TMI Blog2004 (9) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act and consequent order under section 143(3) read with section 147 is not valid in a case where the assessee has wilfully tried to create a bogus expenditure by way of interest payment and where the assessment was reopened after due approval from the CIT, Central II, Mumbai." 2. Briefly stated, the facts of the case are that the original return of income was filed on 30-10-1996 declaring loss of Rs. 10,56,720, which was accepted by the Assessing Officer in the original assessment order passed by him under section 143(3) of the Income-tax Act on 26-2-1999. The Assessing Officer subsequently issued a notice under section 147/148 of the Income-tax Act on 19-4-2002 in pursuance of which he completed the impugned assessment under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. CIT(A) has also recorded a finding that the assessee had disclosed all primary facts necessary for the assessment and therefore it was for the Assessing Officer to make use of those primary facts while making the assessment. 3. Aggrieved by the order of the CIT(A), the Department is in appeal before this Tribunal. In support of appeal, the ld. Departmental Representative took us through the various findings recorded in the assessment order and submitted that the impugned notice was issued after fully meeting the requirements of the proviso to section 147. He, in particular, invited our attention to Explanation 1 to section 147 of the Income-tax Act which provides that production before the Assessing Officer of account books or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing. It is true that an assessment originally completed under section 143(3) of the Income-tax Act cannot be reopened after the expiry of four years unless there is failure on the part of the assessee to, inter alia, disclose fully and truly all material facts necessary for his assessment for that assessment year. It is equally true that Explanation 1 to section 147 provides in clear terms that production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the proviso to section 147. 6. It may not be out of place to mention here a decision of the Hon ble Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion that had been allowed on the entirety of the assets in the original order of the assessment. Notice issued by the Assessing Officer under section 147/148 was challenged on the ground that there was no failure on the part of the assessee to disclose fully, and truly all material facts necessary for his assessment. The Hon ble Supreme Court has held that the issue whether there was such non-disclosure of primary facts as had escaped assessment of income was essentially a question of fact. The Hon ble Court further held that it was well-settled that the obligation of the assessee was to disclose only primary facts and not inferential facts. If some material for the assessment lay embedded in the evidence, which the revenue could have unco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment in order to find out as to whether the assessee has made full and true disclosure of all of them before the Assessing Officer. 9. The aforesaid judgments are authorities for the proposition that it is the duty of the assessee to disclose fully and truly all material and relevant facts necessary for his assessment and bring them to the notice of the Assessing Officer. This is what is also envisaged by Explanation 1 to section 147 of the Income-tax Act. Therefore, in order to decide whether the assessee has disclosed fully and truly all material facts necessary for his assessment for the relevant assessment year, it is necessary to identify as to what facts are relevant or material for deciding the issue and also as to whether ..... X X X X Extracts X X X X X X X X Extracts X X X X
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