TMI Blog2017 (7) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, the figure adopted by the Assessing Officer is one that is inclusive of the interest component of the unsecured loans. Assessing Officer arrived at a wrong conclusion that there had been an escapement of income in the assessment. If the correct figures had been taken, then there would have been no escapement of income. Thus the proceedings initiated against the petitioner under Section 148, on a wrong premise, cannot be legally sustained. It is also relevant to note that, there is nothing to suggest that there was any non-disclosure, by the petitioner assessee, of the full and true facts that were necessary for the purposes of the assessment, so as to justify the invocation of the 1st Proviso to Section 147, while issuing the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnishing the clarifications sought for in Ext.P3 notice. Thereafter, the 2nd respondent issued Ext.P4 pre-assessment notice dated 30.11.2009 in connection with the completion of the assessment for the year 2008-2009. After considering the objections of the petitioner to the pre-assessment notice, and after hearing the petitioner, Ext.P5 assessment order dated 31.12.2009 was passed by the 2nd respondent. Thereafter, by Ext.P6 notice dated 31.03.2015, issued under Section 148 of the Income Tax Act, the 1st respondent indicated that he had reason to believe that income chargeable to tax for the assessment year in question had escaped assessment for the purposes of Section 147 of the Income Tax Act. The petitioner, on receipt of Ext.P6 notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g a reopening of the assessment for the assessment year 2008-2009. 2. The petitioner would point out that, Ext.P6 notice was issued by invoking the provisions of the 1st Proviso to Section 147 of the Income Tax Act, which alone enables the Assessing Officer to proceed with a reassessment proceedings after the expiry of four years from the end of the relevant assessment year. It is the case of the petitioner that the assessment year in question is 2008- 2009 and the notice dated 31.03.2016 cannot be legally sustained unless the Assessing Officer establishes that the escapement of assessment for the assessment year in question was on account of a failure on the part of the assessee, inter alia, to disclose fully and truly all material fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. It is stated that, insofar as the very basis for the issuance of notice under Section 148 is flawed, the proceedings itself have to be held illegal. It is also pointed out that, since there was no non-disclosure by the assessee of the necessary facts and accounts for the purposes of assessment, as already enumerated above, the re-assessment, even if proposed at this stage, could only be viewed as a change of opinion by the Assessing Officer, since the Assessing Officer would be taking a different view, based on material that was already available before him at the time of the initial assessment. 3. A counter affidavit has been filed on behalf of the respondents wherein the proceedings of the Assessing Officer are sought to be justifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aped assessment and which came to his notice subsequently. The normal period which is granted under Section 147 for the purposes of reassessment is four years from the end of the relevant assessment year. During the said period of four years, the Assessing Officer would be well within his rights to embark upon an exercise of reassessment subject only to the limitation that the re-assessement cannot be based merely on a change of opinion. In those cases where the period of four years from the end of the relevant assessment year has already expired, the proviso to Section 147 enables an Assessing Officer to still proceed with the reassessment, subject to the condition that he must establish that the income chargeable to tax has escaped assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluding Exts.P13 document produced by the petitioner, which is an extract from the balance sheet of the company that was made available before the Assessing Officer at the time of initial assessment, clearly reveal that the figure mentioned above was wrongly adopted by the Assessing Officer as representing the total unsecured loans from the share holders. As a matter of fact, the figure adopted by the Assessing Officer is one that is inclusive of the interest component of the unsecured loans. It is clear, therefore, that the Assessing Officer arrived at a wrong conclusion that there had been an escapement of income in the assessment. If the correct figures had been taken, then there would have been no escapement of income. Under such circu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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