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TMI Blog2017 (4) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... ling it. For the impugned assessment year, assessment u/s. 143(3) was completed on 09-11-2006 on a total income of Rs. 6,32,810/- as against income returned of Rs. 1,89,010/-. While making the assessment, Assessing Officer (AO) made an addition of Rs. 5,08,490/- by disallowing 25% of certain expenditure claimed. It seems on 05-08-2010, a notice u/s. 154 was issued proposing to add an amount of Rs. 11,39,655/- u/s. 40(a)(ia) on the ground that tax was not deducted on payments towards quartz stone excavation. But the notice was served on 12-02-2012, which was more than four years and assessee objected to that. Subsequently, AO issued a notice u/s. 148 on 30-03-2012 which was served on 31-03-2012. The reasons recorded as communicated to assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pement of income to tax was by reason of assessee's failure to disclose material facts necessary for computation of income and that therefore the assessment completed U/s.143(3) more than 4 years after the end of the assessment year cannot be reopened under proviso to sec. 147 of the I.T. Act. 3. Learned CIT(A) failed to see that the A.O sought to justify on the ground of non-disclosure in Form 3CD u/s. 44AB of the I.T. Act even though the reasons recorded u/s. 148(2) did not make that allegation. 4. The above reason is inconsistent with the notice u/s. 154 of the I.T. Act to rectify the assessment order in respect of the same amounts but only dropped on account of non-service of notice u/s.154 and not on any jurisdictional grounds. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The reasoning given by the AO in the assessment order that the column in 3CD form has not been filled is a subsequent excuse whereas originally, the recorded reasons indicate that Schedule-2 of assessee furnished before the AO was the basis for reopening. Further, it was submitted that in case of any TDS failure, proceedings u/s. 201(1) should have been initiated rather than disallowing u/s. 40(a)(ia). It was further submitted that the provisions of Section 40(a)(ia) came on statute by the ascent of the President on 10th September, 2004. Therefore, they are not applicable for AY. 2005-06, as held by the Hon'ble Calcutta High Court in the case of PIU Ghosh Vs. DCIT and others [386 ITR 322] (Cal). 5. Ld.DR however, submitted the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s excavation expenditure in the original scrutiny proceedings. In view of that, I am of the opinion that reopening after the end of four years in case of scrutiny u/s. 143(3) was completed is hit by the proviso to Section 147 and accordingly, bad in law. Hon'ble Jurisdictional High Court in the case of Kohinoor Hatcheries Pvt. Ltd., Vs. DCIT (WP No. 2148 of 2015) dt. 16th August, 2016 [(2016) 96 CCH 0140 APHC] held as under: "12. Coming to the merits of the case, the reopening of assessment had happened in this case, admittedly after 4 years. This is also a case where an assessment under sub-section (3) of Section 143 had already been made on 31-12-2010 for the relevant Assessment Year. Therefore, by virtue of the proviso to Section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make it obligatory on the part of the assessee (1) to make a full disclosure; 2) to make a true disclosure and 3) to ensure that such true and full disclosure is of material facts necessary for the assessment. A clear signal is sent to the assessee by Explanation 1 that the mere production of books of accounts or other evidence before the Assessing Officer will not be treated as a disclosure. In other words, a distinction is sought to be made between production of materials and disclosure of materials. 16. Such a distinction between a mere production of materials and a true and full disclosure of materials is sought to be maintained on account of the fact that under the Act, an Assessing Officer has now power of review. This is why the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue would not suffer in such cases. But the answer is not too difficult to find out. It is only to safeguard the interests of the Revenue in cases of this nature that an express power is conferred upon the Commissioners under Section 263 of the Act. 20. Therefore, what is important in cases of this nature where a challenge is made to the reopening of assessment, is to see (1) whether there was a true and full disclosure of all materials or (2) whether there was a mere production of materials. 21. As pointed out by the Constitution Bench of the Supreme Court in Calcutta Discount Co. Ltd., v. Income Tax Officer and another , the duty of the assessee stops with a true and full disclosure and does not extend to assisting the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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