Golden Job Finder P.Ltd, New Delhi V. ITO, Ward-11(4), New Delhi

ITA 2830/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8756 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 23-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N A NAZMI
• Keywords: Reopening of assessment; Depreciation; Reason to believe; Reassessment proceedings
• Section: 143(3); 250; 207; 48; 13; 147; 131; 68; 148; 15

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI C BEN CH, NEW DELHI [THROUGH VIDEO CONFERENCE] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI K.N. CHARY, JUDICIAL MEMBE R ITA NO. 2830/DEL/2018 [A.Y 2009-10] GOLDEN JOB FINDER PVT LTD VS. THE I.T.O B 44, SOMDUTT CHAMBER -2 WARD - 11(4) 9, BHIKAJI CAMA PLACE, NEW DELHI NEW DELHI PAN: AACCG 4539 K [APPELLANT] [RESPONDENT] ASSESSEE BY : SHRI S.K. TULSIAN , ADV MS. ABHA AGARWAL, ADV MS. BHOOMIJA VERMA, AD MS. A. NANCY RATHI, ADV SHRI ASHWANI KUMAR, CA REVENUE BY : SHRI S.N.A NAZMI, S R. DR DATE OF HEARING : 29.07.2021 DATE OF PRONOUNCEMENT : 29.07.2021 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE CIT(A) 35, NEW DELHI, DATED 02.01.2018 PERTAINING TO A.Y 2009-10. 2 2. THE GRIEVANCES OF THE ASSESSEE READ AS UNDER: THAT THE ORDER DATED 02-01-2018 PASSED U/S 250 OF T HE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED THE ACT ) BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) 35 NEW DELHI IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED TO UPHOLD THE ACTION OF THE LEARNED INCOME TAX OFFI CER, WARD - 11(4), NEW DELHI IN PASSING THE ORDER U/S 148 OF TH E ACT. THAT THEORDER DATED 02-01-2018 PASSED U/S 250 OF TH E ACT BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) -35 NEW DELHI IS AGAINST LAW AND FACTS ON THE FILE IN AS MU CH AS HE WAS NOT JUSTIFIED TO UPHOLD THE ACTION OF THE LEARNED INCOM E TAX OFFICER, WARD -11(4), NEW DELHI IN ADDING BACK A SUM OF RS. 40,00,000/- AS SHARE CAPITAL, RS. 19,60,00,000/- AS SHARE PREMIUM AND RS. 4,20,00,000/- AS SHARE APPLICATION MONEY RECEIVED ( AGGREGATING TO RS. 24,20,00,000/-) BY RESORTING TO THE PROVISIONS OF SECTION 68 OF THE ACT AND HOLDING THAT THE ONUS AS CAST UPON THE APPELLANT COMPANY BY THE SAID SECTION HAD NOT BEEN DISCHARGED . THAT THE ORDER DATED 02-01-2018 PASSED U/S 250 OF T HE ACT BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) -35 NEW DELHI IS AGAINST LAW AND FACTS ON THE FILE IN AS MU CH AS HE WAS NOT JUSTIFIED TO UPHOLD THE ACTION OF THE LEARNED INCOM E TAX OFFICER, WARD -11(4), NEW DELHI IN ADDING BACK A SUM OF RS. 48,40,000/- ON THE GROUND THAT COMMISSION @ 2% HAS ALLEGEDLY BEEN PAID BY THE APPELLANT COMPANY FOR PROCURING THE ACCOMMODATION E NTRIES BY TREATING THE SAME AS BEING UNDISCLOSED SOURCES. 3 3. THE REPRESENTATIVES OF BOTH THE SIDES WERE HEARD AT LENGTH. CASE RECORDS CAREFULLY PERUSED AND WITH THE ASSISTANCE O F THE LD. COUNSEL, WE HAVE CONSIDERED THE DOCUMENTARY EVIDENCES BROUGH T ON RECORD IN THE FORM OF PAPER BOOK IN LIGHT OF RULE 18(6) OF IT AT RULES. JUDICIAL DECISIONS RELIED UPON HAVE BEEN CAREFULLY CONSIDERE D. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED ITS RETURN OF INCOME ON 30.09.2009 WHEREIN INCOME OF RS . 26,31,781/- WAS DECLARED. VIDE NOTICE DATED 31.03.2016, THE ASSESS ING OFFICER ASSUMED JURISDICTION FOR REOPENING ASSESSMENT AND REASSESSM ENT PROCEEDINGS WERE INITIATED. THE REASONS FOR REOPENING THE CASE RECORDED BY THE ASSESSING OFFICER READ AS UNDER: REASONS FOR REOPENING THE CASE OF M/S GOLDEN JOB F INDER PVT. LTD. AY 2009- 10, U/S 147/148 OF THE INCOME TAX ACT. 1961. THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR A.Y . 2009-10 ON 30.09.2009 DECLARING AN INCOME T 26,31,781/-. THERE AFTER, AN INFORMATION WAS RECEIVED IN THIS OFFICE, ON 30.03.2016 FROM DY. DIRECTOR OF INCOME TAX (INV.), UNIT-4(3), KOLKATA AS FOLLOWS: 4 THE ABOVE MENTIONED COMPANY IS ASSESSED, WITH YOU. CREDIBLE INFORMATION IN RESPECT OF HIM HAS BEEN RECEIVED BY THIS UNIT ON 09,12.2009. THE MAIN ALLEGATIONS ARE AS FOLLOWS: THERE ARE 6 PROPRIETORS NAMELY, AKSHAY TRADERS - AN BPP1358A, AMBIKA UDYOG - A10PD7042D, DURGA UDYOG - AIOPD7042D, KARUNA SECURITIES - BBXPS5166C, MAHENDRA SUPPLIERS - BCAPS29/41F, SHREE HARI SUPPLIERS - BCAPS2941F. DURGA UDYOG - PAN AIOPD7042D, OPENED AN ACCOUNT IN DCB BANK IN 11 TH MAY, 2006 GARIAHAT BRANCH, KOLKATA. IN THIS ACCOUNT THERE WAS DIRECT CASH DEPOSIT OF HUGE AMOUNT TOTALING AROUND 125 CRORE IN 2008 TO 03.09.2009. S. N O. BENEFICIARIES COMPANIES PAN CIRCLE / WARD JURISDICTIO N NAME BUILDING NAME AMT I 1. JULIET APPARELS LTD. V. AAACJ3702F WARD 13(3), DELHI ROOM NO. 324, C.R. BUILDING, I,P. ESTATE, NEW C.R. BUILDING, DELHI 7 25 LACS 2, MATCHLESS INFRASTRUCTURE PVT. LTD. AAECM5742 J CIRCLE 16(2) DELHI ROOM NO. 308, C.R. BUILDING, I.P. ESTATE, NEW C.R, BUILDING, DELHI, 7 90 LACS 3. GOLDEN JOB FINDER PVT. LTD. AACCG4539K WARD 10(2), DELHI. . ROOM NO. 374 C.R. BUILDING,. I.P. ESTATE, NEW C.R. BUILDING, DELHI 7 95 LACS 4. CELEBRATION INFRABUILD PVT. LTD. AADCG2557J WARD 5(4), DELHI. ROOM NO. 229B, C.R. BUILDING, I.P. ESTATE, NEW C.R. BUILDING, DELHI 715 LACS, 5 SHREE HARI SUPPLIERS - PAN: BCAPS2941F, OPENED AN ACCOUNT IN DCB BANK IN 10 TH MAY , 2006 GARIAHATBRANCH, KOLKATA. IN THIS ACCOUNT THERE WAS DIRECT CASH DEPOSIT OF HUGE AMOUNT TOTALING AROUND 82.93 C RORE IN 2008 TO 03.09.2009. KARUNA SECURITIES PAN - BBXPS5166C OPENED AN ACCOUNT IN DCB BANK IN 26 ITFURCH, 2009 IN GARIAHAT BRANCH, KOLKATA. IN THIS ACCOUNT AMOUNT TOTALING AROUND X 143 CR. HIGH VALUE TRANSFER FROM TWO PROPE RTORS, MAHENDRA SUPPLIERS, AMBIKA UDYOG AND TOTAL AMOUNT TRANSFER T O S S SECURITIES THROUGH RTGS. AKSHAY TRADERS - PAN: ANBPP1358A OPENED AN ACCOUNT IN DCB BANK IN 20 APRIL, 2009 KALBADEVI BRANCH, MUMBAI. IN THIS ACCOU NT AMOUNT DEPOSIT AROUND 26 CRORE AND TOTAL TRANSFER TO KARUNA SECURITIES, DURGA UDYOG, SHREE HARI SUPPLIERS, KARUNA SECURITIE S, AKSHAY TRADERS TRANSFER THE AMOUNT TO GANPATI SECURITIES, S S SECU RITIES AROUND X 207 CRORE AND X 152 CRORE RESPECTIVELY. GANPATI SECURITIES PAN: BBXPS5166C AND S S SECURITI ES PAN: BFSPS6626A TRANSFER THIS AMOUNT TO FOURTH LAYER COMPANIES. MAI NLY S S SECURITIES TRANSFER THE HIGH VALUE FUND TO BENEFICIARIES COMPA NIES. FOURTH LAYER COMPANIES TRANSFER THE FUND TO BENEFICIARIES COMPAN IES. LIST OF BENEFICIARIES COMPANIES ARE ATTACHED. BANK STATEMENTS AND KYC DOCUMENTS HAVE BEEN REQUISI TIONED FROM DCB BANK., FURTHER FROM KYC DOCUMENTS, IT IS GATHERED THAT THE ASSESSEE HAS ACCOUNTS IN ICICI BANK, YES BANK AND RBS BANK ALSO. THE SAME WERE REQUISITIONED BY 6 ISSUING SUMMONS U/S 131 OF THE L.T. ACT, 1961 WHICH WERE DULY VERIFIED AND ANALYZED. THEREAFTER, SUMMONS U/S 131 OF THE L.T. ACT, 1961 W AS ISSUED TO ANAND SINGH, LOKESH DUBEY AND SUBIR SAHA ON 23.11.2015FOR HIS PE RSONAL ATTENDANCE FOR RECORDING OF STATEMENT AND SUBMISSION OF VARIOUS PA PERS/DOCUMENTS AS MENTIONED IN THE SUMMONS. THERE WAS NO ONE RESIDENT AT THEIR GIVEN ADDRESS. THE ALL PROPRIETOR HAS BEEN USED FOR LAYERING OF FU NDS. THE FUND WAS TRANSFER TO THE VARIOUS BENEFICIARY CO MPANIES. THE UNDERSIGNED IS PROVIDING A CASH TRAIL OF BENEFICIARY COMPANY IS LAYERING UNDER YOUR JURISDICTION. IN VIEW OF THE ABOVE, AS THE ALLEGATIONS MENTIONED IN THE ABOVE HAVE ALREADY BEEN COMPREHENSIVELY EXAMINED AND VERIFIED, FURTHER INVESTIGATION DOES NOT NEED NECESSARY AT THIS END. THE FOLLOWING BANK ACCOUNTS OF PROPRIETORS: S. NO. NAME OF ACCOUNT HOLDER BANK & BRANCH A/C NO. 01. MAHENDRA SUPPLIERS DCB BANK, KALBADEVI BRANCH, MUMBAI 00221300000532 02. AMBIKA UDYOG DCB BANK, KALBADEVI 0022130000050 * ' BRANCH, MUMBAI 03. KARUNA SECURITIES DCB BANK, KALBADEVI BRANCH, MUMBAI 00221300000569 04. AKSHAY TRADERS DCB BANK, KALBADEVI BRANCH, MUMBAI 00221300000578 05. SHREE HARI SUPPLIERS DCB BANK, GARIHAT BRANCH, KOLKATA I 08721200000046 06. DURGA UDYOG DCB BANK, GARIHAT BRANCH, KOLKATA 08721200000064 7 AS THE JURISDICTION OVER THE ASSESSEE LIES WITH YOU . I AM FORWARDING HEREWITH THE ABOVE INFORMATION TO YOU FOR TAKING NE CESSARY ACTION AS PER THE PROVISIONS OF THE I.T. ACT, 1961. IF DEEMED FIT , IN CASH, IF JURISDICTION HAS BEEN CHANGED, THE SAME MAY BE TRANSFERRED TO TH E CONCERNED AO UNDER INTIMATION TO THIS OFFICE. THE DDIT(INV.) HAS ALSO FORWARDED A CASH TRAIL OF T HESE COMPANIES AND ON PERUSAL OF THE SAME IT IS NOTICED THAT THE A SSESSEE COMPANY M/S. GOLDEN JOB FINDER PVT. LTD. HAS RECEIVED RS. 95,00, 000/- FROM THESE ENTITIES. HOWEVER, NATURE OF TRANSACTION IS NOT CLE ARLY MENTIONED IN THE LETTER OF DDIT WHETHER IT IS ACCOMMODATION ENTRY IN THE GARB OF SHARE APPLICATION/SHARE PREMIUM OR SALE/PURCHASE TRANSACT IONS. FURTHER ON PERUSAL OF RETURN FOR A.Y. 2009-10 IN TH E CASE OF M/S. GOLDEN JOB FINDER PVT. LTD. , THE ASSESSEE HAS SHOW N AUTHORISED CAPITAL AT T 5,50,00,000/-, ISSUED/SUBSCRIBED AND PAID UP CAPI TAL AT T 5,33,50,000/-, SHARE APPLICATION MONEY AT T 4,20,00 ,000/- AND SECURITIES PREMIUM ACCOUNT AT T 26,39,50,000/-. APA RT FROM THE ASSESSEE HAS SHOWN LONG TERM INVESTMENTS TOTALING T O T 36,09,04,095/-. FROM THE FACTS GIVEN IN THE REPORT OF THE DDIT AND DETAILS FROM THE BALANCE SHEET, I, THEREFORE HAVE REASONS TO BELIEVE THAT INCOME TO THE EXTENT OF T 95,00,000/- (AS PER ABOVE INFORMATION) HAS ESCAPED ASSESSMENT IN THIS CASE OF M/S. GOLDEN JOB FINDER P VT. LTCJL FOR THE A.Y 2009-10 WITHIN THE MEANING OF SECTION 147/148 OF IN COME-TAX ACT, 1961. 4. SINCE MORE THAN 4 YEARS OF THE RELEVANT YEARS HA VE PASSED AND THE INFORMATION AVAILABLE AMOUNT TO NON DISCLOSURE OF M ATERIAL FACTS PERTAINING TO SUCH TRANSACTIONS WHICH HAS NOT BEEN DISCLOSED B Y THE ASSESSEE IN ITS 8 RETURN FOR A.Y. 2009-10. THUS, SPECIFIC CONDITION F OR REOPENING IS HEREBY FULFILLED IN THE INSTANT CASE AS ASSESSEE HAS FAILE D TO DISCLOSE SUCH MATERIAL FACTS ON ITS OWN. THE CASE IS SQUARELY COV ERED UNDER PROVISIONS OF SECTION 147 OF INCOME- TAX ACT, 1961. MOREOVER, AS THE CASE PERTAINS TO A PERIOD BEYOND F OUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEARS AT THE TIME OF ISS UE OF NOTICE, NECESSARY SANCTION HAS TO BE OBTAINED FROM PR. CHIEF COMMISSI ONER OF INCOME TAX OR PR. COMMISSIONER OF INCOME TAX OR COMMISSIONER OF INCOM E TAX, IN VIEW OF THE AMENDED PROVISION OF SECTION 151 W.E.F 01.06.2015, THE NECESSARY SANCTION IN THIS REGARD IS BEING OBTAINED SEPARATELY FROM PR. C OMMISSIONER OF INCOME TAX- 04, DELHI BEFORE THE ISSUE OF NOTICE U/S/148 FOR REOPENING OF ASSESSMENT UNDER SECTION 147 IN THE CASE OF ASSESSEE COMPANY. SUBMITTED FOR KIND APPROVAL PLEASE. 5. A PERUSAL OF THE REASONS RECORDED, EXTRACTED HER EINABOVE, FOR REOPENING THE ASSESSMENT CLEARLY SHOW THAT THE ASSE SSING OFFICER HAD REASONS TO BELIEVE THAT INCOME TO THE EXTENT OF RS. 95 LAKHS AS PER INFORMATION MENTIONED IN THE REASONS HAS ESCAPED AS SESSMENT IN THE CASE OF THE ASSESSEE FOR A.Y 2009-10. INCOME TAX OFFICER, WARD-10(2), NEW DELHI 9 6. STRICTLY KEEPING IN MIND THE REASONS FOR REOPENI NG THE ASSESSMENT MENTIONED HEREINABOVE, LET US NOW SEE HOW THE ASSES SMENT ORDER DATED 28.12.2016 FRAMED U/S 147 R.W.S 143(3) OF THE ACT WAS COMPLETED: INCOME AS ABOVE RS. 26,31,781/ - ADDITIONS DISALLOWANCE U/S 68 OF THE ACT RS. 24,20,00,000/ - ON ACCOUNT OF COMMISSION PAID RS. 48,40,000/ - TOTAL RS. 24,94,71,781/ - 7. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE TWO ADDITIONS MADE BY THE ASSESSING OFFICER WHILE COMPLETING ASSE SSMENT ORDER WERE ON THE BASIS OF THE DETAILED INVESTIGATIONS CARRIED OUT BY THE INVESTIGATION WING WHICH CAME TO THE NOTICE OF THE ASSESSING OFFICER DURING SCRUTINY ASSESSMENT PROCEEDINGS. IT CAN BE SEEN THAT THE COMPUTATION OF ASSESSED INCOME IS TOTALLY DEVOID OF ANY ADDITION WHICH WAS THE BASIS FOR THE ASSESSING OFFICER TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT I.E. RS. 95 LAKHS. 10 8. IN OUR CONSIDERED VIEW, THE ASSESSING OFFICER HA S DRAWN SUPPORT FROM EXPLANATION 3 TO SECTION 147 OF THE ACT WHICH WAS INSERTED BY THE FINANCE [NO. 2] ACT, 2009 W.R.E. 01.04.1989 AND THE SAME READS AS UNDER: FOR THE PURPOSE OF ASSESSMENT OR REASSESSMENT UNDE R THIS SECTION, THE ASSESSING OFFICER MAY ASSESS OR REASSE SS THE INCOME IN RESPECT OF ANY ISSUE, WHICH HAS ESCAPED ASSESSME NT, AND SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURS E OF THE PROCEEDINGS UNDER THIS SECTION, NOTWITHSTANDING THA T THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REASON S RECORDED UNDER SUB-SECTION (2) OF SECTION 148. 9. THIS INSERTION OF EXPLANATION 3 TO SECTION 147 O F THE ACT HAS BEEN EXAMINED AND INTERPRETED BY THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. JET AIRWAYS [I] LTD 331 ITR 236. T HE RELEVANT PART OF THE JUDGMENT IS EXTRACTED AS UNDER: 5. THE CONDITION PRECEDENT TO THE EXERCISE OF THE JURI SDICTION UNDER SECTION 147 IS THE FORMATION OF A REASON TO B ELIEVE BY THE ASSESSING OFFICER THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. UPON THE FORMATION OR A REASON TO BELIE VE, THE ASSESSING OFFICER, BEFORE MAKING THE ASSESSMENT, RE ASSESSMENT OR RECOMPUTATION UNDER SECTION 147 HAS TO SERVE ON THE ASSESSEE A 11 NOTICE REQUIRING HIM TO FURNISH A RETURN OF HIS INC OME. UPON THE FORMATION OF THE REASON TO BELIEVE THAT INCOME CHAR GEABLE TO TAX HAS ESCAPED ASSESSMENT, THE ASSESSING OFFICER IS EM POWERED TO 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 PRO CEEDINGS UNDER SECTION 147. 6. THE EFFECT OF EXPLANATION 3 WHICH WAS INSERTED BY THE FINANCE (NO. 2) ACT OF 2009 IS THAT EVEN THOUGH THE NOTICE THAT HAS BEEN ISSUED UNDER SECTION 148 CONTAINING THE REASONS FOR REOPENING THE ASSESSMENT DOES NOT CONTAIN A REFERENCE TO A PARTIC ULAR ISSUE WITH REFERENCE TO WHICH INCOME HAS ESCAPED ASSESSMENT, T HE ASSESSING OFFICER MAY ASSESS OR REASSESS THE INCOME IN RESPEC T OF ANY ISSUE WHICH HAS ESCAPED ASSESSMENT, WHEN SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS. THE REASONS FOR THE INSERTION OF EXPLANATION 3 ARE TO BE FOUND IN THE MEMORANDUM EXPLAINING THE PROVISIONS OF FINANCE (NO. 2)BILL OF 2009. THE MEMORANDUM TREATS THE AMENDMENT TO BE CLARIFICATORY AND CONTAINS THE FOLLOWING EXPLANATION : 'SOME COURTS HAVE HELD THAT THE ASSESSING OFFICER H AS TO RESTRICT THE REASSESSMENT PROCEEDINGS ONLY TO ISSUES IN RESP ECT OF WHICH THE REASONS HAVE BEEN RECORDED FOR REOPENING THE AS SESSMENT. HE IS NOT EMPOWERED TO TOUCH UPON ANY OTHER ISSUE FOR WHICH NO REASONS HAVE BEEN RECORDED. THE ABOVE INTERPRETATIO N IS CONTRARY TO THE LEGISLATIVE INTENT. 12 WITH A VIEW TO FURTHER CLARIFYING THE LEGISLATIVE I NTENT, IT IS PROPOSED TO INSERT AN EXPLANATION IN SECTION147 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 PROCEEDINGS UNDER THIS SECTION, NOTWITHSTANDING THA T THE REASON FOR SUCH ISSUE HAS NOT BEEN INCLUDED IN THE REASONS RECORDED UNDER SUB-SECTION (2) OF SECTION 148.' 7. IN ORDER TO APPRECIATE THE REASONS FOR THE AMENDMEN T INSERTING EXPLANATION 3, IT WOULD BE NECESSARY TO ADVERT TO SOME OF THE JUDGMENTS OF THE HIGH COURTS, PRIOR TO THE AMENDMEN T. THE PUNJAB AND HARYANA HIGH COURT, IN ITS DECISION, IN VIPAN KHANNA V. ASSTT. CIT [2002] 255 ITR 2201DEALT WITH THE QUESTION AS TO WHETHER, AFTER INITIATING PROCEEDINGS UNDER SECTION 147 ON THE GROUND THAT THE PETITIONER HAD CLAIMED DEPRECIATION AT A HIGHER RATE, THE ASSESSING OFFICER WOULD BE JUSTIFIED IN L AUNCHING AN INQUIRY INTO ISSUES WHICH WERE NOT CONNECTED WITH T HE CLAIM OF DEPRECIATION. THIS QUESTION WAS ANSWERED IN THE NEG ATIVE. A DIVISION BENCH OF THE KERALA HIGH COURT HELD IN TRAVANCORE CEMENTS LTD. V. CIT [2008] 305 ITR 1701 ,THAT UPON THE ISSUANCE OF A NOTICE UNDER SECTION 148(2), WHEN PROCEEDINGS WERE INITIATED BY THE ASSESSING OFFICER ON ISSUES IN RESPECT OF WH ICH HE HAD FORMED A REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT, IT WAS NOT OPEN TO THE ASSESSING OFFICER TO CARRY OUT AN ASSESSMENT, OR REASSESSMENT IN RESPECT OF OTHER ISSUES WHICH WE RE TOTALLY UNCONNECTED WITH THE PROCEEDINGS THAT WERE ALREADY INITIATED AND 13 WHICH CAME TO HIS KNOWLEDGE DURING THE COURSE OF TH E PROCEEDINGS. THE DIVISION BENCH HELD THAT IN RESPECT OF AN ISSUE WHICH IS TOTALLY UNCONNECTED TO THE BASIS ON WHICH THE ASSESSING OFF ICER FORMED A REASON TO BELIEVE THAT INCOME ESCAPED ASSESSMENT AN D ISSUED A NOTICE UNDER SECTION 148, IT WAS OPEN TO HIM TO ISS UE A FRESH NOTICE BY FOLLOWING SUB-SECTION (2) OF SECTION 148 WITH RE GARD TO THE ESCAPED INCOME WHICH CAME TO HIS KNOWLEDGE DURING T HE COURSE OF THE PROCEEDINGS. THE KERALA HIGH COURT HELD AS FOLL OWS : '. . .THE ASSESSING OFFICER GETS JURISDICTION UNDER SECTION 148 TO ASSESS OR REASSESS THE INCOME WHICH HAS ESCAPED ASS ESSMENT ONLY AFTER SUB-SECTION (2) OF SECTION 148 IS COMPLIED WI TH. THE QUESTION IS WHETHER SUB-SECTION (2) OF SECTION 148 HAS TO BE COMPLIED WITH IF ANY OTHER INCOME CHARGEABLE TO TAX HAS ESCAPED ASSE SSMENT, OR WHICH COMES TO HIS KNOWLEDGE SUBSEQUENTLY IN THE CO URSE OF THE PROCEEDINGS. IN OTHER WORDS, WHEN PROCEEDINGS ARE A LREADY ON IN RESPECT OF ONE ITEM IN RESPECT OF THE INCOME FOR WH ICH HE HAD ALREADY RECORDED REASONS IS IT NECESSARY THAT HE SH OULD RECORD REASONS FOR ASSESSING OR REASSESSING ANY OF THE ITE MS WHICH ARE TOTALLY UNCONNECTED WITH THE PROCEEDINGS ALREADY IN ITIATED. SUPPOSE UNDER TWO HEADS INCOME HAS ESCAPED ASSESSMENT AND T HOSE TWO HEADS ARE INTER-LINKED AND CONNECTED, THE PROCEEDIN GS INITIATED OR NOTICE ALREADY ISSUED UNDER SUB-SECTION (2) OF SECT ION 148 WOULD BE SUFFICIENT IF THE ESCAPED INCOME ON THE SECOND HEAD COMES TO THE KNOWLEDGE OF THE OFFICER IN THE COURSE OF THE PROCE EDINGS. BUT IF BOTH THE ITEMS ARE UNCONNECTED AND TOTALLY ALIEN TH EN THE ASSESSING AUTHORITY HAS TO FOLLOW SUB-SECTION (2)OF SECTION 1 48 WITH REGARD 14 TO THE ESCAPED INCOME WHICH COMES TO HIS KNOWLEDGE DURING THE COURSE OF THE PROCEEDINGS.' HENCE, THE VIEW OF THE PUNJAB AND HARYANA HIGH COUR T AND THE KERALA HIGH COURT WAS THAT, ONCE THE ASSESSING OFFI CER HAS REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPE D ASSESSMENT AND PROCEEDS TO ISSUE A NOTICE UNDER SECTION 148, I T IS NOT OPEN TO HIM TO ASSESS OR, AS THE CASE MAY BE, REASSESS THE INCOME UNDER AN INDEPENDENT OR UNCONNECTED ISSUE, WHICH WAS NOT THE BASIS OF THE NOTICE FOR REOPENING THE ASSESSMENT. 8. PARLIAMENT STEPPED IN TO CORRECT WHAT IT REGARDED A S AN INCORRECT INTERPRETATION OF THE PROVISIONS OF SECTI ON147. THE MEMORANDUM EXPLAIN-ING THE PROVISIONS OF FINANCE (N O. 2) BILL OF 2009 STATES IN THIS BACKGROUND THAT SOME COURTS HAD HELD THAT THE ASSESSING OFFICER HAS TO RESTRICT THE REASSESSMENT PROCEEDINGS ONLY TO ISSUES IN RESPECT OF WHICH REASONS HAVE BEE N RECORDED FOR REOPENING THE ASSESSMENT AND THAT IT WAS NOT OPEN T O HIM TO TOUCH UPON ANY OTHER ISSUE FOR WHICH NO REASONS HAVE BEEN RECORDED. THIS INTERPRETATION WAS REGARDED BY PARLIAMENT AS BEING CONTRARY TO LEGISLATIVE INTENT. HENCE, EXPLANATION 3 CAME TO BE INSERTED TO PROVIDE THAT THE ASSESSING OFFICER MAY ASSESS OR RE ASSESS INCOME IN RESPECT OF ANY ISSUE WHICH COMES TO HIS NOTICE S UBSEQUENTLY IN THE COURSE OF PROCEEDINGS UNDER SECTION 147 THOUGH THE REASONS FOR SUCH ISSUE WERE NOT INCLUDED IN THE REASONS REC ORDED IN THE NOTICE UNDER SECTION 148(2). 15 9. THE EFFECT OF SECTION 147 AS IT NOW STANDS AFTER TH E AMENDMENT OF 2009 CAN, THEREFORE, BE SUMMARISED AS FOLLOWS : ( I ) THE ASSESSING OFFICER MUST HAVE REASON TO BELIEVE T HAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY AS SESSMENT YEAR; ( II ) UPON THE FORMATION OF THAT BELIEF AND BEFORE HE P ROCEEDS TO MAKE AN ASSESSMENT, REASSESSMENT OR RECOMPUTATIO N, THE ASSESSING OFFICER HAS TO SERVE ON THE ASSESSEE A NO TICE UNDERSUB- SECTION (1) OF SECTION 148; ( III ) THE ASSESSING OFFICER MAY ASSESS OR REASSESS SUCH INCOME, WHICH HE HAS REASON TO BELIEV E, HAS ESCAPED ASSESSMENT AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SU BSEQUENTLY 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 RESPE CT OF ANY ISSUE WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THE SECTION. 10. XXX 11. THE RIVAL SUBMISSIONS WHICH HAVE BEEN URGED ON BEHA LF OF THE REVENUE AND THE ASSESSEE CAN BE DEALT WITH ,BOTH AS A MATTER OF FIRST PRINCIPLE, INTERPRETING THE SECTION AS IT STA NDS AND ON THE BASIS OF PRECEDENTS ON THE SUBJECT. INTERPRETING TH E PROVISION AS IT STANDS AND WITHOUT ADDING OR DEDUCTING FROM THE WOR DS USED BY PARLIAMENT, IT IS CLEAR THAT UPON THE FORMATION OF A REASON TO BELIEVE UNDER SECTION 147 AND FOLLOWING THE ISSUANC E OF A NOTICE UNDER SECTION 148, THE ASSESSING OFFICER HAS THE PO WER TO ASSESS 16 OR REASSESS THE INCOME, WHICH HE HAS REASON TO BELI EVE HAD ESCAPED ASSESSMENT AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX. THE WORDS 'AND ALSO' CANNOT BE IGNORED. THE INTERPRETATION WH ICH THE COURT PLACES ON THE PROVISION SHOULD NOT RESULT IN DILUTI NG THE EFFECT OF THESE WORDS OR RENDERING ANY PART OF THE LANGUAGE U SED BY PARLIAMENT OTIOSE . PARLIAMENT HAVING USED THE WORDS 'ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHAR GEABLE TOTAX WHICH HAS ESCAPED ASSESSMENT', THE WORDS 'AND ALSO' CANNOT BE READ AS BEING IN THE ALTERNATIVE. ON THE CONTRARY, THE CORRECT INTERPRETATION WOULD BE TO REGARD THOSE WORDS AS BE ING CONJUNCTIVE AND CUMULATIVE. IT ISOF SOME SIGNIFICANCE THAT PARL IAMENT HAS NOT USED THE WORD 'OR'. THE LEGISLATURE DID NOT REST CO NTENT BY MERELY USING THE WORD 'AND'. THE WORDS 'AND', AS WELL AS ' ALSO' HAVE BEEN USED TOGETHER AND IN CONJUNCTION. THE SHORTER OXFORD DICTIONARY DEFINES THE EXPRESSION 'ALSO' TO MEAN 'FURTHER, IN ADDITION, BESIDES, TOO'. THE WORD HAS BEEN TREATED AS BEING RELATIVE AND CONJUNCTIVE. EVIDENTL Y, THEREFORE, WHAT PARLIAMENT INTENDS BY USEOF THE WORDS 'AND ALS O' IS THAT THE ASSESSING OFFICER, UPON THE FORMATION OF A REASON T O BELIEVE UNDER SECTION147 AND THE ISSUANCE OF A NOTICE UNDER SECTI ON 148(2) MUST ASSESS OR REASSESS: ( I ) 'SUCH INCOME'; AND ALSO ( II )ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PRO CEEDINGS UNDER THE SECTION. THE WORDS 'SUCH INCOME' REFER TO THE I NCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND IN RESPECT OF WHICH THE ASSESSING OFFICER HAS FORMED A REASON TO BELIEVE THAT IT HAS ESCAPED ASSESSMENT. HENCE, THE LANGUAGE WHICH H AS BEEN USED 17 BY PARLIAMENT IS INDICATIVE OF THE POSITION THAT TH E ASSESSMENT OR REASSESSMENT MUST BE IN RESPECT OF THE INCOME IN RE SPECT OF WHICH HE HAS FORMED A REASON TO BELIEVE THAT IT HAS ESCAP ED ASSESSMENT AND ALSO IN RESPECT OF ANY OTHER INCOME WHICH COMES TO HIS NOTICE SUBSEQUENTLY DURING THE COURSE OF THE PROCEEDINGS A S HAVING ESCAPED ASSESSMENT. IF THE INCOME, THE ESCAPEMENT O F WHICH WAS THE BASIS OF THE FORMATION OF THE SEASON TO BELIEVE ISNOT ASSESSED OR REASSESSED, IT WOULD NOT BE OPEN TO THE ASSESSIN G OFFICER TO INDEPENDENTLY ASSESS ONLY THAT INCOME WHICH COMES T O HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THE SECTION AS HAVING ESCAPED ASSESSMENT. IF UPON THE ISSUANCE OF A NOTICE UNDER SECTION 148(2), THE ASSESSING OFFICER ACCEPTS THE O BJECTIONS OF THE ASSESSEE AND DOES NOT ASSESS OR REASSESS THE IN COME WHICH WAS THE BASIS OF THE NOTICE, IT WOULD NOT BE OPEN TO HI M TO ASSESS INCOME UNDER SOME OTHER ISSUE INDEPENDENTLY. PARLIA MENT WHEN IT ENACTED THE PROVISIONS OF SECTION 147 WITH EFFECT F ROM 1-4-1989 CLEARLY STIPULATED THAT THE ASSESSING OFFICER HAS T O ASSESS OR REASSESS THE INCOME WHICH HE HAD REASON TO BELIEVE HAD ESCAPED ASSESSMENT AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH CAME TO HIS NOTICE DURING THE PROCEEDINGS. IN THE A BSENCE OF THE ASSESSMENT OR REASSESSMENT OF THE FORMER, HE CANNOT INDEPENDENTLY ASSESS THE LATTER. 10. IF THE ABOVE JUDGMENT IS APPLIED ON THE FACTS O F THE CASE IN HAND, WE FIND THAT THE ASSESSING OFFICER HAS ACCEPTED THE OBJECTIONS OF THE ASSESSEE, AND HAS NOT ASSESSED OR REASSESSED THE IN COME, WHICH WAS 18 THE BASIS OF THE NOTICE. THEREFORE, IN LIGHT OF TH E JUDGMENT OF THE HON'BLE HIGH COURT OF BOMBAY [SUPRA] IT WOULD NOT B E OPEN TO THE ASSESSING OFFICER TO ASSESS INCOME UNDER SOME OTHER ISSUE INDEPENDENTLY. 11. CONSIDERING THE FACTS OF THE CASE IN TOTALITY, IN LIGHT OF THE JUDGMENT OF THE HON'BLE HIGH COURT OF BOMBAY [SUPRA ] WE QUASH THE ASSESSMENT ORDER DATED 28.12.2016 FRAMED U/S 147 R. W.S 143(3) OF THE ACT. SINCE WE HAVE QUASHED THE ASSESSMENT ORDER, W E DO NOT FIND IT NECESSARY TO DWELL INTO THE MERITS OF THE CASE. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 2830/DEL/2018 IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT IN THE PR ESENCE OF BOTH THE RIVAL REPRESENTATIVE ON 29.07.2021. SD/- SD/- [ K.N. CHARY ] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 TH JULY, 2021 19 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI DATE OF DICTATION ATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER