Reassessment Claim of Fresh Reliefs, Deductions or Rebates in Reassessment Proceedings

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The Tax Publishers Income Tax--Reassessment Claim of Fresh Reliefs, Deductions or Rebates in Reassessment Proceedings Subhodh Sharma The judiciary have expressed different views regarding new claims in reassessment proceedings. The learned author discusses the issue with the help of decided cases. 1. Nature of Reassessment proceedings The proceedings under Section 147 are not intended for the benefit of the assessee but only for the benefit of the revenue, hence no relief or claim can be pressed during the course of re-assessment proceedings as held in Keval Das Ranchhodas v. CIT (1968) 68 ITR 842 (Bom). In Inder Singh Gill v. CIT (1963) 47 ITR 284 (Bom), it was held that the scope of Section 34 (now Section 147) is limited. It is not open to the assessee to agitate that the income which has already been computed be re-computed. During reassessment proceedings, it is not open to the assessee to seek to re-opening of the whole assessment for allowing credits in respect of such items which had been over-assessed. In Dr. Ravishankar Tapa v. CIT (1987) 165 ITR 81 (MP), where the assessee contended that in the proceedings for reassessment under Section 147 it is open to the assessee to point out mistakes in the original assessment which were made to his detriment even though he did not make any grievance about it either in the proceedings of original assessment or thereafter by appeal, it was held that the assessee's contention was not correct. In Sir Sadilal & Sons v. CIT (1973) 92 ITR 433 (All), it was held that claim for expenditure which had been disallowed during original assessment cannot be re-agitated on assessment being re-opened for bringing to tax the income which had escaped assessment. But the Rajasthan High Court in CIT v. Rangnath Bangur (1984) 149 ITR 487 (Raj), held that if as a result of the reassessment proceedings a new total income is arrived at by inclusion of the income which had escaped assessment, the amount of tax payable by the assessee will have to be determined afresh. The assessing officer will be required to re-determine the amount of tax payable by the assessee ignoring the original proceedings. The original order stands superseded and the entire assessment proceedings start afresh. The finality of the original assessment order is wiped out when the entire matter relating to determination of the total income and tax payable by the assessee is re-opened. The assessee cannot be estoppel from claiming rebate in the course of re-assessment proceedings or in the appeal against such proceedings, merely on the ground that no such objection was raised by the assessee in the original assessment proceedings or in the appeal filed therefrom. It may, however, be made clear that if a question is expressly raised in the original assessment proceedings and is decided against the assessee or a ground is raised in the appeal against the original assessment order and the same is repelled by the Appellate Assistant Commissioner or by the Tribunal in appeal against the original assessment order, then such a question cannot ordinarily be allowed to be raised again in the course of re-assessment proceedings or in the appeal arising therefrom. But if no such question was raised in original assessment proceedings or in appeal or further appeal filed against the original order, then there could be no prohibition against the assessee raising such a question relating to computation of the amount of tax payable by him at the time of reassessment or in appeals against the re-assessment order before the Appellate Assistant Commissioner or the Tribunal. Thus, where the assessee was entitled to rebate on dividend income assessed originally, but did not claim it in assessment nor in appeal nor even when the income was re-assessed, but claimed the rebate in appeal against the re-assessment order, he was entitled to make the claim. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--Reassessment

Claim of Fresh Reliefs, Deductions or Rebates in Reassessment Proceedings

Subhodh Sharma

The judiciary have expressed different views regarding new claims in reassessment proceedings. The learned author discusses the issue with the help of decided cases.

1. Nature of Reassessment proceedings

The proceedings under Section 147 are not intended for the benefit of the assessee but only for the benefit of the revenue, hence no relief or claim can be pressed during the course of re-assessment proceedings as held in Keval Das Ranchhodas v. CIT (1968) 68 ITR 842 (Bom). In Inder Singh Gill v. CIT (1963) 47 ITR 284 (Bom), it was held that the scope of Section 34 (now Section 147) is limited. It is not open to the assessee to agitate that the income which has already been computed be re-computed. During reassessment proceedings, it is not open to the assessee to seek to re-opening of the whole assessment for allowing credits in respect of such items which had been over-assessed. In Dr. Ravishankar Tapa v. CIT (1987) 165 ITR 81 (MP), where the assessee contended that in the proceedings for reassessment under Section 147 it is open to the assessee to point out mistakes in the original assessment which were made to his detriment even though he did not make any grievance about it either in the proceedings of original assessment or thereafter by appeal, it was held that the assessee's contention was not correct. In Sir Sadilal & Sons v. CIT (1973) 92 ITR 433 (All), it was held that claim for expenditure which had been disallowed during original assessment cannot be re-agitated on assessment being re-opened for bringing to tax the income which had escaped assessment.

But the Rajasthan High Court in CIT v. Rangnath Bangur (1984) 149 ITR 487 (Raj), held that if as a result of the reassessment proceedings a new total income is arrived at by inclusion of the income which had escaped assessment, the amount of tax payable by the assessee will have to be determined afresh. The assessing officer will be required to re-determine the amount of tax payable by the assessee ignoring the original proceedings. The original order stands superseded and the entire assessment proceedings start afresh. The finality of the original assessment order is wiped out when the entire matter relating to determination of the total income and tax payable by the assessee is re-opened. The assessee cannot be estoppel from claiming rebate in the course of re-assessment proceedings or in the appeal against such proceedings, merely on the ground that no such objection was raised by the assessee in the original assessment proceedings or in the appeal filed therefrom. It may, however, be made clear that if a question is expressly raised in the original assessment proceedings and is decided against the assessee or a ground is raised in the appeal against the original assessment order and the same is repelled by the Appellate Assistant Commissioner or by the Tribunal in appeal against the original assessment order, then such a question cannot ordinarily be allowed to be raised again in the course of re-assessment proceedings or in the appeal arising therefrom. But if no such question was raised in original assessment proceedings or in appeal or further appeal filed against the original order, then there could be no prohibition against the assessee raising such a question relating to computation of the amount of tax payable by him at the time of reassessment or in appeals against the re-assessment order before the Appellate Assistant Commissioner or the Tribunal. Thus, where the assessee was entitled to rebate on dividend income assessed originally, but did not claim it in assessment nor in appeal nor even when the income was re-assessed, but claimed the rebate in appeal against the re-assessment order, he was entitled to make the claim.