Law: Income Tax Act, 1961

Section: 143,143(3),147,263,148,215

Income-tax--Revision---Reassessment---Scope of reassessment---Original assessment--­Reopening of assessment is only as regards income escaping assessment--­Original assessment under S.143(3) remains even after reassessment in respect of matters which had been decided in original assessment ---CIT can revise original assessment order if it was erroneous and prejudicial to Revenue even after reassessment---Indian Income Tax Act, 1961, Ss. 143, 147 & 263. In proceedings under section 147 of the Income Tax Act, 1961, the Income-tax Officer may bring to charge- items of income which had escaped assessment other than or in addition to that item or items which have led to the issuance of the notice under' section 148. Where reassessment is made under section 147 in respect of income which has escaped assessment, the Income-tax Officer's jurisdiction is confined to only such income which has escaped assessment or has been underassessed and does not extend to revising, reopening or reconsidering the whole assessment or permitting the assessee to reagitate questions which had been decided in the original assessment proceedings. It is only the underassessment which is set aside and not the entire assessment when reassessment proceedings are initiated. When the assessment is reopened the original assessment under section 143('3) remains and it could not be said that the original assessment is non est on account of the reopening of the assessment. When the original assessment remains the Commissioner of Income-­tax had every right to revise the order if it was erroneous and prejudicial to the interests of the Revenue. The original assessment was made on November 18, 1985, and the revised assessment under section 147 was made on January 8, 1987 and the Commissioner of Income-tax revised the original assessment order under section 263 on March 8, 1988, directing the Income-tax Officer to charge interest under section 215 of the Income-tax Act. The assessee contended that as the original assessment order had merged with the reassessment order, the Commissioner of Income-tax could not revise the original assessment order under section 263. On a reference: Held, that the…

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