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2022 (1) TMI 1162 - HC - Income TaxReopening of assessment u/s 147 - Notice after four years - reopening based on audit objections - HELD THAT:- Admittedly, this is a case where the notice under Section 148 of the Act has been issued after the expiry of 4 years from the end of the relevant assessment year and assessment u/s 143(3) of the Act has also been completed. Hence, proviso to Section 147 shall apply. Respondents have to show that there was failure on the part of petitioner to truly and fully disclose material facts relevant for the assessment. We have considered the reasons recorded for reopening the assessment and we have no doubt in concluding that respondents have failed in discharging its onus to show that petitioner has failed to disclose truly and fully all material facts. From the reasons itself as well as the documents annexed to the petition, it is quiet clear that there has been full disclosure by petitioner. Jurisdictional Assessment Officer (JAO) has raised 4 heads, under which he feels that income chargeable to tax has escaped assessment. We are in agreement with the explanation offered by petitioner. Moreover, this point has been raised because of audit objections. The Assessing Officer cannot be stated to be satisfied that he had reasons to believe that this item has escaped assessment. The Income Tax Officer must determine for himself what is the effect and consequence of the law mentioned in the audit note and whether in consequence of the law which has come to his notice he can reasonably believe that income had escaped assessment. The basis of his belief must be the law of which he has now become aware. The opinion rendered by the audit party in regard to the law cannot, for the purpose of such belief, add to or colour the significance of such law. The true evaluation of the law in its bearing on the assessment must be made directly and solely by the Income Tax Officer. ( See Indian and Eastern Newspaper Society V/s. Commissioner of Income Tax, New Delhi 1 [1979 (8) TMI 1 - SUPREME COURT] Further there is nothing under this head to indicate that there was failure on the part of petitioner to truly and fully disclose any fact. JAO has relied on the documents already filed before the Assessing Officer. Petitioner is therefore, directed to pay the amount of ₹ 30,54,398/- as mentioned in the revenue audit objections. Respondents are directed to raise the demand on petitioner for this amount and petitioner shall pay the amount within time prescribed in the demand. We are making it clear that as noted earlier, the entire 148 notice is quashed and set aside and we have held that assessment could not have been reopened at all by respondents. We have only included this portion in this order in view of the without prejudice offer made by Mr. Thakkar and that cannot be construed as an admission of any liability by petitioner. We also clarify that in view of our observation as above, no penalty proceedings can be initiated by respondents under this head.
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