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2020 (12) TMI 565 - HC - Income TaxValidity of reopening of assessment - original proceedings for assessment were by way of an intimation under Section 143(1)(a)/143(1) - HELD THAT:- Intimation under Section 143(1) dated 15.12.2016 was issued after the return was electronically processed by the Central Processing Centre (CPC), Bangalore. No notice under Section 143(2) was issued. This was followed by a notice under Section 148 dated 12.02.2018 issued on the basis that there was escapement of income. As required statutorily, the petitioner filed a return of income on 01.03.2018 and sought the reasons on the basis of which the proceedings for re-assessment had been initiated. The return of income filed by Indian Syntans was accompanied by financials that contained a note explaining the lease transaction and a perusal of the reasons for re-assessment make it clear that the reasons are based entirely upon the documentation accompanying the return and no material extraneous to that already on record or anew, has been discovered by the respondent indicating income that had escaped taxation. This is the position both as regards the lease income as well as the claim of administrative expenses. In such circumstances, the escapement of income, if any, cannot be attributed to the assessee. A full and true disclosure has been made in so far as all material germane to the computation of income forms part of the return of income. AY 2015-16 - The mere fact that the respondent had not originally taken the return up for scrutiny by issuing notice under Section 143(2) would not debar the Department from initiating proceedings for re-assessment. The impugned proceedings for re-assessment are, according to the reasons for re-assessment as well as the counter filed by the respondent, based upon certain discrepancies noted in the figure of bad and doubtful debts in the statement of computation of income and the financials. Thus, find no legal infirmity in the initiation of proceedings for re-assessment in this case. Re-assessment, be it within or beyond four years, has to be based on tangible material dehors that which is available on record, that has come to the notice of the AO. Once an intimation has been issued, be it manually by the AO or electronically by CPC, the mechanism for selection of returns for assessment must be robust, ensuring that issues requiring scrutiny are picked up promptly and addressed in time. If the Department lets sail this ship, recourse to proceedings for re-assessment is available only if the department comes into possession of material apart from that already available as part of its records or if the primary particulars reveal discrepancies that are not explained or resolved by the accompanying documentation. This is subject, therefore, to the assessee having placed on record all material necessary for the appreciation of the issues arising for assessment including financials and annexures along with its return of income, at the first instance. The impugned proceedings for re-assessment, in this case are held to be valid and will continue by issue of notice. After hearing the petitioner either over video conference or physically as per mutual convenience of the parties, let an order of re-assessment be passed in accordance with law, within a period of eight (8) weeks from date of uploading of this order
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