PCIT Vs Sunlight Tour And Travels Pvt Ltd (Delhi High Court)
Delhi High Court held that Assessing Officer cannot assess other incomes where no addition is made on account of reasons for which reassessment was initiated under section 147 of the Income Tax Act. Accordingly, appeal of the revenue dismissed.
Facts- The assessment of the income chargeable to tax in the previous year relevant to AY 2007-08 was sought to be reopened by issuance of notice under Section 148 of the Act. The Assessing Officer (AO) found that there were reasons to believe that the income of the Assessee for the relevant year had escaped assessment.
The Assessee objected to the reopening of the assessment on the ground that the information on the basis of which assessment was reopened, is erroneous. However, the AO passed an assessment order dated 26.03.2015 u/s. 147 r.w.s. 143(3) of the Act assessing the total income of the Assessee at ₹6,03,09,361/- which comprised of the income of ₹2,09,361/- as originally assessed and ₹6,01,00,000/- which was added u/s. 68 of the Act.
CIT(A) accepted that addition of ₹6,01,00,000/- was not sustainable. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that it is apparent from the above that the said explanation merely clarified that the AO would assess or reassess the income in respect of the issue which had escaped assessment and such other issue, which came to the notice subsequently. However, the said explanation does not control the import of the plain language of Section 147 of the Act. Explanation 3 to Section 147 of the Act, merely clarifies that the jurisdiction of the AO was not confined to assessing or reassessing of the income of an Assessee only in respect of the issue, which formed a part of the reasons recorded for reopening the assessment. The said explanation cannot be interpreted to mean that the AO could assess other incomes of the Assessee even in cases where no addition is made on account of the reasons for which reassessment was initiated.
