Papu Ram Vs ACIT (Rajasthan High Court)
Once the Reassessment Door Is Validly Opened, AO Can Walk into Other Rooms: Rajasthan HC Gives Wide Reach to Amended Section 147
Summary: The Rajasthan High Court has held that under the amended section 147, once reassessment proceedings have been validly initiated, the AO can assess income escaping assessment on any other issue which subsequently comes to his notice, even if no addition is ultimately made on the issue that originally triggered the reopening. A fresh procedure u/s 148A is not required for such subsequently discovered escapement.
The assessee carried on business through his proprietary concern, M/s Dara Construction Company. For AY 2018-19, reassessment was initiated on information received from the National E-Assessment Centre concerning a payment of ₹16.64 crore allegedly made to the assessee by M/s GVPREL Dara Joint Ventures.
A notice u/s 148A was issued on 17 March 2022, followed by an order u/s 148A(d) dated 29 March 2022 and a notice u/s 148. During the pending reassessment, the AO received further information/material arising from search proceedings. A show-cause notice dated 25 March 2023 was issued concerning this other escaped income, and additions were eventually made on the strength of the search material.
