INCOME TAX ACT, 1961

Section 147

Reassessment - Change of opinion - Failure of disclosure' of not effecting the TDS -

Assessee having been found fault with in not making the Tax Deduction at Source during the Financial Year 2009-10 was assailing the re-opening of proceedings under section 147. After service of notice, Revenue having entered appearance through their Panel Counsel resist the writ petition making submission in justification of order essentially contending that the answering Revenue had formed an opinion as to 'failure of disclosure' of not effecting the TDS and therefore, action could not be faltered. Held: Proviso going by its text and context needs to be construed strictly since the re-opening of an assessment is a power of an extraordinary nature. Reasons nowhere states that there was failure on the part of assessee to disclose the alleged non-deduction of TDS. What was stated was that assessee had failed to deduct the TDS and Proviso employs the expression 'by reason of the failure on the part of assessee to disclose fully and truly all material facts'. Therefore, appeal of assessee was allowed and reassessment notice was quashed.

AppliedMewalal Dwarka Prasad v. ITO & Anr. (1989) 176 ITR 529 (SC) : 1989 TaxPub(DT) 0928 (SC) Mohinder Singh Gill & Anr. v. The Chiief Election Commissioner & Ors. AIR 1978 SC 851 I.P. Patel and Co. v. Dy. CIT (2012) 346 ITR 207 (Guj) : 2011 TaxPub(DT) 1709 (Guj-HC) Hindustan Lever Ltd. v. R.B. Wadkar, Asstt. CIT & Ors. (2004) 268 ITR 332 (Bom) : 2004 TaxPub(DT) 1424 (Bom-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2010-11

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