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2021 (2) TMI 99 - AT - Income TaxReopening of assessment u/s 147 - case reopened beyond 4 years after completion of original assessment U/s 143(3) - live link between the reason recorded and the formation of the belief - HELD THAT:- It is established law that to reopen an assessment beyond a period of 4 years, where the original assessment has been completed u/s 143 (3) the reasons recorded has to show the escapement of income, is due to failure on part of the assessee to disclose fully and truly all material facts necessary for the assessment for the year under consideration. There must be a live link between the reason recorded and the formation of the belief that income chargeable to tax has escaped assessment because of the failure on the part of the assessee. Both the conditions must coexist in order to confer jurisdiction on the assessing officer. In the present case, the reasons recorded clearly reveals that all facts were available before the Ld.AO, when he completed the original assessment proceedings under section 143(3) of the Act, and no new materials were available on record for reopening the present assessment after expiry of 4 years. Initiation of reassessment proceedings beyond 4 years will have to be held invalid for the reason that the reasons recorded by the Ld.AO, do not spell out that the escapement of income was due to assessee not fully and truly disclosing all material facts necessary for completion of assessment for relevant assessment years. Also seen that the evidences were raised before the Ld.AO and the course of original assessment proceedings under section 143(3) of the Act and the same was not chosen to draw any conclusion. Therefore in the given circumstances we are of the view that Explanation 1 cannot be resorted by the revenue. Therefore, in the absence of the statutory requirement of income chargeable to tax have escaped assessment due to failure on part of assessee to disclose fully and truly all material facts, the notice of reopening of assessment stands invalid. - Decided in favour of assessee.
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