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2021 (9) TMI 249 - HC - Income TaxReopening of assessment u/s 147 - reopening proceedings beyond the period of four years - eligibility of reasons to believe - difference arising on reporting of long term foreign currency monetary items effect of Exchange loss on ECB loans - whether the assessee disclosed the material facts fully and truly necessary for the assessment? - HELD THAT:- The petitioner / assessee is a company, adopting mercantile method of accounting. Thus, the findings in these aspects are of paramount importance for the purpose of making the assessment in a clear manner - assessment order did not speak anything regarding the actual payments and other details elaborately, then it paves way for reopening of assessment. In the present case, the first reason would show that there is a shortfall in assessment of income under Section 115JB by 390.96 lakhs. Thus, the Assessing Officer has 'reason to believe' that there was an under-assessment. When such an under assessment is identified and falling under the deemed cases, where income chargeable to tax has escaped assessment, then the conditions stipulated in the proviso clause that disclosure of material facts fully and truly became absent. Assessing Officer has 'reason to believe' for reopening of assessment. It is sufficient if any one of the conditions stipulated in Proviso clause to Section 147 is satisfied for reopening of assessment. Second reason furnished for reopening, wherein the respondent considered as per schedule 18 of the profit and loss account, expenses have been debited - With reference to the said expenses, it is stated that as per clause I & J of Explanation of section 115JB both the above items are to be added back to the book profits. Thus, there is escapement of ₹ 59,72,380/- to be taxed U/s.115JB. The tax effect thereon is ₹ 8.96 lakhs. Third reason stated is that there is revaluation of assets in the depreciation schedule which goes to increase the claims for depreciation under normal provisions by 25% i.e., ₹ 945.27 lakhs (₹ 4699.80-₹ 918.73=₹ 3781.1 25 %=₹ 945.27). This should have been added back in the normal computation of income as per provisions section 43A of the IT Act. There tax effect thereon is ₹ 321.39 lakhs. This Court is of the considered opinion that High Court is not an expert body, so as to go into the details of the accounting system and find out the arithmetic errors, if any. What is to be considered in a writ petition mainly with reference to the cases of reopening of assessment is the 'reason to believe' for reopening of assessment. The reasons furnished should have live link with the materials and the conditions stipulated are to be complied with. If these aspects are satisfied, such an objective satisfaction would be sufficient for the purpose of allowing the assessing authority to proceed with the reassessment proceedings and conclude the same by providing opportunity to the assessee. The sufficiency of the reasons need not be gone into by the High Court in a writ proceedings. Thus, if there is a prima facie case for the purpose of reopening of assessment, and the objective satisfaction is sufficient for the purpose of reopening of assessment. This Court could able to arrive a conclusion that the case of the petitioner is falling under Sub-Clause (c) to Explanation 2 of Section 147 of the Act as it is a deemed case, where income chargeable to tax has escaped assessment and if such deemed cases are traced out, then necessarily the Assessing authority has to draw an inference on certain factual aspects for forming such an opinion and such 'reason to believe' would be certainly falling under the condition that the assessee has not disclosed fully and truly material facts necessary for assessment. Thus, the Assessing Officer had 'reason to believe' that income chargeable to tax has escaped assessment. However, whether it is escaped assessment or not is the subjective adjudication, which is to be done by following the procedures as contemplated under the Act. WP dismissed.
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