. SIMILARLY, IN THE OPENING LINE OF THE ASSESSMENT ORDER, LEARNED ASSES SING OFFICER HAS RECORDED THAT NOTICE UNDER SECTION 148 WAS ISSUED O N 08.01.2016. THIS FACT IS NECESSARY AS WE HAVE TO ASCERTAIN AS TO WHETHER THE NOTICE WAS ISSUED WITHIN FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR AFTER FOUR YEARS. ON PERUSAL OF THE FACTS IT WOULD INDICATE THAT NOTI CE WAS ISSUED AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR 2 010-11. 10. A PERUSAL OF SUB-SECTION (1) OF SECTION 151 OF THE INCOME-TAX ACT WOULD INDICATE THAT IF AN ASSESSING OFFICER WANTS T O ISSUE NOTICE UNDER SECTION 148 OF THE ACT AND FOUR YEARS HAVE EXPIRED FROM THE END OF THE RELEVANT ASSESSMENT YEAR, THEN HE CANNOT ISSUE SUCH NOTICE UNLESS AN APPROVAL FROM THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSIONER IS OBTAINED. IN OTHER WORDS UNLESS THE ABOVE AUTHORITIES ARE SATISFIED THAT IT IS A FIT CASE FOR REOPENING AND APPROVED THE ACTION OF THE ASSESSING OFFICER, N O NOTICE UNDER SECTION 148 OF THE ACT COULD BE ISSUED. 11. LET US NOW EXPLORE WHETHER SUCH APPROVAL WAS TA KEN OR NOT. UNDER OBJECTION NO.3 AGAINST THE REOPENING OF THE ASSESSM ENT, THE ASSESSEE TOOK A PLEA THAT NOTICE HAS BEEN ISSUED WITHOUT RECORDING OF PROPER SATISFACTION OF THE PRINCIPAL COMMISSIONER OF INCOME-TAX. AT THE C OST OF REPETITION, WE REPRODUCE THE RELEVANT FINDINGS FROM THE ORDER DATE D 25 TH MAY 2016 WHICH READS AS UNDER:- OBJECTION NO.3: NOTICE ISSUED WITHOUT RECORDING OF PROPER SATISFACTION OF THE PR. CHIEF COMMISSIONER / CHIEF COMMISSIONER / P R. COMMISSIONER / COMMISSIONER THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE. ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 8 PLEASE NOTE THAT THE NOTICE U/S 148 WAS ISSUED AFTE R OBTAINING THE APPROVAL FROM THE CONCERNED JT. COMMISSIONER. COPY OF THE SAME IS ENCLOSED HEREWITH FOR YOUR REFERENCE. 12. A PERUSAL OF THE ABOVE WOULD INDICATE THAT THE ASSESSING OFFICER HIMSELF HAS REJECTED THIS OBJECTION OF THE ASSESSEE BY OBSERVING THAT APPROVAL WAS TAKEN FROM THE JOINT COMMISSIONER OF INCOME-TAX . HE HAS NOT RECORDED THE FINDING THAT THE APPROVAL WAS TAKEN FROM THE CO MPETENT AUTHORITY I.E. PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSIONER. THUS, THERE WAS NO P ROPER APPROVAL FOR REOPENING OF THE ASSESSMENT AND THE REOPENING IS, T HEREFORE, NOT VALID IN THE EYES OF LAW. FOR FORTIFYING OURSELVES, WE PUT RELI ANCE UPON THE JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F ADANI PORTS & SEZ LTD VS. DCIT, REPORTED IN [2013] 35 TAXMANN.COM 338 WHE REIN THE HONBLE HIGH COURT HAS ALLOWED THE WRIT PETITION OF THE ASSESSEE AND QUASHED THE REOPENING UNDER IDENTICAL CIRCUMSTANCES. SIMILARLY , WE RELY UPON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. SPLS SIDDARTHA LTD, REPORTED IN [2012] 17 TAXMANN.COM 13 8. IN VIEW OF THE ABOVE DISCUSSION, WE ALLOW THIS GROUND OF CROSS OBJECTION AND QUASH THE ASSESSMENT ORDER. CONSEQUENTLY, ALL OTHER PROCEEDI NGS WOULD BECOME NULLITY AND THE APPEAL OF THE REVENUE THUS STANDS D ISMISSED. TO BE PRECISE, AFTER DECLARING THE ASSESSMENT ORDER NULL AND VOID, NO ADDITION WILL REMAIN IN THE HANDS OF THE ASSESSEE AND, THEREFORE, FOR ST ATISTICAL PURPOSES, GROUND NOS. 2 & 3 OF THE CROSS-OBJECTION BE ALSO TREATED A S ALLOWED. IN THE RESULT, CROSS-OBJECTION OF THE ASSESSEE IS ALLOWED; WHEREAS THE APPEAL OF THE REVENUE IS DISMISSED. 13. NOW WE TAKE UP THE APPEAL FILED BY THE REVENUE BEARING ITA NO.1331/AHD/2019 AND CROSS OBJECTION FILED BY THE A SSESSEE BEARING CO ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 9 NO. 185/AHD/2019 FOR THE ASSESSMENT YEAR 2011-12. IN THIS ASSESSMENT YEAR ALSO THE ASSESSEE HAS RAISED A JURISDICTIONAL ISSUE. HE HAS CHALLENGED THE ORDER OF THE LEARNED CIT(A) VIDE WHICH REOPENIN G OF THE ASSESSMENT WAS UPHELD BY THE FIRST APPELLATE AUTHORITY. 14. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE HAD FILED HIS ORIGINAL RETURN OF INCOME ON 3 RD JUNE 2011 DECLARING TOTAL INCOME AT RS.7,25,405/-. A NOTICE UNDER SECTION 148 OF THE INCOME-TAX ACT WAS ISSUED ON 8 TH JANUARY 2016. THE LEARNED ASSESSING OFFICER HAS PASSED THE IMPUGNED ASSESSMENT ORDER UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME -TAX ACT ON 20 TH DECEMBER 2016. HE DETERMINED THE TAXABLE INCOME OF THE ASSESSEE AT RS.7,62,43,212/-. DISSATISFIED WITH THE ADDITIONS, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A). THE LE ARNED CIT(A) HAS PARTLY DELETED THE ADDITION AND CONFIRMED THE ADDITION MAD E UNDER SECTION 68 OF THE ACT TO THE EXTENT OF RS.5,26,30,000/-. IN GROU ND NO.2 OF THE CROSS OBJECTION, THE ASSESSEE HAS CHALLENGED THE CONFIRMA TION OF THIS ADDITION; WHEREAS, THE REVENUE HAS CHALLENGED THE DELETION OF THE ADDITION. THE LEARNED COUNSEL FOR THE ASSESSEE, WHILE IMPUGNING T HE ORDERS OF THE REVENUE AUTHORITIES, SUBMITTED THAT THE ASSESSMENT WAS REOPENED ON THE GROUND THAT THE ASSESSEE HAS MADE CASH DEPOSITS OF RS.1.63 CRORES IN THE BANK ACCOUNT MAINTAINED WITH THE BHUJ MERCANTILE CO OPERATIVE BANK LIMITED. THE LEARNED COUNSEL FOR THE ASSESSEE TOOK US THROUGH THE COPY OF THE REASONS RECORDED BY THE ASSESSING OFFICER WHICH IS AVAILABLE ON PAGE NO.45 OF THE PAPER-BOOK. THE LEARNED COUNSEL FOR T HE ASSESSEE THEREAFTER TOOK US THROUGH THE ASSESSMENT ORDER AND SUBMITTED THAT NO ADDITION WAS MADE ON ACCOUNT OF CASH DEPOSITS AND, THEREFORE, IT IS TO BE CONSTRUED THAT THE ADDITION ON AN ISSUE FOR WHICH THE ASSESSMENT W AS REOPENED WAS NOT MADE. IF THAT BE THE CASE, THEN ANY OTHER INCOME C OMING TO THE NOTICE OF THE ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 10 ASSESSING OFFICER DURING THE REASSESSMENT PROCEEDIN GS CANNOT BE ADDED. IN OTHER WORDS, THE INCOME WHICH CAME TO THE NOTICE OF THE ASSESSING OFFICER AS ESCAPED INCOME DURING THE REASSESSMENT PROCEEDIN GS CAN ONLY BE ADDED IF ADDITION ON AN ISSUE FOR WHICH ASSESSMENT WAS RE OPENED IS BEING MADE. FOR BUTTRESSING HIS PROPOSITION AND EXPLAINING THE POSITION OF LAW, HE RELIED UPON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MOHMED JUNED DADANI, REPORTED IN [2013] 30 TAXMANN. COM 1. HE ALSO MADE RELIANCE UPON THE JUDGMENT OF THE HONBLE BOMB AY HIGH COURT IN THE CASE OF CIT VS. JET AIRWAYS (I) LTD., REPORTED IN [ 2011] 331 ITR 236 AS WELL AS THE JUDGEMENT OF HONBLE DELHI HIGH COURT IN THE CA SE OF RANBAXY LABORATORIES LTD VS. CIT, REPORTED IN [2011] 336 IT R 136. HE ALSO PLACED ON RECORDS THE COPIES OF TRIBUNAL ORDERS AS WELL AS DE CISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ADHUNIK NIRYAT IS PAT LTD IN APPEAL NO.2090 OF 2010. 15. THE LEARNED CIT-DR, ON THE OTHER HAND, TOOK US THROUGH THE ASSESSMENT ORDER AND SUBMITTED THAT IF ASSESSMENT O RDER IS BEING PERUSED, THEN IT WOULD REVEAL THAT THE ASSESSING OFFICER HAS MADE ANALYSIS OF THE ACCOUNT MAINTAINED BY THE ASSESSEE WITH THE BHUJ ME RCANTILE CO-OP. BANK LTD. HE FOUND CERTAIN CREDITS ENTRIES IN THE ACCOU NT - THOUGH BY ACCOUNT PAYEE CHEQUES BUT COULD NOT BE EXPLAINED BY THE ASS ESSEE ABOUT THE SOURCE OF THOSE FUNDS AS REQUIRED UNDER SECTION 68 OF THE INCOME-TAX ACT. THEREFORE, HE HAS RIGHTLY MADE THE ADDITION. WITH REGARD TO THE CONTENTIONS OF THE ASSESSEE THAT THE ASSESSMENT WAS REOPENED ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS BY THE ASSESSEE IN THE BANK ACCOUNT W ITH THE BHUJ MERCANTILE CO-OP. BANK, THE LEARNED CIT-DR WAS UNABLE TO CONTR OVERT THIS FACT THAT THE ADDITION OF CASH AMOUNT WAS NOT MADE. ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 11 16. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS A ND GONE THROUGH THE RECORD CAREFULLY. THE REASONS RECORDED BY THE ASSE SSING OFFICER FOR REOPENING OF THE ASSESSMENT IS AVAILABLE ON PAGE NO .45 OF THE PAPER-BOOK WHICH READS AS UNDER:- REASONS FOR REOPENING SHRI JASMINE JAYENDRABHAI THAKKAR AY 2011-12 ON PERUSAL OF THE BANK STATEMENT OF JASMINE JAYENDR ABHAI THAKKAR, OBTAINED FROM BANK, FOR ACCOUNT NO.463009114082071 MAINTAINE D WITH BHUJ MECANTILE CO-OPERATIVE BANK IT HAS BEEN FOUND THAT CASH DEPOSITS AGGREGATING TO RS.1.63 CRORES HAVE BEEN MADE IN THI S BANK ACCOUNT ON VARIOUS DATES DURING THE F.Y. 2010-11. FURTHER, THE RETURN OF INCOME FILED BY SHRI JASMINE J. THAKKAR WAS EXAMINED ON ITD. ON PERUSAL OF THE RETURN OF INCOME FILED B Y HIM IT HAS BEEN FOUND THAT HE DOES NOT HAVE ANY SUBSTANTIAL INCOME. THE DETAILS OF THE GROSS TOTAL INCOME FILED BY HIM FOR VARIOUS YEARS ARE TABULATED HEREUNDER: NAME OF PERSON HEAD GROSS TOTAL INCOME (IN RS.) AY 2012-13 AY 2011-12 AY 2010-11 AY 2009-10 AY 2008-09 JASMINE JAYENDRABHAI THAKKAR INCOME FROM SALARY / PENSION 287095 760248 512889 308398 262320 ON PERUSAL OF THE GROSS INCOME FILED BY HIM IT HAS BEEN FOUND THAT HE IS SHOWING INCOME UNDER THE HEAD SALARY AND HE DOES NOT HAVE ANY SUBSTANTIAL SOURCE OF INCOME SO AS TO DEPOSIT SUCH HUGE CASH IN HIS BANK ACCOUNT. IN VIEW OF THE DISCUSSION HELD ABOVE, THE SOURCE OF DEPOSITS IN THE HANDS OF SHRI JASMINE J. THAKKAR REMAINS UNEXPLAINED. MOREOV ER, HE DOES NOT HAVE ANY CREDITWORTHINESS SO AS TO DEPOSIT SUCH HUGE FUN DS IN CASH IN HIS ACCOUNTS. CONSIDERING THE ABOVE RETURNED INCOME AND KEEPING I N MIND THE HUGE CASH DEPOSITS IN THE BANK ACCOUNT, WHICH REMAINED TO BE EXPLAINED IN SPITE OF THE OPPORTUNITY GIVEN TO THE ASSESSEE TO EXPLAIN THE SA ME, I HAVE REASON TO BELIEVE ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 12 THAT INCOME HAS ESCAPED ASSESSMENT WITHIN THE MEANI NG OF SECTION 147 OF THE I.T. ACT. CONSIDERING THE ABOVE RETURNED INCOME AND KEEPING I N MIND THE HUGE CASH DEPOSITS IN THE BANK ACCOUNT, TO EXPLAIN THE SAME. I HAVE REASON TO BELIEVE THAT INCOME OF RS.1.63 CRORES HAS ESCAPED ASSESSMEN T FOR F.Y. 2010-11 I.E. A.Y. 2011-12. ACCORDINGLY, IT IS A FIT CASE FOR RE OPENING U/S 147 OF THE ACT. SD/- (KAVITA P. KAUSHIK) DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1(3), AHMEDABAD. 17. A PERUSAL OF THE ABOVE REASONS WOULD INDICATE T HAT THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT ON THE GROUND T HAT THE ASSESSEE HAD MADE DEPOSITS IN CASH AGGREGATING TO RS.1.63 CRORES . THIS CASH DEPOSIT, IN THE OPINION OF THE ASSESSING OFFICER, WAS ESCAPED I NCOME FROM THE ASSESSMENT. WE HAVE PERUSED THE ASSESSMENT ORDER A LSO, BUT WE DO NOT FIND ANY SUCH ADDITION MADE BY THE ASSESSING OFFICER. H E TOOK NOTICE OF THE FACT THAT A SUM OF RS.7,54,35,000/- WAS DEPOSITED THROUG H ACCOUNT PAYEE CHEQUE FROM FOUR PERSONS/FIRMS NAMELY (I) ASHISH PATEL, (I I) KANJI DESAI, (III) VITTAL BIO AND (IV) PLATINUM. THE DETAILS OF THE SAME ARE AS UNDER:- NAME AMOUNT RS. ASHISH PATEL (31.05.2010 & 24.02.2011) 65,80, 000/- KANJI DESAI 1,62,25,000/- VITTAL BIO 2,80,60,000/- PLATINUM 2,45,70,000/- 18. IT IS PERTINENT TO NOTE THAT THESE ENTRIES IN T HE BANK ACCOUNT WERE MADE THROUGH ACCOUNT PAYEE CHEQUES. THE ASSESSING OFFICER HAS NOT MADE THE ADDITION OF RS.1.63 CRORES WHICH WAS ALLEGEDLY DEPOSITED IN CASH; RATHER THE ASSESSING OFFICER HAS MADE SOME OTHER ADDITIONS . LET US EVALUATE THE POSITION OF LAW PROPOUNDED BY THE HONBLE JURISDICT IONAL HIGH COURT AND OTHER HONBLE HIGH COURTS ON THIS ISSUE. IN THE CA SE OF MOHMED JUNED ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 13 DADANI (SUPRA), THE HONBLE HIGH COURT OF GUJARAT H AS CONSIDERED IDENTICAL QUESTION. THE QUESTION FORMULATED BY THE HONBLE H IGH COURT OF GUJARAT READS AS UNDER:- WHETHER THE INCOME-TAX APPELLATE TRIBUNAL WAS RIGH T IN LAW IN COMING TO THE CONCLUSION THAT WHEN ON THE GROUND ON WHICH THE REOPENING OF ASSESSMENT IS BASED, NO ADDITIONS ARE MADE BY THE A SSESSING OFFICER IN THE ORDER OF ASSESSMENT, HE CANNOT MAKE ADDITIONS ON SO ME OTHER GROUNDS WHICH DID NOT FORM PART OF THE REASONS RECORDED BY HIM. AND, THEREAFTER, HONBLE HIGH COURT MADE A REFEREN CE TO THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF JET AIRWAYS (I) LTD (SUPRA) AS WELL AS THE DECISION OF THE HONBLE DELHI HIGH C OURT IN THE CASE OF RANBAXY LABORATORIES (SUPRA). THE DISCUSSIONS MADE BY THE HONBLE HIGH COURT OF GUJARAT READ AS UNDER:- 19. IN LIGHT OF THE ABOVE DECISIONS, WE NEED TO AN SWER THE QUESTION FRAMED. IN ORDER TO DO SO, WE MAY NOTICE THE STATUTORY PROV ISIONS APPLICABLE. SECTION 147 OF THE ACT UNDERWENT SIGNIFICANT CHANGES W.E.F. 01.04.1989. IN THE PRESENT FORM AS IT STANDS THE SECTION READS AS UNDE R: [INCOME ESCAPING ASSESSMENT.] 147. INCOME ESCAPING ASSESSMENT.- IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ES CAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PRO VISIONS OF SECTIONS 148 TO 153, 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 PROCEE DINGS UNDER THIS SECTION, OR RECOMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR THE ASSESS MENT YEAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTIONS 148 TO 1 53 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR) : PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLES S ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH A SSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE T O MAKE A RETURN UNDER ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 14 SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESS MENT YEAR: PROVIDED FURTHER THAT THE ASSESSING OFFICER MAY ASS ESS OR REASSESS SUCH INCOME, OTHER THAN THE INCOME INVOLVING MATTER S WHICH ARE THE SUBJECT MATTERS OF ANY APPEAL, REFERENCE OR REVISIO N, WHICH IS CHARGEABLE TO TAX AND HAS ESCAPED ASSESSMENT. EXPLANATION 1. PRODUCTION BEFORE THE ASSESSING OFFI CER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDE NCE COULD WITH DUE DILIGENCE HAVE BEEN DISCOVERED BY THE ASSESSING OFF ICER WILL NOT NECESSARILY AMOUNT TO DISCLOSURE WITHIN THE MEANING OF THE FOREGOING PROVISO. EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, TH E FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARGEABL E TO TAX HAS ESCAPED ASSESSMENT, NAMELY : (A) WHERE NO RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE ALTHOUGH HIS TOTAL INCOME OR THE TOTAL INCOME OF AN Y OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DU RING THE PREVIOUS YEAR EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARG EABLE TO INCOME- TAX ; (B) WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMENT HAS BEEN MADE AND IT IS NOTICED BY THE A SSESSING OFFICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR HAS CLAIMED EXCESSIVE LOSS, DEDUCTION, ALLOWANCE OR RELIEF IN THE RETURN ; (C) WHERE AN ASSESSMENT HAS BEEN MADE, BUT (I) INCOME CHARGEABLE TO TAX HAS BEEN UNDERASSESSED; OR (II) SUCH INCOME HAS BEEN ASSESSED AT TOO LOW A RATE ; OR (III) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCESSIVE RELIEF UNDER THIS ACT ; OR (IV) EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE OR ANY OTH ER ALLOWANCE UNDER THIS ACT HAS BEEN COMPUTED. EXPLANATION 3. FOR THE PURPOSE OF ASSESSMENT OR REA SSESSMENT UNDER THIS SECTION, THE ASSESSING OFFICER MAY ASSESS OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE, WHICH HAS ESCAPED ASSESSME NT, AND SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF T HE PROCEEDINGS UNDER THIS SECTION, NOTWITHSTANDING THAT THE REASON S FOR SUCH ISSUE ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 15 HAVE NOT BEEN INCLUDED IN THE REASONS RECORDED UNDE R SUB-SECTION (2) OF SECTION 148. 20. WE MAY NOTICE THAT EXPLANATION 3 TO SECTION 14 7 OF THE ACT WAS INSERTED BY FINANCE ACT 2 OF 2009 W.E.F. 01.04.1989. TO THIS ASPECT OF THE MATTER AND THE EFFECT OF THE EXPLANATION ITSELF WE WOULD ADVER T TO AT A LATER STAGE. 21. SECTION 148 OF THE ACT PERTAINS TO ISSUANCE OF NOTICE WHERE INCOME HAD ESCAPED ASSESSMENT . SUB-SECTION (1) OF SECTION 148 PERTAINS TO THE REQUIREMENT OF ISSUANCE OF NOTICE BY THE ASSESSING OFFICER BEFORE MAKING THE ASSESSMENT, REASSESSMENT OR RECOMPUTATION OF INCOME UNDER SECTION 147 OF THE ACT. SUB-SECTION (2) OF SECTION 148 PROVIDES TH AT THE ASSESSING OFFICER SHALL BEFORE ISSUING ANY NOTICE UNDER THE SAID SECT ION RECORD HIS REASONS FOR DOING SO. 22. SECTION 147 OF THE ACT THUS, GIVES POWER TO THE ASSESSING OFFICER FOR REOPENING AN ASSESSMENT. SUCH POWERS, HOWEVER, ARE HEDGED WITH SEVERAL CONDITIONS. FIRST THE ASSESSING OFFICER MUST HAVE R EASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. FU RTHER IF THE REOPENING IS RESORTED BEYOND THE PERIOD OF FOUR YEARS FROM THE E ND OF THE RELEVANT ASSESSMENT YEAR, ADDITIONAL REQUIREMENT THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT BY THE REASON OF FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTI CE UNDER SECTION 142(1) OR 148 OF THE ACT OR TO DISCLOSE FULLY AND TRULY ALL M ATERIAL FACTS NECESSARY FOR THE ASSESSMENT MUST ALSO BE SATISFIED. IF THE REQUI REMENTS OF GIVING JURISDICTION TO THE ASSESSING OFFICER TO REOPEN ASS ESSMENT ARE SATISFIED, HE MAY ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTH ER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THE SAID SECTION. 23. SECTION 147 OF THE ACT, EVEN WITHOUT THE AID OF EXPLANATION 3 THUS ENABLED THE ASSESSING OFFICER WHILE FRAMING AN ASSE SSMENT UNDER SECTION 147 OF THE ACT, TO ASSESS OR REASSESS SUCH INCOME F OR WHICH HE HAD RECORDED HIS REASONS TO BELIEVE HAD ESCAPED ASSESSMENT AND A LSO ANY OTHER INCOME WHICH ESCAPED ASSESSMENT WHICH CAME TO HIS NOTICE S UBSEQUENTLY IN THE COURSE OF THE ASSESSMENT PROCEEDINGS. 24. SANS EXPLANATION (3), SECTION 147 OF THE ACT, H OWEVER, BY NO STRETCH OF IMAGINATION, CAN BE CONSTRUED AS TO PROVIDE THAT IF THE REASON ON WHICH THE ASSESSMENT IS REOPENED FAILS, THE ASSESSING OFFICER STILL CAN PROCEED TO ASSESS SOME OTHER INCOME WHICH ACCORDING TO HIM HAD ESCAPE D ASSESSMENT AND WHICH CAME TO HIS LIGHT DURING THE COURSE OF THE AS SESSMENT. FOR ASSUMING JURISDICTION TO FRAME AN ASSESSMENT UNDER SECTION 1 47 OF THE ACT WHAT IS ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 16 ESSENTIAL IS A VALID REOPENING OF A PREVIOUSLY CLOS ED ASSESSMENT. IF THE VERY FOUNDATION OF THE REOPENING IS KNOCKED OUT, ANY FUR THER PROCEEDING IN RESPECT TO SUCH ASSESSMENT NATURALLY WOULD NOT SURVIVE. 25. A QUESTION MAY THEREFORE, ARISE WHETHER INTRODU CTION OF EXPLANATION (3) WOULD CHANGE THIS POSITION AND FOR THAT PURPOSE WE NEED TO ASCERTAIN WHAT IS TRUE PURPORT OF EXPLANATION 3 AND THE PURPOSE FOR W HICH THE SAME WAS INTRODUCED. LET US HAVE A CLOSER LOOK TO SUCH EXPLA NATION WHICH PROVIDES THAT FOR THE PURPOSE OF ASSESSMENT OR REASSESSMENT UNDER THE SAID SECTION, THE ASSESSING OFFICER MAY ASSESS OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE WHICH ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOT ICE SUBSEQUENTLY IN THE COURSE OF REASSESSMENT PROCEEDINGS. THE EXPLANATION FURTHER PROVIDES THAT THIS WOULD BE SO NOTWITHSTANDING THAT THE REASONS F OR SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REASONS RECORDED UNDER SECTION 148(2). 26. IF THE CONTENTION OF THE ASSESSEE THAT EVEN AFT ER INTRODUCTION OF EXPLANATION 3 TO SECTION 147 OF THE ACT, THE SITUAT ION HAS NOT UNDERGONE ANY MATERIAL CHANGE IS ACCEPTED, THE QUESTION THAT IMME DIATELY WOULD COME TO ONE S MIND IS, WHAT THEN WAS THE PURPOSE OF INTRODU CING SUCH AN EXPLANATION. AN ARGUMENT MAY ARISE THAT IF BEFORE A ND AFTER INTRODUCTION OF EXPLANATION 3, THE NATURE OF JURISDICTION EXERCISED BY THE ASSESSING OFFICER WAS NOT TO UNDERGO ANY CHANGE, WOULD EXPLANATION 3 NOT BE RENDERED REDUNDANT. WOULD SUCH A SITUATION NOT RUN COUNTER T O A WELL KNOWN LEGAL PRINCIPLE THAT THE LEGISLATURE CANNOT BE SEEN TO HA VE ENACTED A REDUNDANT LEGISLATION AND THAT EVERY EFFORT SHOULD BE MADE TO GIVE SUCH INTERPRETATION WHICH ENSURES THAT A PROVISION IN A STATUTE IS NOT RENDERING OTIOSE. SUCH QUESTION MAY HAVE LED TO SOME INTERESTING DISCUSSIO N. HOWEVER, THE ENTIRE ISSUE HAS BEEN PUT BEYOND ANY PALE OF CONTROVERSY B Y VIRTUE OF THE EXPLANATORY MEMORANDUM FOR INTRODUCING SUCH EXPLANA TION. SUCH EXPLANATORY MEMORANDUM READS AS UNDER: CLARIFICATORY AMENDMENT IN RESPECT OF REASSESSMENT PROCEEDING UNDER SECTION 147 THE EXISTING PROVISIONS OF SECTION 147 PROVIDES, IN TER ALIA, THAT IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT ANY IN COME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY ASSESS OR REASSESS SUCH INCOME AFTER RECORDING REASONS FOR RE -OPENING THE ASSESSMENT. FURTHER, HE MAY ALSO ASSESS OR REASSESS SUCH OTHER INCOME WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF PROCEEDINGS UNDER THI S SECTION. SOME COURTS HAVE HELD THAT THE ASSESSING OFFICER HA S TO RESTRICT THE REASSESSMENT PROCEEDINGS ONLY TO ISSUES IN RESPECT OF WHICH THE ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 17 REASONS HAVE BEEN RECORDED FOR REOPENING THE ASSESS MENT. HE IS NOT EMPLOWERED TO TOUCH UPON ANY OTHER ISSUE FOR WHICH NO REASONS HAVE BEEN RECORDED. THE ABOVE INTERPRETATION IS CONTRARY TO THE LEGISLATIVE INTENT. WITH A VIEW TO FURTHER CLARIFYING THE LEGISLATIVE I NTENT, IT IS PROPOSED TO INSERT AN EXPLANATION IN SECTION 147 TO PROVIDE THAT THE ASSESSING OFFICER MAY ASSESS OR REASSESS INCOME IN RESPECT OF ANY ISSUE WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF P ROCEEDINGS UNDER THIS SECTION, NOTWITHSTANDING THAT THE REASON FOR S UCH ISSUE HAS NOT BEEN INCLUDED IN THE REASONS RECORDED UNDER SUB-SEC TION (2) OF SECTION 148. THIS AMENDMENT WILL TAKE EFFECT RETROSPECTIVELY FRO M 1ST APRIL, 1989 AND WILL, ACCORDINGLY, APPLY IN RELATION TO ASSESSM ENT YEAR 1989-1990 AND SUBSEQUENT YEARS. 27. FROM THE ABOVE, IT CAN BE SEEN THAT THE EXPLANA TION WAS MEANT TO BE CLARIFICATORY IN NATURE AND TO PUT THE ISSUE BEYOND ANY LEGAL CONTROVERSY. WHEN THE LEGISLATURE FOUND THAT IN FACE OF THE PROV ISIONS CONTAINED IN SECTION 147 OF THE ACT POST 01.04.1989 SOME OF THE COURTS HAD TAKEN A VIEW THAT THE ASSESSING OFFICER IS RESTRICTED TO THE REA SSESSMENT PROCEEDINGS ONLY ON ISSUES IN RESPECT OF WHICH THE REASONS WERE RECO RDED FOR REOPENING THE ASSESSMENT, SUCH EXPLANATION WAS INTRODUCED IN THE STATUTE. THUS, THE EXPLANATION WAS MEANT TO BE MERELY CLARIFICATORY IN NATURE AND WAS INTRODUCED WITH THE PURPOSE OF PUTTING AT REST THE LEGAL CONTROVERSY REGARDING THE TRUE INTERPRETATION OF SECTION 147 OF THE ACT WHICH HAD ARISEN ON ACCOUNT OF CERTAIN JUDICIAL PRONOUNCEMENTS. WE H AVE NOTICED THAT PRIOR TO ENACTMENT OF EXPLANATION 3 TO SECTION 147, PUNJAB A ND HARYANA HIGH COURT IN CASE OF COMMISSIONER OF INCOME TAX VS. ATLAS CYC LE INDUSTRIES REPORTED IN 180 ITR 319 (SUPRA) HAD TAKEN A RESTRICTED VIEW OF THE POWER OF THE ASSESSING OFFICER TO MAKE ANY ADDITION ON THE GROUN DS NOT MENTIONED IN THE REASONS RECORDED FOR REOPENING THE ASSESSMENT. WE M AY ALSO NOTICE THAT KERELA HIGH COURT IN CASE OF TRAVENCORE CEMENTS LTD . VS. ASSISTANT COMMISSIONER OF INCOME-TAX AND ANR REPORTED IN 305 ITR 170 HAD TAKEN SOMEWHAT SIMILAR STAND. 28. EXPLANATION 3 TO SECTION 147 OF THE ACT THUS DO ES NOT IN ANY MANNER, EVEN PURPORT TO EXPAND THE POWERS OF THE ASSESSING OFFICER UNDER SECTION 147 OF THE ACT. IN ANY CASE, AN EXPLANATION CANNOT EXPAND THE SCOPE AND SWEEP OF THE MAIN BODY OF THE STATUTORY PROVISION. IN CASE OF S.SUNDARAM PILLAI VS. V.R.PATTABIRAMAN REPORTED IN AIR 1985 SU PREME COURT 582 THE SUPREME COURT OBSERVED THAT, AN EXPLANATION ADDED T O A STATUTORY PROVISION ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 18 IS NOT A SUBSTANTIVE PROVISION BUT AS THE PLAIN MEA NING OF THE WORD ITSELF SHOWS IT IS MERELY MEANT TO EXPLAIN OR CLARIFY CERT AIN AMBIGUITIES WHICH MAY HAVE CREPT IN THE STATUTORY PROVISION. IT WAS OBSER VED AS UNDER: 52. THUS, FROM A CONSPECTUS OF THE AUTHORITIES REF ERRED TO ABOVE, IT IS MANIFEST THAT THE OBJECT OF AN EXPLANATION TO A STA TUTORY PROVISION IS- (A) TO EXPLAIN THE MEANING AND INTENDMENT OF THE AC T ITSELF, (B) WHERE THERE IS ANY OBSCRUITY OR VAGUENESS IN TH E MAIN ENACTMENT, TO CLARIFY THE SAME SO AS TO MAKE IT CONSISTENT WIT H THE DOMINANT OBJECT WHICH IT SEEMS TO SUBSERVE. (C) TO PROVIDE AN ADDITIONAL SUPPORT TO THE DOMINAN T OBJECT OF THE ACT IN ORDER TO MAKE IT MEANINGFUL AND PURPOSEFUL. (D) AN EXPLANATION CANNOT IN ANY WAY INTERFERE WITH OR CHANGE THE ENACTMENT OR ANY PART THEREOF BUT WHERE SOME GAP IS LEFT WHICH IS RELEVANT FOR THE PURPOSE OF THE EXPLANATION, IN ORD ER TO SUPPRESS THE MISCHIEF AND ADVANCE THE OBJECT OF THE ACT IT CAN H ELP OR ASSIST THE COURT IN INTERPRETING THE TRUE PURPORT AND INTENDME NT OF THE ENACTMENT, AND (E) IT CANNOT, HOWEVER, TAKE AWAY A STATUTORY RIGHT WITH WHICH ANY PERSON UNDER A STATUTE HAS BEEN CLOTHED OR SET AT N AUGHT THE WORKING OF AN ACT BY BECOMING AN HINDRANCE IN THE INTERPRET ATION OF THE SAME. 29. ABOVE DECISION HAS BEEN REFERRED TO AND RELIED UPON IN SEVERAL SUBSEQUENT DECISIONS. ABOVE PROPOSITION BEING WELL SETTLED, IT IS NOT NECESSARY TO REFER TO ALL SUCH DECISIONS. 30. WE MAY ALSO APPROACH THE QUESTION FROM A SLIGHT LY DIFFERENT ANGLE. IT IS NOT IN DISPUTE THAT ONCE AN ASSESSMENT IS REOPENED BY A VALID EXERCISE OF JURISDICTION UNDER SECTION 147 OF THE ACT, IT IS OP EN FOR THE ASSESSING OFFICER TO ASSESS OR REASSESS ANY INCOME WHICH HAD ESCAPED ASSESSMENT WHICH COMES TO HIS LIGHT DURING THE COURSE OF HIS ASSESSMENT PR OCEEDINGS WHICH WAS NOT MENTIONED IN THE REASON FOR ISSUING NOTICE UNDER SE CTION 148 OF THE ACT. IN A NOTICE FOR REASSESSMENT WHICH HAS BEEN ISSUED BEYON D A PERIOD OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR, THE CONDI TION THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE RE ASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY AL L MATERIAL FACTS FOR THE PURPOSE OF ASSESSMENT MUST ALSO BE ESTABLISHED UNLE SS OFCOURSE SOME OTHER GROUND VIZ. NON-FILING OF THE RETURN AT ALL ETC. IS AVAILABLE TO THE ASSESSING ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 19 OFFICER. IF SUCH NON-DISCLOSURE OF MATERIAL FACTS I S ESTABLISHED WITH RESPECT TO THE REASON RECORDED FOR ISSUING NOTICE FOR REOPENIN G THE ASSESSMENT, IT WOULD BE OPEN FOR THE ASSESSING OFFICER TO THEREAFTER EVE N ASSESS OTHER INCOME WHICH MIGHT HAVE ESCAPED ASSESSMENT BUT WHICH MAY NOT NEC ESSARILY SATISFY THE REQUIREMENT OF NON-DISCLOSURE OF TRUE AND FULL MATE RIAL FACTS. IF IN SUCH A SITUATION, THE STAND OF THE REVENUE IS ACCEPTED, A VERY INCONGRUENT SITUATION WOULD COME ABOUT IF ULTIMATELY THE ASSESSING OFFICE R WERE TO DROP THE GROUND ON WHICH NOTICE FOR REOPENING HAD BEEN ISSUE D BUT TO CHASE SOME OTHER GROUNDS NOT SO MENTIONED FOR ISSUANCE OF THE NOTICE. IN SUCH A SITUATION, EVEN IF A CASE WHERE NOTICE FOR REOPENIN G HAS BEEN ISSUED BEYOND A PERIOD OF FOUR YEARS, THE ASSESSMENT WOULD CONTINUE EVEN THOUGH ON ALL THE GROUNDS ON WHICH THE ADDITIONS ARE BEING MADE, THER E WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRUE AND FULL MATE RIAL FACTS. IN SUCH A SITUATION AN IMPORTANT REQUIREMENT OF FAILURE ON PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS WOULD BE TOTALLY CIRCU MVENTED. 31. AS ALREADY NOTED, EXCEPT FOR THE PUNJAB AND HAR YANA HIGH COURT IN CASE OF MAJINDER SINGH KANG VS. COMMISSIONER OF INCOME-T AX AND ANR (SUPRA) ALL COURTS HAVE UNIFORMLY TAKEN A VIEW THAT EXPLANA TION 3 TO SECTION 147 OF THE ACT DOES NOT CHANGE THE SITUATION INSOFAR AS TH E PRESENT CONTROVERSY IS CONCERNED. LEADING DECISION OF BOMBAY HIGH COURT IN CASE OF CIT. VS. JET AIRWAYS (I) LTD. HAS BEEN FOLLOWED BY DIFFERENT HIG H COURTS. IN CASE OF CIT. VS. JET AIRWAYS (I) LTD.,THE HIGH COURT, IN ITS ELA BORATE DECISION CONSIDERING THE STATUTORY PROVISIONS, DIFFERENT JUDICIAL PRONOU NCEMENTS AND THE EXPLANATORY MEMORANDUM FOR INTRODUCTION OF EXPLANAT ION 3 TO SECTION 147 OF THE ACT, RULED IN FAVOUR OF THE ASSESSEE. 32. PUNJAB AND HARYANA HIGH COURT IN CASE OF MAJIND ER SINGH KANG VS. COMMISSIONER OF INCOME-TAX AND ANR (SUPRA) OFCOURSE HAS SOUNDED A DIFFERENT NOTE. WE MAY, HOWEVER, NOTICE THAT THE EX PLANATORY MEMORANDUM TO EXPLANATION 3 TO SECTION 147 OF THE ACT WAS NOT BROUGHT TO THE NOTICE OF THE HIGH COURT IN THE SAID DECISION. THE HIGH COURT GAVE CONSIDERABLE IMPORTANCE ON SUCH EXPLANATION 3 TO SECTION 147 OF THE ACT AND THE LANGUAGE USED THEREIN. 33. IN THE RESULT, WE ANSWER THE QUESTION IN THE AF FIRMATIVE I.E. IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. ALL TAX APPEA LS ARE DISMISSED. 19. SINCE NO ADDITION WAS MADE ON AN ISSUE FOR WHIC H THE ASSESSMENT WAS REOPENED, THEREFORE, ANY OTHER ADDITION IS NOT SUST AINABLE. WE ALLOW THIS GROUND OF APPEAL AND CONSEQUENTLY DELETE ALL OTHER ADDITIONS MADE BY THE ITA NOS. 1330 & 1331 AHD 2019 & CO NOS. 184 & 185 AHD 2019 ASSESSEE - JASMIN JAYENDRABHAI THAKKAR AYS :2010-11 & 2011-12 20 ASSESSING OFFICER AND PARTLY CONFIRMED BY THE LEARN ED CIT(A). THE OTHER ISSUES AGITATED BY THE ASSESSEE AS WELL AS BY THE R EVENUE IN ITS APPEAL BECOME REDUNDANT IN VIEW OF THE ABOVE DECISION. THE REFORE, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE; IT IS ACCOR DINGLY DISMISSED, AND, CROSS OBJECTION OF THE ASSESSEE IS THUS ALLOWED. 20. IN THE RESULT, BOTH THE CROSS-OBJECTIONS OF THE ASSESSEE ARE ALLOWED; WHEREAS THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 2 ND AUGUST 2021 AT AHMEDABAD. SD/- SD/- (WASEEM AHMED) (R AJPAL YADAV) ACCOUNTANT MEMBER VICE-PRESIDENT AHMEDABAD, DATED 02/08/2021 *BT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ) ( / THE CIT(A)- 5. , , /DR,ITAT, AHMEDABAD, 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) ITAT, AHMEDABAD 1. DATE OF DICTATION- 30.072021 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 30.07.2021 OTHER MEMBER 02.08.2021. 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. - 02.08.2021 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 02.08.2021.. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 02.08.2021 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REG ISTRAR FOR SIGNATURE ON THE ORDER 8. DATE OF DESPATCH OF THE ORDER