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2022 (5) TMI 59 - ALLAHABAD HIGH COURTReopening of assessment u/s 147 - Unexplained cash deposits - identity, creditworthiness and genuineness of the depositors were not verified during the course of assessment proceedings and the A.O. had made an addition of merely 25% of the deposits on presumptive basis without verification of the depositors and this had led to escapement of income as per the audit objection raised by the audit party - HELD THAT:- Examining the reasons for reopening of the assessment we find that the petitioner had not made full and true disclosure of all the material facts and on the basis of the audit objection, the A.O. has formed reason to believe that income had escaped assessment and this, in our opinion, was sufficient reason for initiating reassessment proceedings under Section 147 Change of opinion - As in the present case all material facts relating to identity, creditworthiness and genuineness of the investors relevant for the assessment on the issues under consideration were not produced during the assessment proceedings and, therefore, in absence of the entire relevant material, the A.O. could not have examined the issues and could not have formed appropriate opinion regarding the same during the original assessment proceedings. Therefore, it is not a case of change of opinion and challenge to the notice under Section 148 of the Act on the ground that it seeks to initiate reassessment on the ground of change of opinion, cannot be accepted. Issue of presumptive income is purely a question of law on which no reassessment could have been done on the basis of audit objection - It is not the petitioner’s case that its total turnover or gross receipts in the previous year did not exceed the amount of one crore rupees and, therefore, it does not fall within purview of “an eligible assessee engaged in an eligible business” and, therefore, Section 44 AD does not apply to the petitioner.Section 44 BBB of the Act contains Special provision for computing profits and gains of foreign companies engaged in the business of civil construction, etc., in certain turnkey power projects. Undisputedly, the petitioner is not a foreign company and, therefore, Section 44 BB would also not apply to it. Therefore, we are unable to accept the submission made on behalf of the petitioner that presumptive income is purely a question of law and has to be decided as per provisions contained in Section 44 AD and 44 BBB. As we have already held that the petitioner had failed to disclose fully and truly all material facts necessary for the assessment, the bar of four years would not apply. We find that there is no need for the paper containing approval being received physically before issuing the notice and the A.O. can proceed to issue a notice under Section 148 of the Act if the approving authority has granted his approval and the approval has been communicated to the A.O. in any manner – including by uploading the approval on the portal of the Department. The notice under Section 148 of the Act is not vitiated on the ground that the paper containing approval under Section 151 was received by the A.O. after issuing the notice. Thus we are of the considered opinion that the petitioner did not make a true and full disclosure of all the material facts and the A.O. had reason to believe that the petitioner’s income for the relevant year had escaped assessment.- Decided against assessee.
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