M/S Sam Portfolio Pvt. Ltd., New Delhi vs Dcit, New Delhi on 8 August, 2023
"Under Explanation 3 if during the course of the proceedings the Assessing Officer comes
to the conclusion that some items have escaped assessment, then notwithstanding that
those items were not included in the reasons to believe as recorded for initiation of the
proceedings and the notice, he would be competent to make assessment of those items.
For every new issue coming before the Assessing Officer during the course of proceedings
of assessment or reassessment of escaped income, and which he intends to take into
account, he would be required to issue a fresh notice under section 148. The Assessing
Officer was satisfied with the justifications given by the assessee regarding the items of
club fees, gifts and presents and provision for leave encashment, but during the
assessment proceedings, he found the deduction under sections 80HH and 80-1 as
claimed by the assessee to be not admissible. He consequently proceeded to make
deductions under sections 80HH and 80-I and accordingly reduced the claim on these
accounts. The very basis of initiation of proceedings for which reasons to believe were
recorded was income escaping assessment in respect of items of club fees, gifts and
presents, etc., but while these items were not disturbed, the Assessing Officer proceeded
to reduce the claim of deduction under sections 80HH and 80-1 which was not
permissible. The Tribunal was right in holding that the Assessing Officer had the
jurisdiction to reassess issues other than the issues in respect of which proceedings were
11
ITA No. 1084/JP/2024
DCIT vs. Harsh Stock Portfolio Pvt. Ltd.