JUDGMENT A. K. MATHUR, C. J. : All the aforesaid reference cases involve common questions of law and facts and therefore, they are disposed of by this judgment. 2. For convenient disposal of all the aforesaid references, the facts given in M. C. CN. o 546 of 1992 (CIT vs. Gulam Rasool) are taken into consideration. 3. This is an IT reference at the instance of the Revenue and the following question of law has been referred by the Tribunal for opinion of this Court : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that mere issuance of notice under s. 148 of the IT Act, 1961 would take away the jurisdiction of the CIT under s. 263 to revise an assessment order ?" 4. The assessee along with other family members constructed a property at Mission Chowk, Katni. Investment in the said property was disclosed at Rs. 7,09,777 and the assessee owns 1/6th share in it. The assessees valuer valued the cost of construction at Rs. 9,12,000. The AO referred the matter to the Departmental Valuation Officer, and the Departmental Valuation Officer (DVO) estimated the cost of construction at Rs. 12,25,000 according to which the assessees share in difference of cost of construction disclosed and that estimated by the Departmental Valuation Officer, worked out to Rs. 85,830. Subsequently, the assessee filed a revised return under the Amnesty Scheme on 31st March, 1986. In the said revised return, the additional income of Rs. 33,500 from other sources was declared and offered for assessment. The AO completed the assessment on 12th April, 1986 under s. 143(1) accepting Rs. 33,500 only as against actual difference of Rs. 85,830. The said assessment order was cancelled by the CIT by his order under s. 263 of the IT Act, dt. 20th March, 1989. 5. Aggrieved by the order of the CIT under s. 263 of the IT Act, the assessee preferred an appeal before the Tribunal. The assessee contended that the CIT was not justified in invoking the jurisdiction under s. 263, when the AO had already issued notice under s. 148 prior to issue of notice under s. 263 of the IT Act. The assessee relied on the decision of Calcutta High Court in the case of General Beopar Co. (P) Ltd. v. CIT (1987) 167 ITR 86 (Cal). The assessee relied on the decision of Calcutta High Court in the case of General Beopar Co. (P) Ltd. v. CIT (1987) 167 ITR 86 (Cal). As against this, the Departmental Representative referred to a decision in the case of Sharda Trading Co. v. CIT (1984) 149 ITR 19 (Del). After hearing both the parties, the Tribunal held that the CIT was not justified in invoking jurisdiction under s. 263 when the ITO had already issued notice of re-opening the assessment under ss. 147/148 of the IT Act, and hence the Tribunal quashed the proceedings under s. 263 and allowed the appeal. Thereafter, the Department approached the Tribunal for referring the aforesaid question of law and the aforesaid question of law has been referred by the Tribunal for answer of this Court. 6. We have heard the learned counsel for the parties and perused the records. The question as above ITO issued notice under ss. 147/148 of the IT Act. The question is whether the power of the CIT under s. 263 of the IT Act stand denuded or not. "Sec. 263. Revision of orders prejudicial to Revenue. -(1) The CIT may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the AO is erroneous in so far as it is prejudicial to the interest of the Revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing, or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation : For the removal of doubts, it is hereby declared that, for the purposes of this sub-section. - (a) an order of assessment made by the Asstt. CIT or the ITO on the basis of the directions issued by the Dy. CIT under s. 144A, (ii) an order made by the Dy. Explanation : For the removal of doubts, it is hereby declared that, for the purposes of this sub-section. - (a) an order of assessment made by the Asstt. CIT or the ITO on the basis of the directions issued by the Dy. CIT under s. 144A, (ii) an order made by the Dy. CIT in exercise of the powers or in the performance of the functions of an AO conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief CIT or Director General or CIT authorised by the Board in this behalf under s. 120, (b) record includes all records relating to any proceeding under this Act available at the time of examination by the CIT, (c) where any order referred to in this sub-section and passed by the AO had been the subject matter of any appeal, the powers of the CIT under this sub-section shall extend to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-s. (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-s. (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Tribunal, the High Court or the Supreme Court. Explanation : In computing the period of limitation for the purposes of sub-s. (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to s. 129 and any period during which any proceeding under this section is stayed by an order or injunction under this section is stayed by an order or injunction of any Court shall be excluded." Secs. 147 and 148 of the IT Act read as under :- "Sec. 147. Income escaping assessment. - If the AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of ss. 147 and 148 of the IT Act read as under :- "Sec. 147. Income escaping assessment. - If the AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of ss. 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereinafter in this section and in ss. 148 to 153 referred to as the relevant assessment year). Provided that where an assessment under sub-s. (3) of s. 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under s. 139 or in response to a notice issued under sub-s. (1) of s. 142 or s. 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. Explanation 1 : Production before the AO of account books or other evidence from which material evidence could with due diligence have been discovered by the AO will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 1 : Production before the AO of account books or other evidence from which material evidence could with due diligence have been discovered by the AO will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2 : For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely :- (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the AO that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; (c) Where an assessment has been made, but - (i) income chargeable to tax has been underassessed; or (ii) such income has been assessed at too low a rate; or (iii) such income has been made the subject of excessive relief under this Act; or (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed". "Sec. 148. Issue of notice where income has escaped assessment. - (1) Before making the assessment, reassessment or recomputation under s. 147, the AO shall serve on the assessee a notice requiring him to furnish within such period, not being less than thirty days, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed, and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under s. 139". In fact, the operation of both these sections is somewhat similar and it is the ITO who under s. 147 and 148 of the IT Act can reopen the assessment on account of the income escaping assessment. In fact, the operation of both these sections is somewhat similar and it is the ITO who under s. 147 and 148 of the IT Act can reopen the assessment on account of the income escaping assessment. As against this if the CIT under s. 263 of the Act, finds that the assessment order is prejudicial to the interest of the Revenue, then he can reopen the issue. Therefore, virtually, both these provisions are for reopening the assessment - one at the ITO level and other at the level of the CIT. Both can invoke their power after assessment order, but both are not exclusive of each other. 7. Shri V. K. Tankha learned counsel for the applicant/Revenue has submitted that simply because notice under s. 148 of the Act has been issued then it does not mean that the whole assessment proceedings made earlier are wiped out. In fact, the learned counsel submitted that assessment order will remain in a fluid state i.e. it will lose its finality. The learned counsel has invited our attention to the case of CIT v. Sun Engineering works (P) Ltd. (1992) 198 ITR 297 (SC) in support of his contention. 8. As against this, Shri G. N. Purohit learned counsel for the assessee, has submitted that the fact of issuance of notice under ss. 147 and 148 of the Act is that the whole proceedings stand wiped out and in that connection, the learned counsel has invited our attention to various decisions of the High Courts, i.e., Calcutta, Rajasthan and Allahabad in support of his contentions. We need not refer to all these decisions because all these decisions were considered by the Hon. Supreme Court in Sun Engineering Works (supra). Hon. Supreme Court in Sun Engineering Works (supra) after considering all the conflicting judgments of various High Courts and after reviewing the decisions of the Hon. Supreme Court in V. Jaganmohan Rao & Ors. v. CIT (1970) 75 ITR 373 (SC) laid down the law. In Sun Engineering Works (supra), their Lordships have explained the principle as to what is the effect of issuance of notice under s. 148. v. CIT (1970) 75 ITR 373 (SC) laid down the law. In Sun Engineering Works (supra), their Lordships have explained the principle as to what is the effect of issuance of notice under s. 148. It was observed : "The principle laid down by this Court in V. Jaganmohan Rao v. CIT (1970) 75 ITR 373 (SC) therefore, is only to the extent that once an assessment is validly reopened by issuance of a notice under s. 22(2) of the 1922 Act (corresponding to s. 148 of the Act), the previous under-assessment is set aside and the ITO has the jurisdiction and duty to levy tax on the entire income that had escaped assessment during the previous year. What is set aside is, thus, only the previous under-assessment and not the original assessment proceedings. An order made in relation to the escaped turnover does not affect the operative force of the original assessment, particularly if it has acquired finality, and the original order retains both its character and identity. It is only in cases of "under-assessment" based on cls. (a) to (d) of Expln. 1 to s. 147, that the assessment of tax due has to be recomputed on the entire taxable income. The judgment in V. Jaganmohan Raos case (supra), therefore, cannot be read to imply as laying down that, in the reassessment proceedings validly initiated, the assessee can seek re-opening of the whole assessment and claim credit in respect of items finally concluded in the original assessment. The assessee cannot claim recomputation of the income or redoing of an assessment and be allowed a claim which he either failed to make or which was otherwise rejected at the time of original assessment which has since acquired finality. The assessee cannot claim recomputation of the income or redoing of an assessment and be allowed a claim which he either failed to make or which was otherwise rejected at the time of original assessment which has since acquired finality. Of course, in the reassessment proceedings, it is open to an assessee to show that the income alleged to have escaped assessment has in truth and in fact not escaped assessment but that the same had been shown under some inappropriate head in the original return, but to read the judgment in V. Jaganmohan Raos case (supra), as laying down that assessment wipes out the original assessment and that reassessment is not only confined to "escaped assessment" or "under-assessment" but to the entire assessment for the year and starts the assessment proceedings de novo giving the right to an assessee to reagitate matters which he had lost during the original assessment proceedings, which had acquired finality, is not only erroneous but also against the phraseology of s. 147 of the Act and the object of reassessment proceedings. Such an interpretation would be reading that judgment totally out of context in which the questions arose for decision in that case. It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete "law" declared by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. A decision of this Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, the Courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this Court, to support their reasonings. In Madhav Rao Jivaji Rao Scindia Bhadur vs. Union of India (1971) 2 SCR 9 : AIR 1971 SC 530 this Court cautioned : "It is not proper to regard a word, a clause or a sentence occurring in a judgment of the Supreme Court, divorced from its context, as containing a full exposition of the law on a question when the question did not even fall to be answered in that judgment". Although s. 147 is part of a taxing statute, it imposes no charge on the subject but deals merely with the machinery of assessment and in interpreting a provision of that kind, the rule is that that construction should be preferred which makes the machinery workable. Since the proceedings under s. 147 of the Act are for the benefit of the Revenue and not an assessee and are aimed at garnering the escaped income of an assessee, the same cannot be allowed to be converted as provisional or review proceedings at the instance of the assessee, thereby making the machinery unworkable". The law which has been laid down by their Lordships after reviewing the judgment of Jaganmohan Raos case (supra), is that under ss. 147/148 of the Act, the order of assessment is not wiped out nor does it become non est as was observed by the Hon. Supreme Court in Jaganmohan Raos case (supra). Therefore, the order survives to a limited extent and not wholly wiped out. It will remain in suspended animation till it is finally decided by the ITO. 9. Now, the question is what is the effect of the notice issued under s. 147 on s. 263. This was considered by the Delhi High Court in the case of Sharda Trading Co. v. CIT (supra). In that case, their Lordships referred to Jaganmohan Raos case (supra) and took the view that it will not wipe out the earlier assessment order. However, Jaganmohan Raos case (supra) has already been explained by the Honble Supreme Court in Sun Engineering Works case (supra) and the view taken by the Delhi High Court appears to be correct that the jurisdiction of the CIT under s. 263 is not taken out. However, Jaganmohan Raos case (supra) has already been explained by the Honble Supreme Court in Sun Engineering Works case (supra) and the view taken by the Delhi High Court appears to be correct that the jurisdiction of the CIT under s. 263 is not taken out. It was observed by Delhi High Court : "The scope of jurisdiction of the CIT under s. 263 empowers him to make an order enhancing or modifying the order of assessment or cancelling an assessment and making a fresh assessment. When that is done, the original order of assessment made by the ITO ceases to exist and would merge in the order of the CIT in the case of enhancement or modification. Once the CIT revises an order of assessment, the reassessment proceedings started under s. 147 would come to an end as there is no (subsisting) order of the ITO. If the reassessment is made by the ITO in pursuance of the proceedings initiated under ss. 147 and 148, then on reassessment the entire original assessment is set aside and ceases to exist with the result that the original assessment order which the CIT was seeking to revise becomes non est. By reassessment, the original order is substituted by an order of reassessment which is not open to revision under s. 263 of the Act". Similar view was taken by this Court in a very brief judgment in Jiwaji Rao Sugar Co. v. CIT (1989) 176 ITR 182 (MP) that the assessee was unable to satisfy that notice under s. 147 of the Act will affect the jurisdiction of the CIT under s. 263 of the Act. Be that as it may, now in view of the changed position of law as laid down by the Hon. Supreme Court in Sun Engineering Works (supra), all the judgments taking a contrary view are no more good law, therefore, we are not referring those decisions. Therefore, we are of the opinion that on the issuance of notice under ss. 147/148 of the Act by the ITO the power under s. 263 of the Act of the CIT is not denuded and both the provisions can exist without there being any conflict in the matter. Hence, we answer the aforesaid question in favour of the Revenue and against the assessee. 10. 147/148 of the Act by the ITO the power under s. 263 of the Act of the CIT is not denuded and both the provisions can exist without there being any conflict in the matter. Hence, we answer the aforesaid question in favour of the Revenue and against the assessee. 10. However, before parting with the case, we may mention that Shri G. N. Purohit, learned counsel for the assessee, has submitted that after the order was passed by the CIT under s. 263, the ITO had already decided the matter and against that assessment the assessee preferred an appeal before the CIT(A). Meanwhile the Tribunal cancelled the order of the CIT(A) and the CIT(A) set aside the assessment order on account of decision given by the Tribunal on this technical ground alone. Now that order cannot survive because of the view taken by the Tribunal in the present case, and against that order the Revenue has already preferred an appeal before the Tribunal which is pending. Therefore, the learned counsel for the assessee has submitted that his right to agitate the matter after this answer will be prejudiced. Since we have already answered the aforesaid question in favour of the Revenue and against the assessee, the Tribunal shall reconsider the matter in the light of the answer given by us and decide the matter in accordance with law. 11. In the result, we answer the aforesaid question in favour of the Revenue and against the assessee. All other references are accordingly disposed of in the light of above reference.