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2016 (10) TMI 351 - AT - Income TaxReopening of assessment - reasons to believe - Held that:- We are of the view that initiation of reassessment proceedings will have to be held as invalid for the reason that reasons recorded by the AO do not spell out that escapement of income was due to the assessee not fully and truly disclosing all material facts necessary for completion of assessment for the relevant assessment year. Admittedly the proviso to Sec.147 of the Act was applicable in the present case. The AO in the reasons recorded has not spelt out as to how there was a failure on the part of the assessee to fully and truly disclose all material facts. In fact there is no such allegation at all in the reasons recorded by the AO. When the original proceedings were concluded all facts with regard to increase in freight charges vis-ŕ-vis purchases were much available before the AO. In the present case, the reasons recorded by the AO does not refer to any new material that came into his possession based on which he entertained belief that income of assessee chargeable to tax has escaped assessment. The facts with regard to the freight charges and quantum of purchases for the previous year and the earlier previous year were available with the AO when the concluded the first assessment proceedings. There is no other conclusion possible except the conclusion that the reopening of assessment is not based on tangible material which came into possession of the AO after conclusion of the original assessment proceedings. On the facts and circumstances of the present case, we are of the view that initiation of reassessment proceedings has been merely on the basis of change of opinion and in view of the law laid down by the Hon’ble Supreme Court in the case of Kelvinator of India Ltd. (2010 (1) TMI 11 - SUPREME COURT OF INDIA ), initiation of reassessment proceedings has to be held as not proper. Before us, the ld. DR had placed strong reliance on the order of the CIT(Appeals) on the issue of validity of initiation of reassessment proceedings. - Decided in favour of assessee.
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