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| The Tax Publishers2020 TaxPub(DT) 4499 (Mum-Trib) INCOME TAX ACT, 1961
Section 147
Explanation 3 to section 147, inserted by Finance Act, 2009, empowers AO to assess any income which comes to his notice subsequently even though no reasons have been recorded in respect thereof, however, Explanation 3 of said section does not empower AO to make proving enquiries in respect of other matters. Therefore, additions made as a result of such enquiry, were not sustainable.
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Reassessment - Validity - AO made fishing enquiry and made addition on matters not related to reasons recorded for reassessment -
AO formed belief that income of assessee had escaped assessment to the tune of Rs. 17,19,214 being purchases shown from Hawala parties. However, AO made fishing enquiry about many other matters not related to reasons recorded for issuing notice under section 148 and made various additions.Assessee challenged this. Held: Explanation 3 to section 147, inserted by Finance Act, 2009, empowers AO to assess the any income which comes to his notice subsequently even though no reasons have been recorded in respect thereof, however, Explanation 3 of said section does not empower AO to make proving enquiries in respect of other matters. Since AO made fishing enquiry in the course of reassessment proceedings and even allowed legal ground raised by assessee for statistical purposes. Additions made as a result of such enquiry. Except addition made on account of bogus purchases which was the subject-matter of reassessment, were not sustainable.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2009-10
INCOME TAX ACT, 1961
Section 69C
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