The Tax Publishers2020 TaxPub(DT) 3635 (Ahd-Trib)

INCOME TAX ACT, 1961

Section 148

Assessment cannot be reopened unless it was established that assessee had failed to disclose fully and truly all material facts necessary for the assessment for that assessment year and nowhere in the order AO had made out that the income had escaped the assessment on account of failure of assessee to disclose all material acts fully and truly, therefore, reassessment was not sustainable.

Reassessment - Power of AO to reopen assessment - No failure by assessee to disclose all material acts fully and truly -

Assessee was engaged in the manufacture of TV fluids, syringe. It was observed from the statement of computation of total income that assessee had added an amount to the total income on account of delay non-payment of employee's contribution towards PF. In view of the provisions of section 36(l)(va), a sum was required to be added to the total income including interest under section 234B. Assessee contended that in the case of assessee, a scrutiny assessment was passed under section 143(3) and assessment was reopened under section 148. This notice was issued after four years from the end of relevant assessment year, and proviso to section 147 safeguards interest of the assessee in such reopening. Where original scrutiny assessment was made under section 143(3) can be reopened if the assessee failed to disclose all material facts fully and truly, however, no such facts were discernible. Therefore, reassessment order was unsustainable. Held: Interdiction provided in the proviso appended to section 147 puts embargo on the power of AO to reopen an assessment in the cases where four years have been expired and the assessment was framed under section 143(3). The assessment cannot be reopened unless it is established that assessee had failed to disclose fully and truly all material facts necessary for the assessment for that assessment year. A perusal of the reasons extracted would indicate that nowhere AO had made out that the income had escaped the assessment on account of failure of the assessee to disclose all material acts fully and truly. Therefore, reassessment was not sustainable.

Relied:Calcutta Discount Company Ltd. v. ITO (1961) 41 ITR 191 (SC) : 1961 TaxPub(DT) 0130 (SC) CIT v. Gujarat State Road Transport Corporation (2014) 366 ITR 170 (Guj) : 2014 TaxPub(DT) 1235 (Guj-HC) Kanak Fabrics v. ITO (2014) 359 ITR 447 (Guj) : 2014 TaxPub(DT) 0686 (Guj-HC) Austin Engineering Co. Ltd. v. JCIT (2009) 312 ITR 70 (Guj) : 2009 TaxPub(DT) 0580 (Guj-HC) Core Healthcare Ltd. (Liquidated Company) v. DCIT [M.A. No.183/Ahd/2019 (In ITA No. 1410/Ahd/2015), dt. 20-8-2019]

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2005-06



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