ACIT, CHENNAI V. Gimpex Limited, CHENNAI

ITA 2642/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96286 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-09-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 20-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: D ANAND
• Keywords: Reopening of assessment; Gift; Retrospective amendment; Reason to believe; Reassessment proceedings
• Section: 143(3); 80HHC; 148; 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . , ! # , $ & BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NOS.2641 & 2642/MDS/2014 ( / ASSESSMENT YEARS: 2000-01 & 2001-02) ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-II(2), ROOM NO.512, WANAPARTHY BLOCK, 121, MG ROAD, CHENNAI - 34. VS M/S.GIMPEX LTD. GIMPEX HOUSE, 181, LINGHI CHETTY STREET, CHENNAI-600 001. PAN:AAACG2482P ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.A.B.KOLI, JCIT /RESPONDENT BY : MR.D.ANAND, ADVOCATE /DATE OF HEARING : 15 TH SEPTEMBER, 2015 /DATE OF PRONOUNCEMENT : 29 TH OCTOBER, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: BOTH THESE APPEALS ARE FILED BY THE REVENUE AGAINS T THE COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 15.05.2014 FOR THE ASSESSMENT YEAR S 2000- 01 AND 2001-02 . 2. THE REVENUE IS CHALLENGING THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) ON THE FOLLOWI NG GROUNDS:- THE COMMISSIONER OF INCOME TAX (APPEALS) WHILE UPHOLDING THE REOPENING OF ASSESSMENT FAILED TO APPRECIATE THAT EXPLANATION 3 OF SECTION 2 ITA NOS. 2641 & 2642/MDS/2014 147 INSERTED BY FINANCE ACT, 2009 WAS RETROSPECTIVE W.E.F. 01.04.1989 AND EMPOWERS THE ASSESSING OFFICER TO ASSESS OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE, WHICH HAS ESCAPED ASSESSMENT AND SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF PROCEEDINGS UNDER THIS SECTION NOTWITHSTANDING THAT THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REASONS RECORDED UNDER SUBSECTION (2) OF SECTION 148. THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE CONSIDERED THE DECISION IN THE CASE OF CONTEL MEDICAL SYSTEMS P.LTD. REPORTED IN 349 ITR 649(DEL) AND IN THE CASE OF SHUMANA SEN VS. CIT REPORTED IN 356 ITR 291(DEL). THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE GONE INTO THE MERITS OF THE ADDITIONS AND REASONS GIVEN THEREIN BY THE ASSESSING OFFICER. 3. THE ASSESSEE IS INTO THE BUSINESS OF SUPPLY OF M ATERIALS FILED RETURNS OF INCOME FOR THE ASSESSMENT YEARS 20 00-01 AND 2001-02 ON 28.11.2000 AND 24.10.2001 ADMITTING INC OME OF ` 1,62,30,739/- AND ` 2,74,79,516/- RESPECTIVELY. IN BOTH THESE ASSESSMENT YEARS, THERE WAS NO SCRUTINY ASSE SSMENT UNDER SECTION 143(3) OF THE ACT. THE RETURNS WERE PROCESSED UNDER SECTION 143(1) ON 04.03.2002 AND 28.02.2003 RESPECTIVELY. LATER ASSESSMENTS WERE REOPENED UNDE R SECTION 147 OF THE ACT AND ASSESSMENTS WERE COMPLE TED ON 28.12.2007 BY MAKING CERTAIN ADDITIONS/DISALLOWANCE S. ON 3 ITA NOS. 2641 & 2642/MDS/2014 APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) HELD T HAT REASSESSMENTS WERE BAD IN LAW FOR THE REASON THAT A DDITIONS AND DISALLOWANCES MADE IN THESE TWO ASSESSMENTS W ERE NOT FOR THE REASONS ON WHICH THE ASSESSMENTS WERE REOPENED. THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT REASON FOR REOPENING OF BOTH THESE ASSESSMENTS IS TO DISALLOW CERTAIN ILLICIT PAYMENTS SAID TO HAVE BEEN MADE BY THE ASSESSEE IN THE PROCESS OF SUPPLY OF MATERIALS UNDER OIL FOR FOOD PROGRAMME TO IRAQ. THE COMMISSIONER OF INC OME TAX (APPEALS) ON EXAMINING THE REASONS RECORDED FO R REOPENING OF ASSESSMENTS FOUND THAT WHILE COMPLETIN G THE REASSESSMENTS NO ADDITION WAS MADE IN RESPECT OF TH E REASONS MENTIONED FOR REOPENING OF ASSESSMENTS AND THE ADDITIONS/DISALLOWANCES WERE MADE FOR OTHER THAN TH E REASONS APPEARING IN THE NOTICE FOR REOPENING OF ASSESSMENTS. THEREFORE, COMMISSIONER OF INCOME TAX (APPEALS) FOLLOWING THE DECISION OF BOMBAY HIGH COU RT IN THE CASE OF CIT VS. JET AIRWAYS LTD. (331 ITR 236) AND ALSO THE DECISION OF DELHI HIGH COURT IN THE CASE OF RANBAXY LABORATORIES LTD. VS. CIT (336 ITR 136) HELD THAT REASSESSMENTS ARE BAD IN LAW. 4 ITA NOS. 2641 & 2642/MDS/2014 4. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTS THE ORDER OF THE ASSESSING OFFICER IN REOPENING THE ASS ESSMENTS AND MAKING VARIOUS ADDITIONS/DISALLOWANCES. DEPART MENTAL REPRESENTATIVE SUBMITS THAT COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN HOLDING THAT REASSES SMENTS ARE BAD IN LAW. 5. COUNSEL FOR THE ASSESSEE STRONGLY PLACES RELIANC E ON THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S) AND SUBMITS THAT REOPENING OF ASSESSMENTS WAS NOT BASED ON THE REASONS STATED IN THE NOTICE AND ALL THE ADDITIONS/DISALLOWANCES WERE MADE OTHER THAN THOSE REASONS MENTIONED IN THE NOTICE, HENCE REASSESSMENT S ARE BAD IN LAW. HE PLACES RELIANCE ON THE DECISION OF B OMBAY HIGH COURT IN THE CASE OF CIT VS. JET AIRWAYS LTD. (SUPRA) AND THE DECISION OF DELHI HIGH COURT IN THE CASE OF RANBAXY ( LABORATORIES LTD. VS. CIT (SUPRA). 6. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES AND THE DECISIONS RELIED ON. THE ISSUE IN THE APPE ALS HAS BEEN ELABORATELY CONSIDERED BY THE COMMISSIONER OF INCOME TAX (APPEALS) WITH REFERENCE TO THE REASONS RECORD ED FOR 5 ITA NOS. 2641 & 2642/MDS/2014 REOPENING OF ASSESSMENTS AND CASE LAWS AND HELD TH AT REASSESSMENTS ARE BAD IN LAW FOR THE REASON THAT AS SESSING OFFICER HAS NOT MADE ANY ADDITION IN RESPECT OF THE REASONS MENTIONED IN THE NOTICE BUT TRAVELLED BEYOND THE RE ASONS STATED IN THE NOTICE AND MADE SOME ADDITIONS/DISALL OWANCES OTHER THAN THOSE MENTIONED IN THE NOTICE FOR REOPEN ING OF ASSESSMENTS. WHILE HOLDING SO, THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED AS UNDER:- 4.1.6 THUS, THE CRUCIAL ISSUE IN THE. PRESENT TWO APPEALS IS WHETHER THE ASSESSING OFFICER HAS JURISDICTION TO A SSESS ANY OTHER SUMS WHICH MAY COME TO HIS NOTICE, SUBSEQUENTLY DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS, WHEN THE ASSESSING OFFICER IS NOT MAKI NG ANY ASSESSMENT OF INCOME IN RESPECT OF ANY OF THE I SSUES WHICH FORMED PART OF REASONS RECORDED FOR RE-OPENIN G THE ASSESSMENTS U/S.147 OF THE ACT. THE CRUX OF SECTION 147 IS THE ESCAPEMENT OF INCOME WHICH MAY BE ASSESSED OR REASSESSED AS' WELL AS ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPE D ASSESSMENT AND WHICH COMES TO THE NOTICE OF THE ASSESSING OFFICER SUBSEQUENTLY IN THE COURSE OF PROCEEDINGS UNDER THIS SECTION. EXPLANATION 3 OF SE CTION 147 MAKES IT CLEAR THAT THE ASSESSING OFFICER MAY A SSESS OR REASSESS THE INCOME IN RESPECT OF ISSUE WHICH HAS ESCAPED ASSESSMENT, IF SUCH ISSUE COMES TO HIS NOTICE IN THE COURSE OF PROCEEDINGS UNDER THIS SECTION EVE N THOUGH SAID ISSUE DID NOT FIND 'MENTION IN THE REAS ONS RECORDED . AND THE NOTICE ISSUED UNDER SECTION 148. SINCE THERE WAS CONFUSION PREVAILING WITH REGARD TO THE P OWERS OF THE ASSESSING OFFICER TO ASSESS OR REASSESS ON T HE ISSUES FOR WHICH NO REASONS WERE RECORDED, THIS EXPLANATION CAME TO BE INSERTED AS CLARIFICATORY. 4.1.7 AFTER THE INSERTION OF EXPLANATION 3 TO SECTION 147 OF THE ACT, THE POSITION IS THAT THE ASSESSING OFFICER MAY ASSESS OR REASSESS INCOME IN RESPECT OF ANY ISSUE W HICH COMES TO HIS NOTICE, SUBSEQUENTLY, IN THE COURSE OF PROCEEDINGS UNDER SECTION 147, THOUGH THE REASONS F OR SUCH ISSUE WERE NOT INCLUDED IN THE REASONS RECORDE D IN 6 ITA NOS. 2641 & 2642/MDS/2014 THE NOTICE UNDER SECTION 148(2) ON THE BASIS OF WHICH H E HAD INITIATED PROCEEDINGS UNDER SECTION 147. 4.1.8 THE HEADING OF SECTION 147 IS 'INCOME ESCAPING ASSESSMENT' AND THAT -OF SECTION 148 IS '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 ISS UANCE 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 OF FICER 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 TAX. AS PER EXPLANATION 3 IF DURING T HE COURSE OF THESE PROCEEDINGS THE ASSESSING OFFICER C OMES TO CONCLUSION THAT SOME ITEMS HAVE ESCAPED ASSESSME NT, THEN NOTWITHSTANDING THAT THOSE ITEMS WERE NOT INCL UDED IN THE. REASONS TO BELIEVE AS RECORDED FOR INITIATI ON OF THE PROCEEDINGS AND THE NOTICE, HE WOULD BE COMPETE NT TO MAKE ASSESSMENT OF THOSE ITEMS. HOWEVER, THE LEGISLATURE COULD NOT BE PRESUMED TO HAVE INTENDED TO GIVE BLANKET POWERS TO THE ASSESSING OFFICER THAT O N ASSUMING JURISDICTION UNDER SECTION 147 REGARDING ASSESSMENT OR REASSESSMENT OF ESCAPED INCOME, HE WOULD KEEP ON MAKING ROVING INQUIRY AND THEREBY WOU LD INCLUDE DIFFERENT ITEMS OF INCOME NOT CONNECTED OR RELATED WITH THE REASONS TO BELIEVE, ON THE BASIS O F WHICH HE ASSUMED JURISDICTION. FOR EVERY NEW ISSUE COMING BEFORE THE ASSESSING OFFICER DURING THE COURSE OF PROCEEDINGS OF ASSESSMENT OR REASSESSMENT OF ESCAPE D INCOME, AND WHICH HE INTENDS TO TAKE INTO ACCOUNT, HE WOULD BE REQUIRED TO ISSUE A FRESH NOTICE UNDER SEC TION 148. 4.1.9 AS OBSERVED BY THE DIVISION BENCH OF BOMBAY HIGH COURT IN CI T V. JET AIRWAYS (I) LTD. (331 ITR 236) (BOM) , THE EFFECT OF SECTION 147 AS IT NOW STANDS AFTER THE AMENDMENT OF 2009 (WITH RETROSPECTIVE EFFECT FR OM 01.04.1989) CAN, THEREFORE, BE SUMMARISED AS FOLLOW S: (I) THE ASSESSING OFFICER MUST HAVE REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR; (II) UPON THE FORMATION OF THAT BELIEF AND BEFORE HE PROCEEDS TO MAKE AN ASSESSMENT, 7 ITA NOS. 2641 & 2642/MDS/2014 REASSESSMENT OR RECOMPUTATION, THE ASSESSING OFFICER HAS TO SERVE ON THE ASSESSEE A NOTICE UNDER SUB-SECTION (1) OF SECTION 148, (III) THE ASSESSING OFFICER MAY ASSESS OR REASSESS SUCH INCOME, WHICH HE HAS REASON TO BELIEVE, HAS ESCAPED ASSESSMENT AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THE SECTION; AND (IV) THOUGH THE NOTICE UNDER SECTION 148(2) DOES NOT INCLUDE A PARTICULAR ISSUE WITH RESPECT TO WHICH INCOME HAS ESCAPED ASSESSMENT, HE MAY NONETHELESS, ASSESS OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE, OF THE PROCEEDINGS UNDER THE SECTION.' WHILE DELIVERING THE ABOVE JUDGMENT, THE DIVISION BENCH OF BOMBAY HIGH COURT ALSO REFERRED TO THE INTERPRETATION GIVEN BY RAJASTHAN HIGH COURT IN THE CASE OF CIT V. SHRI RAM SINGH (306 ITR 343)(RAJ.) WHEREIN IT WAS OBSERVED AS UNDER:- .. IT IS ONLY WHEN, IN PROCEEDINGS UNDER SECTION 147 THE ASSESSING OFFICER, ASSESSES OR REASSESSES ANY INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, WITH RESPECT TO WHICH HE HAD 'REASON TO BELIEVE' TO BE SO, THEN ONLY, IN ADDITION, HE CAN ALSO PUT TO TAX, THE OTHER INCOME, CHARGEABLE TO TAX, WHICH HAS ESCAPED ASSESSMENT, AND WHICH HAS COME TO HIS NOTICE SUBSEQUENTLY, IN THE COURSE OF PROCEEDINGS UNDER SECTION 147. TO CLARIFY IT FURTHER, OR TO PUT IT IN OTHER WORDS, IN OUR OPINION, IF IN THE COURSE OF PROCEEDINGS UNDER SECTION 147, THE ASSESSING OFFICER WERE TO COME TO THE CONCLUSION, THAT ANY INCOME CHARGEABLE TO TAX, WHICH, ACCORDING TO HIS 'REASON TO BELIEVE' , HAD ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, DID NOT ESCAPE ASSESSMENT, THEN, THE MERE FACT THAT THE ASSESSING OFFICER ENTERTAINED A REASON TO BELIEVE, ALBEIT EVEN A GENUINE REASON TO BELIEVE, WOULD NOT CONTINUE TO VEST HIM WITH THE JURISDICTIO N, TO SUBJECT TO TAX, ANY OTHER INCOME, CHARGEABLE TO TAX, WHICH THE ASSESSING OFFICER MAY FIND TO HAVE ESCAPED ASSESSMENT, AND WHICH MAY COME TO HIS NOTICE SUBSEQUENTLY, IN THE COURSE OF PROCEEDINGS UNDER SECTION 147.' 8 ITA NOS. 2641 & 2642/MDS/2014 4.1.10 BASED ON THE ABOVE JUDGMENTS, THE HIGH COURT OF DELHI IN THE CASE OF RANBAXY LABORATORIES LTD V. CIT [2011](336 ITR 136)(DEL), HAS HELD THAT ONCE REASONS FOR INITIATION OF REASSESSMENT PROCEEDINGS CEASED TO SURVIVE, THE ASSESSING OFFICER WILL LOSE THE JUSTIFICATION TO ASSESSEE 'ANY OTHER INCOMES'. IN THIS CASE, THE ASSESSING OFFICER REOPENED THE ASSESSMENT FOR ASSESSING EXPENSES CLAIMED UNDER CLUB FEES, GIFTS AND PRESENTS AND PROVISION FOR LEAVE ENCASHMENT. HOWEVER, THE ASSESSING OFFICER IN HIS REASSESSMENT ORDER UJS.143(3) R.W.S.147, HAS NOT MADE ANY ASSESSMENT ON THESE ITEMS. INSTEAD, THE ASSESSING OFFICER REDUCED THE ASSESSEE'S CLAIMS OF DEDUCTIONS U/S.80HH AND 80-1. THE COURT HAS HELD THAT IN THE ABSENCE OF ANY ADDITIONS (ASSESSMENT) MADE ON THE ISSUES WHICH FORMED THE REASONS FOR REOPENING THE ASSESSMENT, THE ASSESSING OFFICER WILL NOT HAVE THE JURISDICTION TO ASSESS ANY OTHER INCOMES. THE HEAD NOTE OF THE JUDGMENT IS AS UNDER: RANBAXY LABORATORIES LTD V. CIT[2011] 336 ITR 136 (DELHI): SECTION 147 OF THE INCOME-TAX ACT, 1961 - INCOME ESCAPING ASSESSMENT - GENERAL - WHETHER IF DURING COURSE OF REASSESSMENT PROCEEDINGS, ASSESSING OFFICER COMES TO CONCLUSION THAT SOME ITEMS HAVE ESCAPED ASSESSMENT, THEN NOTWITHSTANDING THAT THOSE ITEMS WERE NOT INCLUDED IN REASONS TO BELIEVE AS RECORDED FOR INITIATION OF PROCEEDINGS AND NOTICE, HE WOULD BE COMPETENT TO MAKE ASSESSMENT OF THOSE ITEMS - HELD, YES- WHETHER, HOWEVER, LEGISLATURE COULD NOT BE PRESUMED TO HAVE INTENDED TO GIVE BLANKET POWERS TO ASSESSING OFFICER THAT ON ASSUMING JURISDICTION UNDER SECTION 147 REGARDING ASSESSMENT OR REASSESSMENT OF ESCAPED INCOME, HE WOULD KEEP ON MAKING ROVING INQUIRY AND THEREBY INCLUDING DIFFERENT ITEMS OF INCOME NOT CONNECTED OR RELATED WITH REASONS TO BELIEVE, ON BASIS OF WHICH. HE ASSUMED JURISDICTION - HELD, YES- WHETHER FOR EVERY NEW ISSUE COMING BEFORE ASSESSING OFFICER DURING COURSE OF PROCEEDINGS OF ASSESSMENT OR REASSESSMENT OF ESCAPED INCOME, AND WHICH HE INTENDS TO TAKE INTO ACCOUNT, HE WOULD BE REQUIRED TO ISSUE A FRESH NOTICE UNDER SECTION 148 - HELD, YES ASSESSING OFFICER REOPENED ASSESSEE'S ASSESSMENT ON GROUND THAT ITEMS, VIZ., CLUB FEES, 9 ITA NOS. 2641 & 2642/MDS/2014 GIFTS AND PRESENTS AND PROVISION FOR LEAVE ENCASHMENT HAD ESCAPED ASSESSMENT - DURING REASSESSMENT PROCEEDINGS, ASSESSING OFFICER WAS SATISFIED WITH JUSTIFICATIONS GIVEN BY ASSESSEE REGARDING AFORESAID ITEMS BUT FOUND DEDUCTION UNDER SECTIONS 80HH AND 80-J AS CLAIMED BY ASSESSEE TO BE NOT ADMISSIBLE - HE, CONSEQUENTLY, WHILE NOT MAKING ADDITIONS ON ITEMS OF CLUB FEES, GIFTS AND PRESENTS, ETC., REDUCED CLAIM OF DEDUCTION UNDER SECTIONS 80HH AND 80-J - WHETHER ASSESSING OFFICER HAD JURISDICTION TO REASSESS ISSUES OTHER THAN ISSUES IN RESPECT OF WHICH PROCEEDINGS WERE INITIATED - HELD, YES - WHETHER, HOWEVER, SINCE ASSESSING OFFICER HAD NOT MADE ANY DISALLOWANCE IN RESPECT OF ITEMS OF CLUB FEES, GIFTS AND PRESENTS AND, THUS, REASONS FOR INITIATION OF. REASSESSMENT PROCEEDINGS CEASED TO SURVIVE, THERE WAS NO JUSTIFICATION IN REDUCING CLAIM OF DEDUCTION UNDER SECTIONS 80HH AND 80-I - HELD, YES 4.1.11 THUS, FROM THE ABOVE JUDGMENTS AND THE PROVISIONS OF SECTIONS 147 AND 148, AS STOOD NOW, AT LEAST ONE ISSUE/ REASON, BASED ON WHICH THE ASSESSMENT IS REOPENED, SHOULD SURVIVE IN THE FINAL ASSESSMENT ORDER IN ORDER TO RETAIN THE JURISDICTION FOR COMPLETING THE REASSESSMENT. ONLY THEN THE ASSESSING OFFICER CAN PROCEED TO CONSIDER ANY OTHER ISSUE, WHICH MAY COME TO HIS NOTICE SUBSEQUENTLY DURING THE COURSE OF THE REASSESSMENT PROCEEDINGS, IN THE REASSESSMENT. ON THE CONTRARY, IF THE ASSESSING OFFICER FEELS THAT ALL THE ISSUES/ REASONS, BASED ON WHICH THE ASSESSMENT IS REOPENED, ARE SATISFIED IN FAVOUR OF THE ASSESSEE; OR FAILS TO MAKE ANY ASSESSMENT ON SUCH ISSUES/REASONS, THE ASSESSING OFFICER WILL CEASE TO HAVE THE JURISDICTION TO PROCEED WITH THE REASSESSMENT PROCEEDINGS AND CONSEQUENTLY CANNOT INCLUDE / CONSIDER ANY OTHER ISSUE (OTHER THAN THOSE RECORDED IN THE REASONS OF REOPENING) FOR REASSESSMENT. 4.1.12 IN THE PRESENT CASE, AS DETAILED ABOVE, THE PRESENT ASSESSMENTS ARE REOPENED FOR ASSESSING THE ALLEGED ILLICIT PAYMENTS OR KICK-BACKS PAID TO THE IRAQI GOVERNMENT UNDER THE 'OIL FOR FOOD PROGRAMME' REPORTED BY THE VOLKER COMMITTEE REPORT. HOWEVER, APPARENTLY SATISFIED WITH THE DETAILS/EXPLANATIONS FILED 10 ITA NOS. 2641 & 2642/MDS/2014 THE ASSESSEE, THE ASSESSING OFFICER HAS NOT ASSESSED ANY INCOME ON ACCOUNT OF THE ALLEGED ILLICIT PAYMENTS TO THE IRAQI GOVERNMENT UNDER THE 'OIL FOR FOOD PROGRAMME', IN HIS REASSESSMENT ORDERS U/S.143(3) R.W.S.147 OF THE ACT. THUS, HAVING NOT FOUND ANY ESCAPEMENT OF INCOME IN THE ISSUES, FOR THE ASSESSMENT IS REOPENED, AND HAS NOT MADE ANY ASSESSMENT ON SUCH ISSUES, THE ASSESSING OFFICER CEASED TO HAVE THE JURISDICTION FOR REASSESSMENTS U / S. 147 OF THE ACT. CONSEQUENTLY, THE ASSESSING OFFICER'S ACTION OF REASSESSMENTS, BY CONSIDERING OTHER ISSUES LIKE LOSS ON TRADE INVESTMENTS, VARIOUS EXPENSES, INTEREST INCOME ETC AND ALSO PARTIAL DISALLOWING THE 80HHC DEDUCTION, IS NOT VALID AND CANNOT SURVIVE. THUS, THE ACTION OF ASSESSING OFFICER IN MAKING REASSESSMENTS U/S.143(3) R.W.S.147, IN THE A.YS.2000-0L AND 2001-02, CANNOT BE SUSTAINED ON THIS REASON ALONE. 4.1.13 THUS, SINCE THE ASSESSING OFFICER HAS NOT FOUND ANY ESCAPEMENT OF INCOME FROM ASSESSMENT, ON ACCOUNT OF THE REASONS FOR WHICH THE ASSESSMENTS ARE REOPENED, THE ASSESSING OFFICER CEASE TO LOOSE THE JURISDICTION AND ACCORDINGLY CANNOT PROCEED WITH SOME OTHER ISSUE(S} OF ADDITIONS/DISALLOWANCES, IN BOTH OF THE ASSESSMENT YEARS UNDER CONSIDERATION. ONCE THE ASSESSING OFFICER LOOSES THE JURISDICTION U / S.147 OF THE ACT, ANY CONSEQUENT ASSESSMENT IS NOT LEGALLY VALID. THEREFORE, THE PRESENT RE-ASSESSMENTS A.YS.2000-01 AND 2001-02 MADE BY THE ASSESSING OFFICER U/S.143(3} R.W.S.147 ARE WITHOUT JURISDICTION AND HENCE NOT VALID. ACCORDINGLY, THE ORDERS OF THE ASSESSING OFFICER U] S.143(3} LW.S.147, IN A.YS.2000- 01 AND 2001-02, ARE QUASHED. THE ASSESSEE SUCCEEDS IN ITS APPEALS. 7. ON GOING THROUGH THE ORDER OF THE COMMISSIONER O F INCOME TAX (APPEALS), WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APP EALS), 11 ITA NOS. 2641 & 2642/MDS/2014 THUS WE SUSTAIN THE ORDER OF THE COMMISSIONER OF IN COME TAX (APPEALS) IN HOLDING THAT REASSESSMENTS ARE BAD IN LAW. 8. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH OCTOBER, 2015. SD/- SD/- ( # ) ( & (# ) ( CHANDRA POOJARI ) ( CHALLA NAG ENDRA PRASAD ) * / ACCOUNTANT MEMBER ( * / JUDICIAL MEMBER ( /CHENNAI, , /DATED 29 TH OCTOBER, 2015 SOMU ./ 0/ /COPY TO: 1. APPELLANT 2.RESPONDENT 3. 1 () /CIT(A) 4. 1 /CIT 5. / 5 /DR 6. /GF .