| The Tax Publishers2019 TaxPub(DT) 1966 (Del-HC) INCOME TAX ACT, 1961
Section 147
It is only tangible material outside the record based upon fresh information, which can afford a second chance to the Revenue, to look into an assessments originally completed. Further, if full disclosure is made, AO is under an obligation to bring to tax all amounts; his inability to do so, would not clothe the Revenue with the power to reassess the income, which could and should have been brought to tax in first instance if such full disclosure were made. Accordingly, impugned reassessment notice and all consequent proceedings were quashed.
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Reassessment - Validity - Full and material disclosure made - AO's inability to tax the amounts, now sought to tax
AO reopened the assessment under section 147 by recording his reasons to believe that since assessee was a shareholder of more than 20%, total amount received by him was liable to be treated as deemed dividend under section 2(22)(e). Assessee submitted that since full and material disclosure was made, AO's inability to analyze the facts and bring to tax the amounts, which were now sought to tax could not afford him a second chance to look into assessments originally completed and the so called fresh material was nothing but what existed on the record and was a subject matter of query by AO. Held: Since AO proceeded with the inquiry even after being told that assessee was a substantial shareholder of company, the inability of AO to take appropriate action to bring to tax those amounts, would not afford him a second chance to look into assessments originally completed. Accordingly, impugned reassessment notice and all consequent proceedings were quashed.
Relied:CIT, Delhi v. M/s. Kelvinator of India Limited (2010) 320 ITR 561 (SC) : 2010 TaxPub(DT) 1335 (SC),Calcutta Discount Company Limited v. ITO, Companies District I, Calcutta, & Anr. (1961) 41 ITR 191 (SC) : 1961 TaxPub(DT) 130 (SC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
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