Judgment ( 1. ) THIS order shall also govern disposal of IT Appeal No. 39 of 2000, as both the appeals relate to the same assessee and raise identical questions of law. ( 2. ) THE appellant, State Bank of Indore has filed these appeals under the provisions of Section 260a of the IT Act, 1961, which have been admitted on the following questions of law : (a) Whether in the facts and circumstances of the case, the learned Tribunal was justified in confirming the action of AO (respondent No. 3) of initiating the proceedings under Section 147/148 of the Act ?; (b) Whether in the facts and circumstances of the case, notice under Section 147 was bad in law and without jurisdiction ?; (c) Whether in the facts and circumstances of the case, provisions under Section 147 without existence of conditions mentioned under els. (a) and (b) of the said section and merely by applying Clause (c) to Expln. 2 of that section justify the initiation of proceedings ?; (d) Whether in the facts and circumstances of the case, the action of reopening was merely a change of opinion ?; (e) Whether in the facts and circumstances of the case, the learned Tribunal erred in holding that the disallowances under Section 40a (5) (c) of the Act stands since the provisions of Section 40a (5) (c) (ii) of the Act were applicable ?; (f) Whether in the facts and circumstances of the case, the learned Tribunal wrongly restricted the deduction under Section 32ab in place of the claim made by the petitioner ?; (g) Whether the learned Tribunal erred in disallowing the claim of the petitioner in respect of purchase of computers in terms of the provisions of Section 32ab (4) (a) of the Act on the ground that the computers are not plant and machinery ?; (h) Whether the Tribunal was justified in holding that the deposit made with IDBI was not made before the expiry of 6 months from the end of the previous year or before furnishing return of income whichever is earlier ? ( 3. ) THE appellant, State Bank of Indore is assessed to income-tax. The bank filed its return of income for the, years 1987-88 and 1988-89 within time and declared a total income of Rs. 3,27,14,586 for the year 1987-88 and Rs. 9,34,23,990 for the asst. yr. 1988-89. ( 3. ) THE appellant, State Bank of Indore is assessed to income-tax. The bank filed its return of income for the, years 1987-88 and 1988-89 within time and declared a total income of Rs. 3,27,14,586 for the year 1987-88 and Rs. 9,34,23,990 for the asst. yr. 1988-89. According to the appellant, the assessment was computed under Section 143 (1) of the Act, but subsequently the respondents issued notices under Section 148 of the Act r/w Section 147 thereof to seek reopening of the assessment. In response to the notice in relation to the assessments for both the years, the appellant-bank filed return protesting against the reopening, on the ground that it was contrary to law and also suffered in propriety in the factual matrix and wanting in jurisdiction. It was, in particular, pointed out that there was no ground for believing that any income had escaped assessment or any income had been subjected to excessive relief and all facts and sources of income had been truly and fully disclosed in the original return. It was also pointed out that exhaustive notes had been appended to the return in support of the facts and figures and the AO had, therefore, full opportunity to frame the assessment on the basis of the material on record. The AO, however, passed an assessment at Rs. 7,49,80,609 and Rs. 11,74,63,640, respectively, for the above assessment years. The appellant preferred separate appeals which were partly allowed, Further appeals to the Tribunal, though partly allowed, were dismissed in respect of the substantial part by the respondent Tribunal. The Tribunal maintained the action of the AO in respect of the reopening of the assessment. It is against the order of the respondents with regard to the reopening of the assessment and refusal to grant benefit under Section 32ab of the IT Act that the assessee has preferred the above appeals for different assessment years on the question of law formulated and reproduced hereinabove. ( 4. ) LEARNED Counsel for the assessee has invited attention to Section 147 of the IT Act as it stood in the relevant year and pointed out that though the letter of the Revenue refers to Clause (c) of Expln. 1 of Section 147 as the source of authority for initiating the action for reopening, the said clause under the Expln. ) LEARNED Counsel for the assessee has invited attention to Section 147 of the IT Act as it stood in the relevant year and pointed out that though the letter of the Revenue refers to Clause (c) of Expln. 1 of Section 147 as the source of authority for initiating the action for reopening, the said clause under the Expln. 1 does not grant any independent power to the authorities de hors the power emanating from the main provision contained in Section 147 (a) and (b ). The contention of learned Counsel for the Revenue is that the intimation issued under Section 143 of the IT Act is not assessment under the Act and if during the course of the assessment information is sought, it is open to the authority to seek such information and to frame the assessment and, therefore, the issuance of notices under Section 148 of the IT Act, in view of the provision of Section 147 thereof, is fully proper, legal and justified. ( 5. ) TO appreciate the first contention of learned Counsel for the assessee as the same relates to first three questions formulated and reproduced hereinabove, it would be appropriate to reproduce the provision of Section 147 of the IT Act obtaining during the relevant assessment year. Sec. 147 during the said period read as under : Section 147. If- (a) the ITO has reason to believe that, by reason of the omission or failure on the part of an assessee to make a return under Section 139 for any assessment year to the ITO or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or (b) notwithstanding that there has been no omission or failure as mentioned in Clause (a) on the part of the assessee, the ITO has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be for the assessment year concerned (hereafter in Sections 148 to 153 referred to as the relevant assessment year ). Explanation 1--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 income chargeable to tax has been underassessed; or (b) where such income has been assessed at too low a rate; or (c) where such income has been made the subject of excessive relief under this Act or under the Indian IT Act, 1922 (XI of 1922) ; or ( 6. ) CLAUSE (a) of Section 147 contemplates a situation where there is a failure on the part of the assessee to make a return under Section 139 for any assessment year to the ITO or to disclose fully and truly all material facts necessary for his assessment for that year and consequent escapement of income chargeable to tax. Clause (b) contemplates the situation where though there has been no omission or failure as contemplated by Clause (a), but ITO has received some information on the basis whereof he has reason to believe that income chargeable to tax has escaped assessment. In these two situations, the AO can assess or reassess such income or recompute the loss or the depreciation allowance subject to adherence to Sections 148 to 153, In order to bring the cases of underassessment, assessment at too low a rate and of excessive relief granted under the Act within the mischief of escaped assessment, Expln. 1 appearing under Section 147 includes such cases in cases of escaped assessment. Thus, by fiction the cases of underassessment, assessment of income at too low a rate and the cases of income where excessive relief has been granted are treated to be cases of escaped assessment. While learned Counsel for the assessee maintains that the cases covered by Expln. 1 in els (a), (b) and (c) would also be treated as cases of escaped assessment where it is necessary for the Department to show that conditions laid down in Clause (a) or (b) of s, 147 exist for issuing notice under Section 148, learned Counsel for the Revenue maintains- that Expln. 1 carves out an exception and the condition prescribed for initiating proceedings under Clause (a) and Clause (b) of Section 147 of the IT Act do not apply for making/reopening assessment as per els, (a), (b) and (c) of Expln. 1. ( 7. 1 carves out an exception and the condition prescribed for initiating proceedings under Clause (a) and Clause (b) of Section 147 of the IT Act do not apply for making/reopening assessment as per els, (a), (b) and (c) of Expln. 1. ( 7. ) WE are of the view that insofar as the Explanation is concerned, it merely provides for certain contingencies in which there may be doubt as to whether the cases covered by them would amount to escaped assessment. Thus, to bring such cases also within the parameters of escaped assessment, the Explanation has been appended. By doing so, it does not appear that the legislature has intended to do away with the requirement laid down in s, 147 for initiating proceedings in accordance therewith. Thus, for all proceedings covered under the Explanation, there should be in existence the conditions either specified in Clause (a) or Clause (b) as condition precedent before the proceedings can be initiated against the assessee. ( 8. ) THERE is no dispute that it was not on account of or as a consequence of information in his possession that the AO harboured any reason to believe that income chargeable to tax had escaped assessment. From the letters sent by Dy. GIT, dt. 25th Sept. , 1992 for the asst. yr. 1988-89 the reason for issuing the notices has been stated to be under: During the course of assessment proceedings for asst. yr. 1989-90, and scrutiny of appellate orders of asst. yrs. 1985-86 and 1986-87 it was noticed that while making the assessment for asst. yr. 1988-89 at Rs. 9,34,23,990 on 23rd March, 1989 the additions/disallowances on following points have not been made : 1. Interest on bad and doubtful and sticky loans. 2. Expenses disallowable under Section 40a (5) (c ). 3. Gratuity amount diaallowable under Section 40a (7 ). 4. Staff welfare fund, staff welfare scholarship and bonus. 5. Public relation expenses of Rs. 2,52,362. 6. Subsidy received on special development fund. 7. Disallowance out of sundry expenses. 8. Brokerage expenses incurred in connection with immovable properties claimed as revenue expenditure . ( 9. ) LOSS on sale of securities. ( 10. ) DEPRECIATION on investments of Rs. 1,22,18,229. ( 11. ) DEDUCTION under Section 32ab. ( 12. ) TAX not paid to Aurangabad Municipality upto 31st Dec. , 1987 but debited to books of account. ( 13. 8. Brokerage expenses incurred in connection with immovable properties claimed as revenue expenditure . ( 9. ) LOSS on sale of securities. ( 10. ) DEPRECIATION on investments of Rs. 1,22,18,229. ( 11. ) DEDUCTION under Section 32ab. ( 12. ) TAX not paid to Aurangabad Municipality upto 31st Dec. , 1987 but debited to books of account. ( 13. ) LEASE premium on land claimed as depreciation @ 100 per cent. In view of the above, I have reason to believe that income chargeable to tax has escaped the assessment within the meaning of Section 147 of the IT Act, 1961. Issue notice under Section 148. 9. From the reasons ascribed, it does not appear that any fresh information had been received either from within or from without the Department. We are, therefore, of the opinion that in the facts and circumstances of the case question No. (a), question No. (b) and question No. (c) deserve to be answered in favour of the assessee and against the Revenue. Accordingly, we do so. 10. As regards question No. (d) we find that the same does not require any decision as we have already observed that the authority did not have any information as contemplated by Section 147 (b) for initiating the proceedings. So far as questions (e), (f), (g) and (h) are concerned, we find that these questions have been formulated on the basis of the findings recorded by the taxing authorities on facts. Thus, these questions are answered against the assessee and in favour of the Revenue. This appeal is accordingly partly allowed with no order as to costs. The respondents shall take the necessary steps consistent with the direction contained herein .