TMI Blog2017 (7) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... eopening of assessment - reasons to believe - Held that:- The assessee has recovered an amount of ₹ 78,82,705/- from SSI units and paid to WCL on account of GSTV and same has been shown under the head advance received from customers , hence, there was prima-facie case of reason to believe that income chargeable to tax has escaped assessment. Further reliance placed in the case of Raymond Woolen Mills Ltd. vs. ITO [1997 (12) TMI 12 - SUPREME Court] wherein it was observed that in determining whether commencement of proceedings u/s 147(a) was valid, what was to be seen was only the prima facie material; the sufficiency or correctness of the material was not a thing to be considered at that stage. Reopening of the assessment of the preceding year on the basis of information obtained in the subsequent year's proceedings regarding undervaluation of inventories resulting in under- statement of profits was held valid under section 147(a). In the case of Kalaynji Mabji & Cop. V. CIT (1975 (12) TMI 2 - SUPREME Court) it was held that reassessment can be initiated even if information may be obtained from record of original assessment. - Decided against revenue - I.T.A. No. 270/Ind/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Coal Companies. However, this levy of tax is unconstitutional and the matter is now pending before the Hon`ble Supreme Court. Therefore, the coal companies are keeping this money as advance in their books of accounts pending final judgement. The assessee is also not claiming this as expenditure in its Profit Loss Account as the matter is pending in Court. These facts have been disclosed by way of Notes on Accounts. The assessee submitted that if the transaction of receipt of advance from customer is treated as income then, the amount paid to the suppliers has also to be allowed as expenditure resulting in Nil income is this particular transaction. It was also submitted that the assessee was following this accounting treatment for past several years, however, no such addition was made in past and in subsequent assessment years. In view of these facts, the Ld. CIT (A) has deleted the addition. 4. Being aggrieved, the Revenue has filed this appeal before the Tribunal. The Ld. Sr. D.R. supported the order of the AO. 5. The learned Counsel for the assessee, submitted that no such addition was made in previous years nor in subsequent years though the assessee has been foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 i.e. before expiry of 4 years from the end of relevant assessment year. As per the mandate of section 147 if the AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the reassessment proceedings. Accordingly, we find that the AO has satisfied the required conditions laid down in the statute for the issuance of notice under section 148 and there is no infirmity in his order on this count. Notice under section 148 within four years can be issued even if there is no failure on the part of assessee to disclose all material truly and fully necessary for assessment. Thus notice u/s 148 is as per law. This view is also supported by decision of hb Bombay High Court in the case of Grind well Norton Ltd. v Jagdish Prasad Jangid ACIT and Others 267 ITR 673(Bom) wherein it was observed by the Hon ble High Court as under: If one reads explanation 2 to section 147 of the IT Act including the proviso therefore then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material on which his belief is based, is found to be so irrational as not to be worthy of being called a reason by any honest man, his conclusion that it constitutes a sufficient reason, cannot be overridden. If the Assessing Officer honestly comes to a conclusion that a mistake has been made, it matters nothing so far as his jurisdiction to initiate the proceedings under section 147 is concerned, that he may have come to an erroneous conclusion whether on law or on facts. The court will not in exercise of its extraordinary jurisdiction under the Constitution, examine the sufficiency of the reason which led the Assessing Officer to believe that the income had escaped assessment as held in the case of Shri Praful Chunilal Patel 236 ITR 832(Guj). 12. We further rely in the case of Dr. Amin s Pathology Laboratory 252 ITR 673 (Bom) the Hon`ble High Court observed that after the amendment, the only restriction put in the section is reason to believe . That reason has to be a reason of a prudent person. That reason should be fair and not necessarily due to failure of the assessee to disclose fully or partially some material facts relevant for assessment. However, where a peri ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
