2022 (8) TMI 1314 - AT - Income Tax

Reopening of assessment - reasons to believe - scope of fully and truly disclosing all the relevant particulars - HELD THAT - Reopening reason nowhere indicated that the assessee s taxable income had escaped assessment on account of it s failure in fully and truly disclosing all the relevant particulars. Faced with this situation we quote section 147 (1st proviso) and hon ble jurisdictional high court s landmark decision in Hindustan Lever Ltd. vs. R. B. Wadkar 2004 (2) TMI 41 - BOMBAY HIGH COURT to quash the impugned reopening for this precise reason alone. Decided in favour of assessee.

Summary

Issues Involved:
Validity of the impugned reopening under Section 147 of the Income Tax Act, 1961.

Analysis:
The appeal for AY 2009-10 was filed against the CIT(A) 1, Kolhapur's order involving proceedings under Section 143(3) r.w.s. 147 of the Income Tax Act, 1961. The delay of 2 days in filing the appeal was condoned by the Tribunal. The main issue raised by the assessee was the validity of the impugned reopening. It was noted that the Assessing Officer had issued a notice under section 148 after the regular assessment. The Tribunal found that the reopening reason did not indicate that the taxable income had escaped assessment due to the assessee's failure to fully and truly disclose all relevant particulars. Citing section 147 (1st proviso) and the Hindustan Lever Ltd. vs. R. B. Wadkar case, the Tribunal quashed the reopening solely on this ground, ruling in favor of the assessee.

The Tribunal held that since the impugned reopening was quashed, all other arguments on merits became irrelevant. Consequently, the Tribunal allowed the assessee's appeal against the CIT(A) order. The order was pronounced in the open court on 25th August 2022 by the Judicial Member, S.S. Godara.

This detailed analysis highlights the Tribunal's decision to quash the reopening based on the failure to establish that the taxable income had escaped assessment due to inadequate disclosure by the assessee. The judgment emphasizes the importance of complying with the provisions of the Income Tax Act and relevant legal precedents in determining the validity of reopening assessments.