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2022 (4) TMI 639 - HC - Income TaxValidity of Reopening of assessment u/s 147 - eligibility of reasons to believe - Notice issued after expiry of four years from the end of relevant assessment year - HELD THAT:- We have to note that reasons as quoted above clearly provides that information regarding first item, i.e., WIP has been obtained from the balance-sheet of the Company and 2nd item, ground rent, has been obtained from Profit and Loss account and computation of income of Petitioner. Therefore, information has been obtained from the primary facts and documents filed by Petitioner. This not a case where Petitioner can be accused as having merely produced its books of accounts or other evidence during the course of assessment proceedings on the basis of which material evidence could not have been deduced by the Assessing Officer with the exercise of due diligence. Section 139 of the Act provides for mandatory obligations to furnish with its return of income the report of audit. Petitioner fulfilled its obligations. Petitioner had filed return of income alongwith audited Profit and Loss Account and balance-sheet as required under Section 139 of the Act. Balance-sheet being a part of the return of income under Section 139 of the Act, Petitioner cannot be stated to have not disclosed material facts. Petitioner having filed balance-sheet alongwith computation of income with its annual returns, there was nothing more to disclose and a person cannot be said to have omitted to disclose or failed to disclose when he had no knowledge. This not a case where Petitioner can be accused as having merely produced its books of accounts or other evidence during the course of assessment proceedings on the basis of which material evidence could not have been deduced by the Assessing Officer with the exercise of due diligence. Section 139 of the Act provides for mandatory obligations to furnish with its return of income the report of audit. Petitioner fulfilled its obligations. Petitioner had filed return of income alongwith audited Profit and Loss Account and balance-sheet as required under Section 139 of the Act. Balance-sheet being a part of the return of income under Section 139 of the Act, Petitioner cannot be stated to have not disclosed material facts. Petitioner having filed balance-sheet alongwith computation of income with its annual returns, there was nothing more to disclose and a person cannot be said to have omitted to disclose or failed to disclose when he had no knowledge. This is subject to the rider that there must be cogent and clear indication in the reasons supplied, that in fact there was failure on the part of the assessee to disclose fully and truly all the material facts necessary for its assessment. If the factum of failure to disclose can be culled from the reasons in support of the notice seeking to reopen assessment, that will certainly not be fatal to the assumption of jurisdiction under sections 147 and 148 of the Act. The Court in CROMPTON GREAVES LTD. [2014 (12) TMI 936 - BOMBAY HIGH COURT] held “However, if from the reasons, no case of failure to disclose is made out, then certainly the assumption of jurisdiction under sections 147 and 148 of the Act would be ultra vires, being in excess of the jurisdictional restraints imposed by the first proviso to Section 147 of the Act”. Having considered the reasons we are satisfied that even the reasons does not indicate there was failure to disclose truly and fully material facts. In fact there was nothing to indicate non-disclosure. Reasons itself rely on the balance-sheet and computation of income filed.- Decided in favour of assessee.
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