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TMI Blog2017 (8) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee : Ground No.1: 1. That the Ld. CIT (Appeals) erred on facts and in law in not holding that the reassessment order dated 1 6.12.2009, passed under section 147/143(3) of the Act was beyond jurisdiction, bad in law and void abinitio. 1.1 That the Ld. CIT(Appeals) erred on facts and in law in not appreciating that the reassessment proceedings were barred by limitation in terms of proviso to section 147 of the Act, as there is no allegation that there was any kind of failure on the part of the assessee to make full and true disclosure of all material facts necessary for assessment for the assessment year under consideration. 1.2 That the ld. CIT(Appeals) erred on facts and in law in nor appreciating that the aforesaid reasses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before the ITAT. However, on perusal of the original assessment record, the AO noticed some discrepancies and recorded following reasons for re-opening the assessment and issued notice u/s. 148 on 26.03.2009 : "1. On perusal of records it reveals that the capital expenditure amounting to Rs. 97,83,658/- had been debited to P&L A/c, which resulted under assessment of income to that amount and short levy of tax by Rs. 48,98,576/-. 2. An amount of Rs. 13,42,55,743/- (7,45,86,060 +5,96,69,683), which was material in transit not take in closing stock of the P & L A/c, resulted in under assessment of income and involving short levy of tax by Rs. 6,72,20,843/-. 3. Prior period expenses of Rs. 77,57,175/- were debited to P & L accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly disclosed all material facts, which were necessary for completing the assessment. During the assessment proceedings, the issue involved in ground No. 1 & 3 was already examined by the AO by issuing questionnaire which was duly replied and in respect of issue in ground No. 2, complete facts were disclosed in audited financial statements at schedule 6 under the head 'current assets - loans and advances, inventorised in material in transit - raw materials of Rs. 74586060 and finished goods of Rs. 5,96,69,683/-, which is available at paper book page No. 5. He has also referred the detailed submissions made before the authorities below for challenging the validity of reopening as well as on merits. He has relied on following case laws : (i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be tested on the anvil of proviso to section 147 of the Act which stipulates as under: "Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the 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 of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year" 8. In the instant case, on perusal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quashed. Besides, we concur with the submissions of the Ld. AR that no new facts have come to the knowledge of the AO justifying assumption of jurisdiction after four years. The orders of the authorities below also nowhere reveal as to what new facts or material came to their notice which led them to make re-assessment in the instant case. A bare reading of first proviso to section 147, shows that the law merely casts a duty on the assessee to disclose fully and truly all material facts necessary for his assessment which has been done in the instant case. The duty of the assessee does not extend beyond the disclosure of all material facts necessary for his assessment. It is thereafter the duty of AO to properly apply its mind on the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record. 16. In the present appeal, Explanation (1) to Section 147 also does not help or assist the Revenue. All material facts were available on record and no material facts had to be inferred or discovered by the assessing officer. The assessing officer in spite of being aware of the facts, failed to apply or, at best failed to consider whether Section 2(22)(e) of the Act was attracted. Failure to apply law or a section to admitted facts on record is not covered by Explanation (1). Explanation (1) applies when the assessing officer on the basis of account books or other evidence fails to discover or infer material facts which with due diligence could have been discovered. Explanation (1) deals with failure of the assessing officer to d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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