Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2014 (6) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (6) TMI 444 - HC - Income TaxValidity of notice u/s 148 of the Act – Change of opinion – Exemption u/s 11 of the Act - Held that:- The reasons for initiating re-assessment proceedings do in fact state that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment - merely making the bald assertion was not enough –Relying upon Hindustan Lever Ltd. v/s R.B. Wadkar, Assistant Commissioner of Income Tax and others [2004 (2) TMI 41 - BOMBAY High Court ] - there are no details given by the AO as to which fact or material was not disclosed by the Petitioner that led to it's income escaping assessment - There is merely a bald assertion in the reasons that there was a failure to disclose fully and truly all material facts without giving any details – the notice is bad in law and on this ground alone the assessee is entitled to succeed. The AO had allowed the provision for doubtful accounts as an application of income for the A.Y. 2005- 2006 - the provision for doubtful accounts consisted of three items viz. (i) general charges which could not be recovered from various members due to various reasons; (ii) amounts relating to valan account and (iii) general charges and valan account balance of members prior to 1996-97 which could not be recovered - The statement has not been controverted while disposing of the objections when the AO passed his order - the initiation of reassessment proceedings is unsustainable. The assessee had fully and truly disclosed all material facts regarding the reduction of ₹ 25,44,889/- from the income from investments and deposits as set out in Schedule K to the Income and Expenditure Account read with Statement enclosed with the computation of income - the initiation of re-assessment proceedings on this ground also was based merely on a “change of opinion”. The income of the assessee is exempted u/s 11 of the Act – assessee is not carrying on any business - section 40(a)(ia) has no application and the notice issued on the basis was wholly misconceived - it was only out of abundant caution that the assessee used to get its books of accounts audited u/s 44AB of the Act and that this practice was being followed since the last 15 years – Decided in favour of Assessee.
|