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2024 (1) TMI 1080 - BOMBAY HIGH COURTReopening of assessment u/s 147 - notice was issued beyond period of four years - reasons to believe - reliance on third report of Shah Commission by which it was observed that there were illegal export particularly by means of under invoicing on the part of mining lessees and the exporters - HELD THAT:- AO claimed that assessee failed to disclose fully and truly all the material at the time of filing the returns that income derived was from the illegal mining activities. First of all such observations are incorrect as though the leases were declared as illegal from 22.11.2007, there is absolutely no finding or observation of the Apex Court that mining activities or business activities continued after 23.11.2007 till the same were stopped as per orders of the Supreme Court, were also illegal. Decision concerning leases was delivered in the year 2014. Till that time neither the assessee nor the Assessing Officer had knowledge that such leases were illegal after 22.11.2007. When assessee was not knowing, there was no occasion for him to make disclosure to that effect. In Mr. Teofilo Fernando Antonio Pinto Vs Union of India and anr. [2023 (9) TMI 625 - BOMBAY HIGH COURT] the Coordinate Bench of this Court while considering all the earlier decisions including decisions in case of Aroni Commercial Limited [2014 (2) TMI 659 - BOMBAY HIGH COURT] and CIT Vs Kelvinator India Limited 2010 (1) TMI 11 - Supreme Court] observed that twin conditions must be satisfied when the reopening is beyond the period of four years. Justification offered while rejecting objections of the petitioner cannot be regarded as valid defence of the impugned notice. Such justification/reason given for the first time at the time of disposal of the objections filed by the assessee objecting to reopen the assessment. Such reasons must exist and recorded at the time of issue of notice under Section 147/148 of the Act. In the present matters, notices issued for reopening of the assessment failed to satisfy twin conditions and thus the Assessing Officer could not have exercised jurisdiction for reopening of the assessments which were concluded way back. First of all placing reliance only on opinion in the third Shah Commission Report without independently assessing or recording reasons by the Assessing Officer is itself considered to be jurisdictional error on the part of such officer. Secondly when the notice was issued beyond period of four years, conditions regarding disclosure to be made fully and truly is also not established for the simple reason that the fact that such lease was illegal beyond 22.11.2007 was not to the knowledge of the assessee while submitting returns for the Year 2008-09 and also for the year 2011-12. The Apex Court in the year 2014 for the first time declared that the mining leases in Goa beyond 22.11.2007 were illegal. Thus prior to 2014 i.e. declaration by the Apex Court neither the assessee nor the Assessing Officer had knowledge that such leases were illegal, the question of making such declaration in the year 2008-09 or 2011-12 while submitting returns would not arise. Thus notice for reopening failed to satisfy twin conditions and therefore, both these notices under Section 147 of the Act need to be quashed and set aside. Decided in favour of assessee.
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