INCOME TAX ACT, 1961

Section 147 & 148

Reassessment - No failure to disclose truly and fully - Notice issued beyond period of four years - Validity--Full and true disclosure by assessee

AO issued notice under section 148 for reopening assessment. Assessee submitted that true and complete disclosures were made by it in the course of original assessment proceedings and upon consideration of such disclosures, the AO made assessment order under section 143(3). Thus, as there was absolutely no failure to make true and full disclosures, there was no jurisdiction to issue notice under section 148 after expiry of period of 4 years from the date of the assessment. Revenue contended that the assessee vide a letter admitted during course of original assessment proceedings that it violated the provisions of section 80-IB and further, failed to make true and full disclosures, thus, there was absolutely no jurisdictional error in issuing the impugned notice. Held: Since, it was virtually an admitted fact that the assessee submitted a list of flat owners and further, itself pointed out that there might be breach in so far as sale of some of the flats were concerned, thus, it could really not be said by the Revenue that there was no truthful or complete disclosures on the part of the assessee in the course of the assessment proceedings itself. Merely making of bald statement that the assessee had not disclosed fully and truly all the material facts was really never sufficient in such matters. Further, in order to sustain a notice seeking to reopen assessment beyond normal period of 4 years, it is necessary for the Revenue to establish, at least, prima facie that there was failure to disclose fully and truly all material facts necessary for the assessment for that assessment year. However, in the instant case, the Revenue failed to establish such precondition even prima facie. Rather, the material on record established that there were full and true disclosures of all material facts necessary for the assessment. Therefore, the impugned notice issued under section 148 was invalid and hence, the reassessment was not sustainable.

Distinguished:ACIT v. Rajesh Jhaveri Stock Brokers P. Limited (2007) 291 ITR 0500 (SC) : 2007 TaxPub(DT) 1257 (SC) Raymond Woollen Mills Limited v. ITO & Ors. 1999 TaxPub(DT) 0348 (SC) S. Narayanappa & Others v. CIT (1967) 63 ITR 219 (SC) : 1967 TaxPub(DT) 0198 (SC) Calcutta Discount Company Limited v. ITO & Another (1961) 41 ITR 191 (SC) : 1961 TaxPub(DT) 0130 (SC)

REFERRED : Zuari Foods and Farms Pvt. Ltd. v. ACIT [WP No. 1001 of 2007, dt. 11-4-2018] Bombay Stock Exchange Ltd. v. DDIT (Exemption) (2014) 365 ITR 181 (Bom) : 2014 TaxPub(DT) 2678 (Bom-HC) Parveen P. Bharucha v. DCIT (2012) 348 ITR 325 (Bom) : 2012 TaxPub(DT) 3219 (Bom-HC) Hindustan Lever Ltd. v. R.B. Wadkar & Others (2004) 268 ITR 232 (Bom) : 2004 TaxPub(DT) 1424 (Bom-HC)

FAVOUR : In assessee's favour

A.Y. :

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