INCOME TAX ACT, 1961

Section 147, Proviso

Reassessment-Beyond four years - Beyond four years - No-failure to disclose fully and truly all material facts -

AO reopened assessment after expiry of four years from the end of relevant assessment year and made addition on account of unexplained share capital. Assessee took plea of proviso to section 147.Held: Period of limitation can be extended to six years under first proviso to section 147 only if revenue can establish that assessee failed to disclose fully and truly all primary material facts necessary for assessment. In the instant case, assessee had filed during original assessment proceedings, copy of PAN card, copy of Bank Accounts of investors, acknowledgment of return of income of investors, confirmation of investors. These were all primary evidences which assessee had filed and there was no further query from AO and hence, there was no failure on part of assessee to disclose full and true material facts. Accordingly, reopening of assessment beyond four years was hit by proviso to section 147 and therefore, reassessment was quashed as invalid.

Relied:Phool Chand Bajrang Lal v. ITO & Anr. (1993) 203 ITR 456 (SC) : 1993 TaxPub(DT) 1453 (SC)