INCOME TAX ACT, 1961

Section 148

Reassessment - Notice beyond four years - Failure to disclose fully and truly all material facts substantialed by detailed investigation -

AO received information from investigation wing as to assessee being engaged in providing accommodation entries and income from commission, ranging from 0.5% to 1% was not disclosed and thereby, income chargeable to tax had escaped assessment. Accordingly, AO issue noice under section 148 after expiry of four years from the end of relevant assessment year so as to reopen assessment. Assessee challenged the notice by way of writ petition. Held: As emerged from the record, assessee had filed RoI for the assessment year 2012-13 disclosing income of Rs. 1,42,694 despite showing a huge turnover of Rs. 24,10,82,501 in the audited books of account. Further, a detailed investigation was carried out by Investigation Wing and outcome prima facie substantiated the fact that assessee was the provider of accommodation entries. Accordingly, there was direct nexus/live link between material coming to notice of AO for formation of belief that there had been escapement of income of assessee from assessment because of his failure to disclose fully and truly all material facts and, therefore, reassessment notice was sustained as valid.

Relied:ITO v. Lakhmani Mewal Das (1976) 103 ITR 437 (SC) : 1976 (3) SCC 757 : 1976 TaxPub(DT) 742 (SC) and CAV Judgment, dated 6-8-2021 Special Civil Application No. 22613 of 2019.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2012-13

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