HARSH VARDHAN SINGH,NEW DELHI vs. PCIT- 12, DELHI , NEW DELLHI

Aggrieved by the said order, assessee is in appeal before the Tribunal.

Heard both the parties and perused the material available on record. The main contention of the ld. AR is that the case of the assessee was reopened for making verification of the source of import of paintings worth of Rs. 11,32,525/- and the source of other import of Rs. 40,45,500/- was never the part of the reasons recorded for reopening the assessment. Ld. AO thus submits that the AO had not made any query with respect to the other imports, and therefore, the order cannot be said to be erroneous and prejudicial to the interest of revenue by observing that no verification of the other imports was made by the AO. He submits that during the course of proceedings before the Ld. PCIT, the assessee has filed all the explanations including the sources of the imports made by the assessee. However, it is an admitted position Harsh Vardhan Singh vs. PCIT that the Ld. AO has not make any verification with respect to the import of painting of Rs.40,45,500/- since it was not the part of the reasons recorded.

As per our opinion, once the assessment order is reopened u/s 148 of the Act and addition is made with respect to the issue for which the satisfaction of escapement of income was recorded in the reasons recorded for reopening the assessment, it is settled proposition that in such situation, the AO can make further enquiry, examination and verification on issues which are issues for which no satisfaction was recorded. In the instant case, the AO has failed to make any enquiry with respect to the other imports appearing in the books of accounts including the import of Rs.40,45,500/- of paintings during the year. The Explanation-3 to the erstwhile section 147 was applicable for the year under appeal wherein it is provided that “the Assessing Officer made assessed and reassessed income in respect of any issue which is escaped assessment, such issues come to his notice, and subsequently in the course of this section, notwithstanding that the reasons for such issue have not been concluded in the reasons recorded u/s 148, sub-section 2 of the Act.”

Here it is relevant to state that in the instant case, the AO has made the addition on account of issue for which the satisfaction was recorded for reopening the assessment, therefore, the Assessing Officer has every juri iction to examine and verifying all the other issues come before him during the proceedings and in the instant case the AO has failed to do so. Therefore, the Ld. PCIT on verification of the facts found that there was one more import of painting of Rs. 40,45,500/-, source of which were not enquired by the AO and accordingly, the Ld. PCIT reached to the conclusion that non verification of source of the such import make the reassessment order as erroneous and prejudicial to the interest of the Revenue. 7. As has been observed above, the assessee himself accepted that the AO has not made verification of the second import of Rs.4045,500/- since, it was not part of the reasons recorded. As has been held hereinabove, that once the AO has made the additions on issues for which the satisfaction of escapement of income was recorded and the proceedings were initiated u/s 148 of the Act, it is the duty of the AO to make necessary verification of the other issues which came to his notice subsequently. Under these circumstances, we agree with the revisions order passed by Ld. PCIT that AO should have examined the source of other imports made and, accordingly, we find no error in the order of Ld. PCIT holding the reassessment order as erroneous and prejudicial to the interest of Revenue. Accordingly, all the grounds of appeal raised by the assessee are dismissed.

In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on 05.12.2025. (YOGESH KUMAR U.S) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER