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2022 (8) TMI 285 - ITAT KOLKATAReopening of assessment u/s 147 - amount u/s 35D on account of preliminary expenses in Schedule 12D - HELD THAT:- Assessee has not disallowed this expenditure in the computation of income and accordingly the income has escaped due to failure on the part of the assessee to disclose truly and fully all material facts. We note from the reasons recorded that all the information were duly disclosed in the books of account, audited financial statement and return of income filed by the assessee and it cannot be construed to mean that it is something in respect of which the assessee has not truly and fully disclosed all the material facts leading to escapement of income. In fact, the assessee has disclosed all the material facts in respect of increase in the authorised capital in the balance sheet and claimed on account of 1/5th preliminary expenses u/s 35D of the Act. Under these facts and circumstances, we find force in the contentions of the A.R. that the reopening was made in violation to provisions as contained in first proviso to section 147 of the Act which stipulates that reopening cannot be made where the assessment was framed u/s 143(3) of the Act after a period of four years from the end of relevant assessment year if the escapement of income has occurred due to non-disclosure of material facts by the assessee which ultimately led to the escapement of the income. But this is not the case before us. CIT(A) has quashed the re-opening of assessment u/s 147 of the Act and also assessment order by passing a speaking and reasoned order. In our considered opinion there is not failure of the kind on the part of the assessee and therefore, the reopening of the assessment has been made incorrectly and in violation to 1st proviso to section 147 of the Act and cannot be sustained as has been held by ld CIT(A). The Hon’ble Bombay High Court in the case of Tao Publishing (P) Ltd[2015 (1) TMI 1162 - BOMBAY HIGH COURT], Sound Casting Pvt. Ltd. [2012 (4) TMI 248 - BOMBAY HIGH COURT], Hon’ble Delhi High Court in the case of CIT vs. Orient Craft Ltd. [2013 (1) TMI 177 - DELHI HIGH COURT] and in the case of Haryana Acrylic Manufacturing Co. [2008 (11) TMI 2 - DELHI HIGH COURT] have held the reopening made beyond four years has to be in accordance with the first proviso to section 147 of the Act failing which the reopening as well as reassessment order are bad in law. We, therefore respectfully following the above legal position, uphold the order passed by the ld CIT(A) by dismissing the ground no. 1 raised by the revenue.
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