TMI Blog2005 (8) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to be quashed and set aside - - - - - Dated:- 16-8-2005 - Judge(s) : V. C. DAGA., J. P. DEVADHAR. JUDGMENT The judgment of the court was delivered by V.C. Daga J.- This petition is directed against the validity of the notice dated November 4, 1991 issued by respondent No. 1 under section 148 of the Income-tax Act, 1961 ("the Act" for short). Factual matrix The factual matrix reveals that the petitioner had filed its return for the assessment year 1985-86 on June 28, 1985 of which the relevant previous year ended on December 31, 1984. During the course of the assessment proceedings, respondent No. 1 was noticed by the Income-tax Officer and after full satisfaction with the explanation furnished by the petitioner, the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner-assessee, submits that no material is available on record to justify the formation of belief; no allegations are to be found that failure to disclose any particular material on the part of the petitioner has resulted in escapement of income. Mr. Pardiwalla further submits that if the power to reopen is to be exercised by the Assessing Officer beyond the period of four years, there must be a failure on the part of the assessee to disclose truly and fully all material facts required for assessment for that year and that must result in escapement of the income chargeable to tax. He further submits that no reopening is permissible on the basis of a change of opinion. Mr. Pardiwalla, in support of his submission, placed reliance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easons. Reasons provide the link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Officer, in the event of challenge to the reasons, must be able to justify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for the assessment of that assessment year, so as to establish the vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing an affidavit or making an oral submission, otherwise, the reasons which were lacking in material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here were any other facts which were material for the assessment which have not been disclosed by the assessee. Under the circumstances, if there is no failure to disclose material facts, then, even if there is excess relief granted, the assessments cannot be reopened beyond the period of four years from the end of the relevant assessment years. This court in the case of IPCA Laboratories Ltd. [2001] 251 ITR 416 and in the case of Bhor Industries Ltd. [2004] 267 ITR 161 (Bom) has held that notice for reopening of the assessment cannot be issued after a period of four years unless the escapement of income is on account of failure on the part of the assessee to disclose fully and truly all material facts. It has been further held that the Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and circumstances of the case it was open for the petitioner to invoke the writ jurisdiction of this court. So far as the power invoked by the Assessing Officer to reopen the assessment beyond the period of four years as urged by the petitioner is concerned, learned counsel for the Revenue could not justify the reopening based on the material available on record. He fairly conceded that the reopening is beyond the period of four years from the end of the assessment year and no circumstances justifying such reopening beyond four years is available on record. Since the reopening is beyond the period of four years, in the absence of any material to show that there is failure on the part of the assessee to disclose fully and truly all mater ..... X X X X Extracts X X X X X X X X Extracts X X X X
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