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| The Tax Publishers2020 TaxPub(DT) 0493 (Ranchi-Trib) INCOME TAX ACT, 1961
Section 147
Where embargo placed by the first proviso could not be overcome, the legitimacy of notice issued under section 148 after the expiry of four years was vitiated and in that case the entire reassessment proceeding was without jurisdiction and liable to be annulled. Thus, re-assessment order was also liable to be struck down and cancelled as bad in law.
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Re-assessment - Full and true disclosure - Notice under section 148 issued after expiry of four years -
AO reopened the assessment under section 147 alleging that the assessee had not complied with the provisions of Chapter XVII-B including section 194C. Assessee contended that AO had wrongly assumed his jurisdiction for making reassessment because the notice under section 148 had been issued after the expiry of four years without fulfillment of additional conditions imposed under first proviso to section 147. Further, it contended that there was no allegation on the part of the AO that the assessee had failed to disclose any material fact fully and truly at the time of original assessment resulting in alleged escapement of income and therefore, the action of reopening was without any legally sound basis. Thus, the action of the AO was nothing but change of opinion on the same issue based on review of material already placed on record that was not permissible in law. Held: As per first proviso to section 147, the escapement of chargeable income should be by reasons of the failure on the part of assessee to inter-alia disclose fully and truly all material facts necessary for assessment. But, in the instant case, nothing was found in the reasons recorded for reopening that goes to demonstrate that assessee had failed to disclose any material fact relevant for assessment in the original proceedings. Thus, where embargo placed by the first proviso could not be overcome, the legitimacy of notice issued under the provisions of section 148 was vitiated. Hence, the entire reassessment proceeding was without jurisdiction and liable to be annulled and the consequent re-assessment order was also, therefore, liable to be struck down and cancelled as bad in law.
REFERRED : P.V. Doshi v. CIT (1978) 113 ITR 22 (Guj) : 1978 TaxPub(DT) 0606 (Guj-HC),J.S. Parkar v. V.B. Ramachandran & Ors. (1974) 94 ITR 616 (Guj) : 1974 TaxPub(DT) 0197 (Bom-HC)
FAVOUR : In assessee's favour
A.Y. : 2010-11
IN THE ITAT, RANCHI BENCH
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