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2014 (9) TMI 4 - HC - Income TaxValidity of notice u/s 148 – Full and True disclosure - Held that:- While the AO mentioned that income had escaped assessment because of the failure on the part of the assessee to fully and truly disclose the material facts for assessment, he has not indicated as to which material fact had not been fully and truly disclosed by the assessee - Relying upon Rural Electrification Corporation Ltd. vs. Commissioner of Income Tax [2013 (5) TMI 388 - DELHI HIGH COURT] - merely having a reason to believe that income had escaped assessment is not sufficient for reopening the assessment beyond the four year period - It is essential that the escapement of income from assessment must be occasioned by the failure on the part of the assessee to, disclose material facts, fully and truly - it has not been specifically indicated as to which material fact or facts was/were not disclosed by the petitioner in the course of its original assessment u/s 143(3) of the Act - the AO had in mind the fact that the petitioner was carrying out its activities on “job work” basis when he observed that the petitioner had failed to disclose fully and truly all material facts - even on this presumption the AO was not correct. In the Transfer Pricing Report submitted by the assessee it had been clearly indicated that it had processed raw beads to the extent of 1,03,213 Kgs into finished imitation pearls in the financial year 2004-2005 which related to the AY 2005-2006 – thus, the entire activity and particularly the nature of manufacturing/production activity carried out by the petitioner “on job work basis” was clearly revealed before the AO in the original round as well as in the round of re-assessment - the statement of the AO in support of the notice dated 23.03.2012 that there had been failure on the part of the petitioner/assessee to fully and truly disclose the material facts, is completely belied by the records of the case – thus, the notice for reopening of assessment is set aside – Decided in favour of Assessee.
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