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2010 (8) TMI 449 - HC - Income TaxReopening - Income escaping assessment - Capital or revenue expenditure - Maintainability of writ petition - Petition was pending for 10 years - if such defences are rejected and an adverse order is passed, surely, the same will not be in the interest of justice. The failure on the part of the 2nd respondent to record the reasons in the impugned proceedings to the effect that he has reasons to believe that the escapement was due to failure of the petitioner to make true and full disclosure of the income itself is sufficient to quash the proceedings in respect of the assessment years 1991-92 and 1992-93, in view of the judgements which I have cited earlier. - it is not open for the respondents to raise a contention before this Court for the first time that there was such a failure on the part of the assessee. - notices in respect of the assessment years 1991-92 and 1992-93 are liable to be quashed. Notice in respect of the assessment year 1993-94 - issued within 4 years - This case falls within the sweep of the main provision of Section 147 and not within the proviso to Section 147 of the Act. Hence, there is no need to satisfy the second legal requirement - it is not necessary for the assessing officer to record as to whether the escapement of chargeable income from tax assessment was due to the failure of the assessee to make true and full disclosure of the income. It would be suffice, if the assessing officer had recorded the reasons for his belief that there had been escapement of taxable income from assessment. Change of opinion - It is only out of the available materials, the 2nd respondent has found the reasons to believe that there has been escapement of chargeable income from assessment since, instead of treating the expenditure in question as capital expenditure, the then assessing officer has treated the same as revenue expenditure. - would not amount to either "change of opinion" or "reviewing the earlier assessment order. Capital or revenue expenditure - it is for the 1st respondent to decide the question as to whether the expenditure on replacement of machinery and conversion of materials or any part of the same , would fall within the ambit of capital expenditure or revenue expenditure so as to make reassessment accordingly, if it is so warranted.
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