Law:

Section:

Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts - Assessment years 1994-95 and 1995-96 - Whether an Explanation to a statutory provision is intended to explain its content and cannot be construed to override it or to render substance and core nugatory - Held, yes - Whether after insertion of Explanation 3 to section 147 by Finance (No. 2) Act, 2009, with effect from 1-4-1989, section 147 has an effect that Assessing Officer has to assess or reassess income ('such income') which escaped assessment and which was basis of formation of belief and if he does so, he can also assess or reassess any other income which has escaped assessment and which comes to his notice during course of proceedings - Held, yes - Whether, however, if after issuing a notice under section 148, he accepts contention of assessee and holds that income, for which he had initially formed a reason to believe that it had escaped assessment, has, as a matter of fact, not escaped assessment, it is not open to him to independently assess some other income; if he intends to do so, a fresh notice under section 148 would be necessary, legality of which would be tested in event of a challenge by assessee - Held, yes Words and phrases : The words 'and also' as occurring in section 147 of the Income-tax Act, 1961 FACTS The substantial question of law arising before the Court was as to whether where upon the issuance of a notice under section 148, read with section 147, the Assessing Officer does not assess or, as the case may be, reassess the income which he has reason to believe had escaped assessment and which formed the basis of a notice under section 148, it is open to the Assessing Officer to assess or reassess independently any other income, which does not form the subject-matter of the notice. According to the assessee, unless the Assessing Officer assesses the income with reference to which he had formed a reason to believe within the meaning of section 147, it would not be open to him to assess or to reassess any other income chargeable to tax which had escaped assessment and which comes to his notice subsequently in the course of the…

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