TMI Blog2012 (9) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... ent that the income chargeable to tax has escaped assessment on account of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. The assessment framed consequent to the invalid notice issued under section 148 of the Act deserves to be annulled. Appeal decides in favour of assessee - ITA No.642/LKW/2011 - - - Dated:- 29-6-2012 - SHRI SUNIL KUMAR YADAV, AND SHRI MEHAR SIINGH, JJ. Appellant by: Shri. Praveen Kumar, CIT (DR) Respondent by: Shri. Abhinav Mehrotra, FCA O R D E R PER SUNIL KUMAR YADAV: This appeal is preferred by the Revenue against the order of the ld. CIT(A) on various grounds, which are as under:- 1. That the Ld. Commissioner of income Tax (Appeals)-II, Kanpur, has erred in law and on facts by annulling the order completed under section 147 whereas proceedings initiated under section 147 of the Income tax Act, 1961 is according to law and notice under section 148 was issued after approval of the Commissioner of Income Tax -II, Kanpur. Case was absolutely covered under the proviso to section 147 and was not barred by limitation at all. 2. That the ld. CIT(A) II, Kanpur, has erred in la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posed of the objections raised by the assessee for reopening of the assessment. Therefore, without disposing of the objections of the assessee, the assessment cannot be framed. 5. The ld. CIT(A) adjudicated the appeal on legal ground and held that the objections raised by the assessee had not been disposed of by the Assessing Officer. Therefore, his action is in violation of the judgment of the Hon'ble Apex Court in the case of GKN Driveshafts (India) Ltd. v. Income-tax Officer [2003] 259 ITR 19 (SC) and thus the reassessment order passed by the Assessing Officer is liable to be set aside. Besides, the ld. CIT(A) has also examined another legal aspect with regard to the reopening of assessment after four years from the end of the relevant assessment year in the light of the proviso to section 147 of the Act and after relying upon the judgments of various High Courts including the jurisdictional High court, he held that the Assessing Officer has not recorded anything in the reasons recorded for reopening of the assessment that the income chargeable to tax has escaped assessment on account of failure on the part of the assessee to disclose fully and truly all material facts relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Assessing Officer to the treatment given by the assessee to the forfeited share application money. Now the Assessing Officer wants to reopen the assessment after a period of four years without bringing anything on record that the income chargeable to tax has escaped assessment on account of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. In support of his contention that onus is upon the Assessing Officer to make out a case while recording reasons for reopening of assessment that the income chargeable to tax has escaped assessment on account of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment and if he fails to do so the entire assessment framed in consequent thereto deserves to be annulled, the ld. counsel for the assessee has placed reliance upon the judgments in the following cases:- 1. Thiagarajar Mills (P) Ltd. v. DCIT [2009] 026 DTR 50 (Mad). 2. Fenner (India) Ltd. v. DCIT, 107 Taxman 53 (Mad). 3. Hindustan Lever Ltd. v. ACIT Others, 268 ITR 332 (Mum). 4. Vishwanath Prasad Ashok Kumar Sarraf v. CIT Others, 327 ITR 190 (Alld). 5. Haryana A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without recording anything in the reasons recorded for reopening of the assessment that the income chargeable to tax has escaped assessment on account of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. The proviso to section 147 of the Act clearly says that no action shall be taken under section 147 of the Act after expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason or failure on the part of the assessee to make a return under section 139 of the Act or in response to a notice issued under section 142 or 148 of the Act or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. Therefore, onus is upon the Assessing Officer to bring something on record to establish that the income chargeable to tax has escaped assessment on account of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment, for that assessment year. 11. Undisputedly in the instant case the assessee has filed return of income along with balance sheet s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad with section 147 of the Act for the assessment years 1996-97 and 1997-98 were barred.'' 13. Since it has been held by various High Courts including the jurisdictional High Court that the assessment reopened after four years from the end of the relevant assessment year without establishing that the income chargeable to tax has escaped assessment on account of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment, deserves to be annulled. 14. We have also examined the arguments of the Revenue with regard to the applicability of provisions of section 149(1)(b) of the Act and we are of the view that this provision cannot be applied for reopening of the assessment as it relates to the time limit for issuance of notice under section 148 of the Act. This argument was examined by this Bench of the Tribunal in the case of M/s Model Exims, Kanpur v. DCIT, Kanpur in ITA Nos. 265 to 267/LKW/2010 for assessment year 2000-01 to 2002-03 (in which one of the Members was a party to it) and the Tribunal has categorically held that this argument of the Revenue cannot be accepted. The relevant observations of the Tribunal are extracted hereu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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