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| The Tax Publishers2020 TaxPub(DT) 0050 (Del-HC) : (2020) 421 ITR 0624 : (2020) 312 CTR 0345 : (2020) 269 TAXMAN 0327 INCOME TAX ACT, 1961
Section 147
Where issue regarding receipt of share capital from two companies was not examined in original assessment and later AO received information from investigation wing as to assessee having received accommodation entries from N and S, in such a situation formation of belief that taxable income had escaped assessment would not suffer from the taint of simplicitor, change of opinion and reassessment notice could not be held as invalid.
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Reassessment - Validity - Assessee pleading to have furnished evidences during original assessment and change of opinion on AO's part -
AO received information from investigation wing as to assessee having received accommodation entries from M/s. N and M/s. 'S' dubious entries. Accordingly, AO issued noticed under section 1489 so as to reopen assessment. Assessee challenged the notice by way of writ petition on the ground that assessee had produced evidence before AO during scrutiny assessment proceeding that amount concerned had been received as share application money.Held: In view of Explanation 1 to section 147, 'production before AO of account books or other evidence from which material evidence could with due diligence have been discovered by AO would not necessarily amount to disclosure. In assessee's case live-link between material information and formation of belief that taxable income had escaped assessment was the fact that assessee admittedly, received monies from M/s. S and M/s. N each. This live-link was actionable as it was found and acted upon within period of limitation under proviso to section 147. A perusal of the assessment Order, showed that AO officer made disallowance under section 14A read with rule 8D apart from making disallowance under section 43B. The aspect of receipt of capital investment from said two companies, namely, M/s. 'S' and M/s. 'N' was not even noticed in the assessment order. Accordingly, formation of belief that taxable income had escaped assessment would not suffer from the taint of simplicitor, change of opinion and reassessment notice could not be held as invalid. Once proceedings are reopened assessee would have full opportunity to meet material evidence that AO may seek to rely upon to re-compute taxable income in accordance with law. Moreover, re-assessment order passed by AO would be open to challenge in appeal under the Act.
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2012-13
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