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TMI Blog2006 (3) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 143(1)(a) on November 11, 1993. Thereafter, it was converted into a scrutiny assessment and the said assessment was completed under section 143(3) by the order of assessment dated March 7, 1994. Later the assessment was rectified under section 154 by a subsequent order dated April 15, 1996. In respect of the assessment year 1993-94, the original assessment under section 143(3) was completed on March 25, 1996, and the said assessment order also was later rectified under section 154 by order dated March 18, 1997. While the assessments for the impugned two assessment years 1992-93 and 1993-94 were resting so, the Assessing Officer issued notices under section 148 dated July 17, 1998, calling upon the assessee-company to file returns of income for the impugned assessment years in response to the said notices. The reason stated by the Assessing Officer to issue notices under section 148 was that, depreciation at a higher rate was allowed in favour of the assessee-company while completing the original assessments in respect of plant and machinery let out by the assessee-company to other lessees, and also granting 100 per cent, depreciation on items, on the ground that the individual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he depreciation to the normal rate. Aggrieved by the order, the assessee filed an appeal, to the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) agreed with the Assessing Officer and confirmed the action of the Assessing Officer in restricting the depreciation to the normal rate. Aggrieved, the assessee filed an appeal before the Income-tax Appellate Tribunal and also raised additional grounds for the said assessment year, which reads as follows: "The Commissioner of Income-tax (Appeals) should have found that the assessment having been reopened more than five years from the end of the relevant assessment years, the original assessment having been completed under section 143(3), the reopening is barred by limitation, without jurisdiction, against the provisions of law and ab initio void." The point raised in the additional ground was earlier omitted to be incorporated in the grounds filed before the Tribunal by oversight and the ground being legal in nature, the assessee requested the Tribunal to admit the additional ground on record. The Tribunal also admitted the additional ground raised by the assessee-company. The learned counsel appearing fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As far as the above proviso to section 147 is concerned, the law prescribes a period of four years to initiate reassessment proceedings, unless the income alleged to have escaped assessment was made out as a result of failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. In the present case, the question is whether the assessee-company had disclosed fully and truly all the material facts necessary for the assessments and with particular reference to computation of depreciation allowance. The assessee company had filed a full set of accounts before the Assessing Officer comprising profit and loss account, balance sheet and schedules thereto. The assessee-company had furnished the details regarding the acquisition of various machinery and assets and the details regarding the leasing out of those machinery and items to other parties. The assessee had also furnished the details of lease rent received out of those lease agreements. The assessee had also furnished the detailed computation of depreciation mentioning therein the written down value of machinery and assets before and after claiming the depreciation allowance for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to in the proviso or to truly and fully disclose the material facts necessary for the assessment. Whenever a notice is issued by the Assessing Officer beyond a period of four years from the end of the relevant assessment year, such notice being issued without recording the reasons for his belief that income escaped assessment, it cannot be presumed in law that there is also a failure on the part of the assessee to file the returns referred to in the proviso or a failure to fully and truly disclose the material facts. The reasons referred to in the main paragraph of section 147 would, in cases where the proviso is attracted, include reasons referred to in the proviso and it is necessary for the Assessing Officer to record that any one or all the circumstances referred to in the proviso existed before the issue of notice under section 147. After an assessment has been made, in the normal circumstances, there would be no reason for anyone to doubt that the assessment has been made on the basis of all relevant facts. If the Assessing Officer chooses to entertain the belief that the assessment has been made in the background of the assessee's failure to disclose truly and fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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