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2023 (12) TMI 407 - AT - Income TaxMaintainability of the reassessment proceedings - deduction u/s. 35(2AB) - non furnishing Form 3CL quantifying eligible expenditure u/s. 35(2AB) regarded in law as non-disclosure within the meaning of proviso to section 147 r/w Explanation 1 thereto - Notice issued beyond 4 years - HELD THAT:- The procedure of communication of Form 3CL direct by the prescribed authority to the Revenue giving rise to the presumption that the same would stand communicated to the AO, is, as afore-noted, not supported by the rule. The presumption, nevertheless, fails on facts, i.e., on the assessee receiving Form 3CL approving a reduced deduction u/s. 35(2AB) (w.r.t. that claimed) on which the assessee is not questioned during assessment. And which ought to have impelled the assessee to, in discharge of it’s primary obligation, furnishing Form 3CL, either revise it’s claim downward, or state it’s reasons for persisting with it’s claim, or both, i.e., in case of partial scaling down of it’s claim. Why, in a given case, the AO may himself question the assessee on it’s higher claim, implying knowledge of Form 3CL with the AO, validating the presumption afore-said, which would entitle the assessee to proceed accordingly. The assessee’s disclosure obligation undergoes a qualitative change in light of this fact. Again, could the assessee’s conduct be faulted where Form 3CL reports deduction in the same sum as claimed by the assessee? We say so to emphasizes the need to calibrate the conduct toward true and full disclosure with the facts & circumstances of the case, which cannot be held as a constant or absolute. Tribunal in assessee’s own case for AY 2012-13 [2017 (8) TMI 841 - ITAT COCHIN] being in fact undisputed, particularly considering that the claim for deduction made was much higher than that on the basis of expenditure approved thus by the prescribed authority. It is this variance, and not F/3CLper se, that is the undisclosed primary, material fact. The plea of presumption of the said Form being in the knowledge of the AOis not supported by the rule, i.e., not available legally and, besides, falls flat on facts, i.e.,in view of a complete absence of any enquiry or reference thereto in the original assessment and, therefore, a false plea by the assessee, who is obliged by law to disclose, fully and truly, all material facts necessary for assessment to the AO. Why, the knowledge of Form 3CL being at a variance with the assessee’s claim with the AO, i.e., at the time of original assessment, may, where so, eschew reassessment proceedings even for AY 2011-12, rendering the same as a change of opinion. The two aspects are inter-related, with there being decisions, as in Ganga Saran & Sons P. Ltd. v. ITO [1981 (4) TMI 5 - SUPREME COURT] wherein the Hon'ble Apex Court found no failure on the part of the assessee to disclose material facts, holding, on that basis, the AO could not have a reason to believe that any part of income had escaped assessment. The matter is to be examined from the stand-point of the obligation on the assessee to disclose all material facts necessary for assessment, fully and truly, i.e. as mandated by law, and which, a positive requirement, we have, giving our reasons, found as not discharged. We are supported in our view by the decisions cited here-in-above, as well as that relied upon by the parties before us. The matter, as for AY 2011-12, shall travel to the file of the ld. CIT(A) for adjudicating the quantum adjustments in assessment under appeal before him after hearing the parties per a speaking order.
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