2021 (9) TMI 248 - HC - Income Tax

Reopening of assessment u/s 147 - notice after the expiry of period of four years - eligible reason to believe - non disclosure to deduction under Section 10A was allowed on capital gain - HELD THAT:- Reasons cannot be improved upon and/or supplemented much less substituted by affidavit and/or oral submissions. In the reasons to believe, except for a general statement that the escapement of income is by a reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, there is no mention anywhere that the assessee did not disclose that the deduction under Section 10A was allowed on capital gain during the course of assessment proceedings under Section 143(3) of the Act or that the subsequently it came to the notice of the assessing officer.

Infact in the reasons for reopening, it is expressly mentioned that the assessee has added short term capital gain. We would also add that in the assessment order dated 31st January 2017, the assessing officer has allowed the set of - Therefore, by no stretch of imagination it can be concluded that there was failure on the part of petitioner to disclose fully and truly the fact that sum has been deducted against the losses claimed under Section 10AA.

In the case at hand the assessing officer has not even indicated what was the material fact that was not disclosed truly or fully to him.

When the assessment is sought to be reopened after the expiry of period of four years from the end of the relevant year, the proviso to Section 147 stipulates a requirement that there must be a failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that year. This stipulation does not govern a notice for reopening within a period of four years. In the case at hand, as noted earlier, there is not even a whisper about what fact was not disclosed. In our view, therefore, the notice to reopen under Section 148 of the said Act itself was issued without jurisdiction. Consequently, the order passed also cannot be sustained. - Decided in favour of assessee.