M/s. Rajmoti Road Movers, Ambuja Nagar, Kodinar Veraval Highway, Gujarat V. The Pr. CIT-1, Rajkot, Rajkot

ITA 157/RJT/2022

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8827 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-01-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 03-05-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRISHRAMDEEPSINHA; FORTHEASSESSEEALSOPROPOUNDSIMILARLEGAL; .IHAVEGONETHROUGHTHERECORDSINTHECASE.ITISNOTICEDTHATTHEAOHASNOT
• Assessee Lawyers: SHRID.MRINDANI
• Keywords: Depreciation

Judgement Text

आयकरअपीलीयअधिकरण , राजकोटनयायपीी INTHEINCOMETAXAPPELLATETRIBUNAL, RAJKOTBENCH,RAJKOT (ConductedthroughVirtualCourt) BEFORESHRIWASEEMAHMED,ACCOUNTANTMEMBER And SHRITRSENTHILKUMAR,JUDICIALMEMBER आयकरअपीलसं ./ITANo.157/RJT/2022 धििाधरणणवध / Asstt.Year:2012-2013 M/sRajmotiRoadMovers, AmbujaNagar, KodinarVeravalHighway, Gujarat-362720. PAN:AAHFR2912D Vs.ThePrincipalCommissioner ofIncomeTax-1, Rajkot. (Applicant)(Respondent) Assesseeby:ShriD.MRindani,A.R Revenueby:ShriShramdeepSinha,CIT.DR सुिणाईकीतारीख /DateofHearing:25/01/2024 घोवणाकीतारीख /DateofPronouncement:07/02/2024 आदेश /ORDER PERWASEEMAHMED,ACCOUNTANTMEMBER: Thecaptionedappealhasbeenfiledattheinstanceoftheassesseeagainst theorderoftheLd.PrincipalCommissionerofIncomeTax-1,Rajkotarisinginthe matterofassessmentorderpassedunderSection263oftheIncomeTaxAct, 1961(here-in-afterreferredtoas"theAct")relevanttotheAssessmentYear 2012-13. 2.TheonlygrievanceraisedbytheassesseeisthattheLd.PCITu/s263of theActhasheldtheassessmentorderpassedbytheAOaserroneousinsofar prejudicialtotheinterestofrevenueu/s263oftheAct. ITANo.157/Rjt/2022 A.Y.2012-13 2 3.Thenecessaryfactsarethattheassesseeinthepresentcase,a partnershipfirm,isengagedinthebusinessoftransportationofgoods.The assesseefileditsoriginalreturnofincomedated22/12/2012,declaringanincome atRs.2,53,12,550/-onlywhichwasprocessedu/s143(1)oftheAct.Thereafter, thecaseoftheassesseewasselectedforscrutinyandthereforeanoticevide letterdated10/12/2013,wasissuedupontheassesseeu/s143(2)oftheAct. Duringtheassessment,thegrossprofitwasestimatedatRs.2,86,52,160/-being 3.40%ofthenetreceiptRs.1,39,15,04,986/-onlywhichresultedinanadditionof Rs.33,39,612/-tothetotalincomeoftheassesseevideorderdated23/02/2015 passedu/s143(3)oftheAct. 3.1Subsequently,theproceedingsu/s147oftheActwereinitiatedonaccount ofescapementofincomebyissuingnoticeu/s148oftheAct,dated27/03/2019. Theproceedingsu/s147oftheActwereinitiatedonaccountofmismatchinthe advancefreightchargespaidbytheassesseevis-a-vissuchadvancefreight chargesshownunderthebalancesheet.However,theAOafternecessary verificationacceptedtheincomeoftheassesseecomputedbytheAOinthe assessmentframedu/s143(3)oftheActatRs.2,86,52,160/-videorderdated 18/12/2019.Later,theLd.PCITonverificationoftheassessmentrecords observedcertaindefectsintheincomeescapingassessmentorderdated 18/12/2019whichareenumeratedasunder: I.Basedonthedifferentledgersoffreightadvances,itwasnoticedthatthe totalfreightadvancesstandatRs.3,03,89,600/-ason31/03/2012,whereas inthefinancialstatementason31/03/2012,suchadvanceswereshownatRs. 20,45,967/-only.However,suchamismatchintheamountoffreight advanceswasnotexaminedbytheAOduringtheassessmentproceedings. II.Therewerecertainpaymentsmadeincashincontraventiontothe provisionofsection40A(3)oftheAct,whichwererequiredtodisallowedbut ITANo.157/Rjt/2022 A.Y.2012-13 3 theAOfailedtodosointheassessmentframedu/s147r.w.s143(3)ofthe Act. III.Oneofthepartners,namelyShriRavibhaiDipsinhSolankiholding 16%sharesintheprofithasshownhisshareofprofitintheassesseefirmof Rs.3,48,14,330/-asevidentfromtheletteroftheADIT.Accordingly,the profitofthefirmwasworkedoutatRs.21,75,89,563/-beingtheRs. 3,48,14,330/-X100dividedby16,whereastheassesseehasshownprofitat Rs.2,57,77,426/-onlyintheincometaxreturnfortheyearunder consideration.Thus,theLd.PCITwasoftheviewthattheassesseehas shownlessprofitbytheamountRs.19,23,12,137/-(217589563-25277426). However,thisfacthasnotbeenverifiedbytheAOduringtheassessment proceedings.Theld.PCITfurtherobservedthatitmightbepossiblethatthis issuehasbeenomittedtobeincludedinthereasonofreopeningof assessmentu/s147oftheAct. IV.TherewerecertainoutstandingsundrycreditorsofRs.2,60,68,710/- shownason31.03.2012asdoubtful.Butthesamehasnotbeenverifiedby makinganyindependentinquiries. 3.2Inviewoftheabove,theld.PCITproposedtoholdtheassessmentorder framedu/s147r.w.s143(3)oftheActvideshowcausenoticedated05/01/2022 issuedu/s263oftheAct.However,therewasnoresponsefromthesideofthe assessee.Accordingly,theLd.PCITheldtheassessmentorderaserroneousinso farprejudicialtotheinterestoftherevenuebyobservingasunder: 11.Ihavegonethroughtherecordsinthecase.ItisnoticedthattheAOhasnot examinedalltheaboveissuesinthereassessmentproceedingswhichresultedintolackof enquiryduetononapplicationofmindontheapplicationoftheprovisionsoflaw.TheAO hasnotexaminedthedifferenceofthecementfreightinadvanceandflyashsilica,lignite, CFLadvanceinspitethefactthattherewashugedifferenceintheledgeraccount.Similarly, theAOhasnotexaminedthetransactionsshownbytheassesseeinthebooksofaccounts towardscashpaymentsaboveRs.35,000/-inrespectofvariousfreightaccountsviolating theprovisionsofsection40A(3)ofITActasdiscussedintheprecedingparas.Further,the AOhasalsofailedtoconsidertheenquiryreportreceivedinthecasethattheassesseehas shownlessprofittothetuneofRs.19,23,12,137/-basedupontheinformationof16% shareofoneofthepartnersnamelyShriRavinbhaiDSolankiinthefirm.Thisshowsthat ITANo.157/Rjt/2022 A.Y.2012-13 4 theassesseefirmhadthetotalprofitsofRs.21,75,89,563/-whileithasdeclaredthe profitofRs.2,52,77,426/-inthereturnofincome.Similarly,theAOhasalsonotexamined thegenuinenessofthesundrycreditorsshownoutstandingason31-03-2012which appearedtobedoubtful. 12.Inviewoftheabovediscussion,itisapparentthatAOhasnotproperlyexaminedthe factsofthecaseandignoredtheverificationsasdesiredonthefactsofthecaseinviewof theaforesaidissues.Thishasrenderedtheordererroneousaswellasprejudicialtothe interestoftherevenue.Itmaybementionedthattwoessentialsconditionforinvokingthe provisionsofsection263ofI.T.ActarethattheorderpassedbytheAOiserroneousand prejudicialtotheinterestofrevenue. 13.Inviewoftheabovediscussionitisapparentthatsuchcaseswheretheassessment hasbeencompletedwithoutconductinganyinquiries/verificationorincorrectapplication oflawtantamounttoerroneousordersasalsoorderprejudicialtotheinterestofRevenue. ************************************************************************* 17.ItistheboundendutyoftheAssessingOfficertocollectandappreciatethefacts collectedandproperapplicationoflawistobemadewhilemakingtheassessment.There isincorrectapplicationoflawbyallowingdeductioncontrarytotheprovisionsofIncome TaxAct.Intheinterestofjusticeandsincethetwinconditions,namely,(i)theorderof theAssessingOfficersoughttoberevisediserroneousand(ii)itisprejudicialtothe interestsoftherevenue,aresatisfied,theassessmentorderpassedu/s.143(3)needsto besetasideforthediscussionmadeabove. 18.Itmaybementionedthatwitheffectfrom01.06.2016,Explanation2tothe section263(1)hasbeeninsertedwhichreadsasunder: "Explanation2.-Forthepurposesofthissection,itisherebydeclaredthatanorderpassed bytheAssessingOfficershallbedeemedtobeerroneousinsofarasitisprejudicialtothe interestsoftherevenue,it,intheopinionofthePrincipalCommissionerorCommissioner- (a)Theorderispassedwithoutmakinginquiriesorverificationwhichshouldhavebeen made; (b)Theorderispassedallowinganyreliefwithoutinquiringintotheclaim; (c)Theorderhasnotbeenmadeinaccordancewithanyorder,directionorinstruction issuedbytheBoardundersection119;or (d)Theorderhasnotbeenpassedinaccordancewithanydecisionwhichisprejudicialto theassessee,renderedbythejurisdictionalHighCourtorSupremeCourtinthecaseofthe assesseeoranyotherperson. 19.AspertheExplanation2,theorderpassedbytheAssessingOfficershallbedeemedto beerroneousinsofarasitisprejudicialtotheinterestoftherevenueiftheorderis passedallowinganyreliefwithoutInquiringintotheclaim.However,theAOdidnot conductanysuchinquiriesorverificationasoutlinedaboveandsimplyacceptedthe assessee'ssubmission.Inthismannertheassessee'scaseisalsocoveredunderpara'a'of Explanation2,ofsection263(1)ofI.T.ActThereforetheorderpassedbytheAOis erroneousandprejudicialtotheinterestofrevenuetothatextent. 20.Keepinginviewthesefacts,Iamoftheconsideredviewthatthisisafitcasefor invokingsection263ofI.T.Actasthetwinconditionsnamely,(i)theorderofthe AssessingOfficersoughttoberevisediserroneous;and(li)itisprejudicialtotheinterests ITANo.157/Rjt/2022 A.Y.2012-13 5 oftherevenuearesatisfied.TheAOisdirectedtomakefreshassessmentkeepinginview theobservationsmadeabove,afterconductingnecessaryverificationsandinquiriesand afterprovidingproperopportunityofbeingheard. 4.BeingaggrievedbytheorderoftheLd.PCIT,theassesseeisinappeal beforeus. 5.TheLd.ARbeforeusfiledapaperbookrunningfrompages1to269and submittedthatalltheledgercopiesrepresentingtheadvancefreightchargespaid werefurnishedduringtheassessmentproceedingswhichareplaceonpages19to 226.AspertheLd.ARtheadvancesgivenundertheheadfreightadvanceswere adjustedbymakingaccountingentrieswhichcanbeverifiedfromtheledger accountplacedonrecordandthereforetheonlybalanceamountleftasonthe balancesheetdatei.e.31/12/2012,wasonlyreflectedinthebalancesheetwhich wasmatchingwiththecorrespondingledger.However,theLd.PCITwithout referringtothecreditentriesappearinginthefreightadvancesledgerhasdrawn conclusionthattheassesseehasshownfreightadvanceatthelowerinthe balancesheetason31/03/2012.AspertheARtheseadvancesshownunderthe headfreightadvancecannotmatchwiththefinancialstatementason31.03.2012, forthereasonthatsuchadvancehasbeenadjustedagainsttheactualfreight expenses. 6.Besides,theabovetheLd.ARalsocontendedthatthere-openingwas madeu/s147oftheAct,onthereasonofbeingmismatchintheledgeroffreight advancesvis-a-visthebalanceshowninthefinancialstatement,butnoaddition wasmadebytheAOafterduenecessaryverification.Therefore,theassessment ordercannotberevisedonaccountofnon-verificationu/s263oftheAct, otherwiseitwillleadtoachangeofopinion. 7.FortheremainingdefectsaspointedoutbytheLd.PCIT,theLd.AR submittedthereopeningu/s147oftheAct,wasdoneforthelimitedpurposei.e. mismatchinthefreightadvanceaccountsandtheAOduringtheincomeescaping ITANo.157/Rjt/2022 A.Y.2012-13 6 proceedingsdidnotnoticeanyotherincomechargeabletotaxwhichhasescaped assessment.Assuch,theAOwassatisfiedwiththeincomeassessedu/s143(3)of theAct,videorderdated23-02-2015andtherefore,hedidnotextendthescope ofre-assessmentproceedingsbeyondthereasonsrecorded.Thus,theLd.PCIT cannotexpandthescopeoftheassessmentundersection147oftheActby exercisingjurisdictionu/s263oftheAct. 8.Withoutprejudicetotheabovetheld.ARalsosubmittedthatduringthe originalassessmentproceedings,theAOhasverifiedtheprovisionsofsection 40A(3)oftheAct,andthereforeitcannotbesaidthattherewasnoapplicationof mindonthepartoftheAO. 9.Ontheotherhand,theLd.DRcontendedthattheLd.PCIThasissued severalnoticesduringtheproceeding’su/s263oftheAct,buttherewasno compliancemadebytheassessee.Therefore,herequestedustorestoretheissue tothefileoftheLd.PCITforfurthernecessaryverificationaspertheprovisionsof law.TheLd.DRfurthersubmittedthatthereisnodamage/harmtotheassessee toexplainthefactsofthecaseaspointedoutbyhimbeforetheITAT.TheLd.DR vehementlysupportedtheorderoftheauthoritiesbelow. 10.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.Fromtheprecedingdiscussion,wenotethatthe assessmentframedbytheAOu/s147r.w.s.143(3)oftheActhasbeenheldas erroneousinsofarprejudicialtotheinterestofRevenueonaccountofvarious countsbuttotheextentofnon-verification/non-applicationofmindbytheAO.All thenecessarydetailshavebeenelaboratedintheprecedingparagraphand thereforewearenotinclinedtorepeatthesameforthesakeofconvenienceand brevity. 10.1Asregardstothenon-verification/mismatchingintheamountoffreight advancesvis-a-visfreightchargesshowninthebalancesheetason31/03/2012, ITANo.157/Rjt/2022 A.Y.2012-13 7 wenotethattheAOhasverifiedthenecessarydetailsduringtheincomeescaping proceedingsandreachedtotheconclusionthatthereisnomismatchinthe amountoffreightadvancesshownintheledgervis-a-visshowninthebalance sheetrequiringanyaddition.Therelevantextractoftheassessmentorderframed u/s.147r.w.s.143(3)oftheAct,dated18/12/2019whichreadasunder: Lateron,departmentcametonoticethatduringtherelevantpreviousyearthatcement FreightPaidandAdvancesandFlyasSilikaLignightCFLadvancearenotreflectedin assessee’sbalancesheet/booksofaccountsandhencethesameisunexplained.Inviewof thesefacts,thecasewasreopenedu/s.147oftheI.TActafterrecordingthereasonsand obtainingtherequisiteapprovalofthePr.CommissionerofIncome-tax-3,Rajkot. 2.E-Noticeu/s.148oftheI.TActdated27.03.2019wasissuedanddulyservedupon theassessee.InresponsetheretotheassesseeE-fileditsreturnofncomeon18.04.2019 declaringthereintotalincomeofRs.2,53,12,550/-Noticeu/s.143(2)oftheI.Taxwas issuedon14.05.2019whichwasdulyservedupontheassessee.Reasonforre-opening theassessmentwasalsosuppliedtotheassessee.E-noticeu/s.142(1)oftheITaxAct wasissuedon04.11.2019whichwasdulyservedupontheassessee.AnotherE-notice u/s.142(10oftheI.TaxActwasissuedon04.11.2019on04.11.2019whichwasduly servedupontheassesee.Inresponsethereto,assesseefiledE-submissions/details. 10.2Fromtheabove,thereremainsnoambiguitytothefactthattheAOhas appliedhismindduringtheassessmentproceedingsandthereforeassessment ordercannotbeheldaserroneousinsofarprejudicialtotheinterestofrevenue onaccountofnon-verification.Inholdingso,wedrawsupportandguidancefrom thejudgmentofHon’bleGujaratHighCourtinthecaseofDesignmateIndia(P.) Ltd.v.CommissionerofIncome-taxreportedin85taxmann.com204wherein itwasheldasunder: 9.ItisundoubtedlytruethattheCommissioner'ssuomotupowerofrevisionflowingfrom section263oftheActarehedgedbythesatisfactionoftwinconditionsoftheorderofthe AssessingOfficerbeingerroneousandprejudicialtotheinterestoftheRevenueandin thatscene,thesamecannotbeequatedwiththeappellatejurisdiction.Itistruethatthe judicialtrendssuggestthatwhentheAssessingOfficerhasconductedproperinquiriesand cometoconclusionwhichisaplausibleone,theCommissionerwouldnotbejustifiedin substitutingsuchaviewoftheAssessingOfficerbyhisviewasifhewereactingasan appellateauthority. 10.3Onmeritofthecase,wehaveperusedthecopyoftheledgerunderthe headCementFreightpaidadvanceplacedonpages58to65ofthepaperbook andnotethattheentireamountofsuchadvancewasadjustedagainstthecement freightexpensesandtherefore,noclosingbalanceshownagainstsuchcement ITANo.157/Rjt/2022 A.Y.2012-13 8 freightpaidadvanceinthebalancesheet.Assuch,whatwefindisthisthattheLd. PCIThasreferredtothecementfreightpaidadvancesledgershowingunderthe debitcolumnafterignoringcreditshownundersuchadvanceledger.Assuch,the Ld.PCITafterignoringthecreditentriesinsuchledgerhaswronglyassumedthat theadvancesshownunderthedebitcolumnshouldmatchwiththeadvances showninthebalancesheetason31/03/2012.However,wefindthatthe approachadoptedbytheLd.PCITwaserroneousashecannotpickandchoose onlydebitsideofledgerafterignoringcreditentriesshowninsuchledgeraccount. Inviewoftheabove,wedis-agreewiththefindingsoftheLd.PCIT. 10.4ComingtotheremainingdefectsaspointedoutbytheLd.PCIT,inthis regardweobservethattheprovisionofsection147oftheActprovides,as applicabletotheyearunderconsideration,thattheproceedingsu/s147oftheAct, canbeinitiatediftheAOhasreasontobelievethatanyincomechargeabletotax hasescapedassessmentandhemayalsotakeintoconsiderationanyother incomechargeabletotaxbutescapedassessmentduringtheproceedings.This canbebetterunderstoodthroughanexample,assumingtheAOhasreasonto believethattheassesseehasclaimedboguspurchasesinthereturnofincome, thushecanreopenthecaselimitedtotheextentofboguspurchase.However,if duringthecourseofassessmentproceedings,hecomestoknowaboutother expensesforexampletravellingexpensesi.e.theassesseehasclaimedtravelling expenseswhichwerenotforthepurposeofthebusiness,he(theAO)canalso makethedis-allowanceoftravellingexpensesaswell.However,inasituation, wheretheAOdoesnotmaketheadditionofboguspurchase,thenhecouldnot makeanyotheraddition.Thisaspecthasbeensettledbytheseriesofjudgments. TheHon’bleBombayHighCourtinthecaseofCITVs.JetAirways(I)Pvt.Ltd. reportedin331ITR296hasheldasunder: TheShorterOxfordDictionarydefinestheexpression"also"tomean'further,inaddition, besides,too'.Thewordhasbeentreatedasbeingrelativeandconjunctive.Evidently, therefore,whatParliamentintendsbyuseofthewords"andalso"isthattheAssessing Officer,upontheformationofareasontobelieveundersection147andtheissuanceofa noticeundersection148(2)mustassessorreassess:(i)'suchincome';andalso(ii)any otherincomechargeabletotaxwhichhasescapedassessmentandwhichcomestohis noticesubsequentlyinthecourseoftheproceedingsunderthesection.Thewords'such ITANo.157/Rjt/2022 A.Y.2012-13 9 income'refertotheincomechargeabletotaxwhichhasescapedassessmentandin respectofwhichtheAssessingOfficerhasformedareasontobelievethatithasescaped assessment.Hence,thelanguagewhichhasbeenusedbyParliamentisindicativeofthe positionthattheassessmentorreassessmentmustbeinrespectoftheincomeinrespect ofwhichhehasformedareasontobelievethatithasescapedassessmentandalsoin respectofanyotherincomewhichcomestohisnoticesubsequentlyduringthecourseof theproceedingsashavingescapedassessment.Iftheincome,theescapementofwhich wasthebasisoftheformationoftheseasontobelieveisnotassessedorreassessed,it wouldnotbeopentotheAssessingOfficertoindependentlyassessonlythatincome whichcomestohisnoticesubsequentlyinthecourseoftheproceedingsunderthesection ashavingescapedassessment.Ifupontheissuanceofanoticeundersection148(2),the AssessingOfficeracceptstheobjectionsoftheassesseeanddoesnotassessorreassess theincomewhichwasthebasisofthenotice,itwouldnotbeopentohimtoassess incomeundersomeotherissueindependently.Parliamentwhenitenactedtheprovisions ofsection147witheffectfrom1-4-1989clearlystipulatedthattheAssessingOfficerhasto assessorreassesstheincomewhichhehadreasontobelievehadescapedassessment andalsoanyotherincomechargeabletotaxwhichcametohisnoticeduringthe proceedings.Intheabsenceoftheassessmentorreassessmentoftheformer,hecannot independentlyassessthelatter. 10.5Atthisjuncture,weareinclinedtorefertheprovisionofsection147ofthe Act,whichreadsasunder: 147.IftheAssessingOfficerhasreasontobelievethatanyincomechargeabletotaxhas escapedassessmentforanyassessmentyear,hemay,subjecttotheprovisionsofsections 148to153,assessorreassesssuchincomeandalsoanyotherincomechargeabletotaxwhich hasescapedassessmentandwhichcomestohisnoticesubsequentlyinthecourseofthe proceedingsunderthissection,orrecomputethelossorthedepreciationallowanceorany otherallowance,asthecasemaybe,fortheassessmentyearconcerned(hereafterinthis sectionandinsections148to153referredtoastherelevantassessmentyear): 10.6AnanalysisoftheaboveprovisionrevealsthattheAOcertainlycantouch otherissues/incomechargeabletotaxwhichhasescapedassessmentotherthan thoseincome/issuesbasedonwhichproceedingsu/s147oftheAct,were initiated.Thecontroversyariseswhowillacquirethesatisfactionasprovided undertheprovisionof147oftheAct.Toourunderstanding,itisthesatisfaction oftheAOwhocantouchtheissueswhichcametohis/hernoticeduringthe proceedingundersection147oftheActbutsamewasnotsubjectmatterof reopeningoftheassessmentu/s147oftheAct.Inotherwords,theLd.PCIT cannotgototouchthoseissueswithrespecttowhichtheAOwassatisfiedinthe proceeding’su/s147oftheAct,andthereforehechoosesnottotouchthose otherissues.Inholdingso,wealsodrawsupportandguidancefromtheorderof CoordinatebenchofMumbaiTribunalincaseofRoyalWesternIndiaTurfClubVs. ITANo.157/Rjt/2022 A.Y.2012-13 10 PCITinITANo.640/MUM/2021whereinthebenchvideorderdated12-10-2021 heldasunder: 9.Areadingofsection147oftheActmakesitclearthattheassessingofficer,incourseof proceedingsunderthesaidprovisioncannotonlyassess/reassesstheescapedincomebased onwhichtheassessmentwasreopened,butcanalsoassessanyotherincomechargeableto taxwhichhasescapedassessmentandwhichcomestohisnoticesubsequentlyinthecourseof proceedingsundertheaforesaidprovision.Explanation3tosection147oftheActfurther clarifiesthesubstantiveprovisionbysayingthattheassessingoffice,incourseofproceedings underthesaidprovisioncannotonlyassess/re-assesstheescapedincomebasedonwhichthe assessmentwasreopened,butcanalsoassessanyotherincomechargeabletotaxwhichhas escapedassessmentandwhichcomestohisnoticesubsequentlyinthecourseofproceedings undertheaforesaidprovision,notwithstandingthatsuchissuedoesnotformpartofreasons recordedforreopeningofassessment.Thus,onaholisticreadingofsection147oftheActit becomesverymuchclearthatalongwithescapedincomeforwhichtheassessmentwas reopened,theassessingofficercanassessotherescapedincomewhichsubsequentlycomesto hisnoticeincourseofre-assessmentproceedings.Inthefactsofthepresentcase, undisputedly,theissuesraisedbylearnedPCITneitherwerethesubjectmatterofreopening asperreasonsrecorded,nordidsuchmattercometothenoticeoftheassessingofficerin courseofre-assessmentproceedings. 10.Thereopeningofassessmentascontemplatedundersection147oftheActisforthe specificpurposeofassessingtheescapedincome.Therefore,inareassessmentproceeding, theassessingofficercanonlyassessthatincomewhichhasescapedassessment.Theincome whichissubjectmatterofassessmentintheoriginalassessmentproceedingsorwhichwasin thedomainoftheassessingofficerincourseoforiginalassessmentproceedingscertainly cannotbeconsideredinthere-assessmentproceedings.Inourview,ifatall,anyorderwhich canbeconsideredtobeerroneousandprejudicialtotheinterestofrevenuefornon considerationoftheissuesraisedbylearnedPCIT,certainly,ithastobetheoriginal assessmentorderpassedundersection143(3)oftheActandnotthere-assessmentorder passedundersection143(3)r.w.s.147oftheAct.Therefore,learnedPCITcouldhave exercisedherpowersundersection263oftheActonlyinrespectoftheoriginalassessment orderpassedundersection143(3)oftheAct.Atthisstage,wemayrefertothefollowing observationsoftheHon’bleSupremeCourtincaseofCITvsAlagendranFinanceLtd(supra): **** 12.Theotherdecisionscitedbylearnedcounselfortheassesseealsopropoundsimilarlegal principle.Thus,inourview,theoriginalassessmentorderhavingbeenpassedon06-02-2014, theimpugnedorderpassedundersection263oftheActisbarredbylimitationinviewof section263(2)oftheAct.Atthisstage,weconsideritourdutytodealwiththesubmissionsof learneddepartmentalrepresentativethattheassesseedidnotrepresentitscasebeforelearned PCITanddidnotraisetheissueoflimitation.Onperusalofrecords,itisseenthatlearnedPCIT issuedtheshowcausenoticeundersection263oftheActon08-03-2021andpassedthe impugnedorderon19-03-2021withunduehaste.Infact,theassesseehasraisedspecific groundsbeforeus,beinggrounds8and9,totheeffectthatneitherhearingnoticewasissued totheassesseenoranyopportunityofbeingheardwasprovided.Thus,wedonotfindmeritin thesubmissionsoflearneddepartmentalrepresentative. 10.7Accordingly,weareoftheviewthattheLd.PCITinthegivencasehas exceededhisjurisdictionbydirectingtheAOtomaketheaddition/disallowanceof theotheritemsasdiscussedabove. ITANo.157/Rjt/2022 A.Y.2012-13 11 10.8Admittedly,theassesseedidnotappearbeforetheld.PCIT,yettheld. PCIThastopasstheorderwithintheframeworkofthelaw.Inthepresentcase theld.PCIThaspickeduppartoftheinformationfromtheledgercopydiscussed abovetoholdtheorderoftheAOaserroneousinsofarprejudicialtotheinterest oftherevenue.Inourconsideredview,suchbasisisnotpermissibleunderthe provisionoflaw.Thus,weholdthattheorderoftheLd.PCIT,isnotsustainable andaccordinglywequashthesame.Hence,thegroundofappealoftheassessee isherebyallowed. 11.Intheresulttheappealoftheassesseeisallowed. OrderpronouncedintheCourton07/02/2024atAhmedabad. Sd/-Sd/- (TRSENTHILKUMAR)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated07/02/2024 Manish,Sr.PSTRUECOPY