148

[CA.BHUPENDRASHAH]

are all points open u/s 148 ?
or restricted with reasons recorded?

[sivaiah G]

This is a very  typical issue. Courts have also decided on both sides. If you see the section, it says that any other escaped income that comes to notice of the AO during the course of assessment proceedings may be brought to tax. Revenue authorities interpret this wording implies that once the assessment is reopened, entire assessment deemed to have been reopened and they have powers to reassess the income of the assessees basing on the principles laid down by Apex court decision reported in 75 ITR 373. But the courts say that what is set a side is only the underassessment  but not the whole assessment basing on the corrected statement of Supreme Court reported in 198 ITR 297. BUt revenue authorities argue that this decision is not applicable to the present scenario as this decision was rendered for the assessment year earlier to the period of 1989. After 1989, according to revenue authorities, material change has been brought in sec. 148 wherein it was incorporated that "AO may 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 assessment proceedings under this section". This argument of the revenue authorities is negated by Punjab and Haryana Court in the decisions reported in 255 ITR 220, 269 ITR 378 and 189 CTR 154. Please note that the amendment brought in sec. 148 after 1989 was considered by P & H Court and even it held that reassessment is open only qua items on the basis of which the assessment is reopened. This decision was followed in many ITAT decisions reported in 94 ITD 329, 108 TTJ 1 and 16 sot 325. But the revenue authorities quote the case laws reported in 268 ITR 494, 291 ITR 500, 249 ITR 311, 295 ITR 525 and 300 ITR 324(AT) to support their argument. But it can be observed that many of these decisions are based on first supreme court decision reported in 75 ITR 373. Since Supreme Court itself has corrected its statement in its latter decison reported in 198 ITR 297, the CA community says that the revenue authorities argument is not correct and they support their statement with the Apex Courts decision reported in 293 ITR 1 wherein the court held that for the purpose of 263 the limit available is to computed from the date of original assessment but the date of reassessment wherein the issues involved are not the subject matter. Though this decision is not directly on this issue, indirectly it supports the argument that what is set aside is not whole assessment and only the underassessment and the original assessment still holds good for the remaining points. In addition to the above decisions revenue authorities take help of the Apex Court decison reported in 250 ITR 193 wherein it upheld the principle that the reassessment has completely effaced the original assessment as has been held by the High Court decison reported in 197 ITR 694. The question put by the author was left unanswered by the Supreme Court in this decion of 250 ITR 193.

               Since the decisions are on both sides, this issue is required to be settled by supreme Court decision. Whether any of the P & H decisions have been taken to Supreme Court or not is not in the knowledge me. if some body  throws further  light on this complicated issue which will  immensely help the readers to come to a conclusion. Please share your views so that everbody will learn out of the experience of others.

With best wishes...................     

[brett_lee38]

In my understanding the law is clear which syas that if the point on which assessment was reponed has been considered and assessed then the AO has powere to assessee the other issues and if the point on which assessment was reopned has not been touched or left or not assessed then AO has no power to toucht the other issues.