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Asstt. Commissioner of Income Tax, Circle-26 (1) , New Delhi Versus M/s. Deesons Traders

2017 (9) TMI 1151 - ITAT DELHI

Reopening of assessment - addition on excessive allowance under the head Repair and Maintenance - eligibility of reason to believe - period of limitation - AO exceeding his jurisdiction - Held that:- A.O. is not empowered to issue notice u/s 148 of the Act after a period of four years from the end of relevant assessment year particularly when there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. Proviso to section 147 itself is c .....

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assessee have been allowed by the revenue while passing order u/s 143(3) as is apparent from the return of income for the aforesaid assessment years available. So the contentions raised by Ld. Sr. DR for the revenue are not tenable nor the case law relied upon by him is applicable to the facts and circumstances of the case in the face of proviso to section 147 of the Act which clearly bars the jurisdiction of the A.O. to reopen the assessment after a period of four years when there is no failure .....

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as the Revenue ), by filing the present appeal sought to set aside the impugned order dated 30.6.2014 passed by the Commissioner of Income-tax (Appeals), XXIV, New Delhi for the asstt. year 2005-06 on the grounds interalia that :- 1. Holding that the case is reopened on the basis of change of opinion. When it was opened on basis of material came by subsequently from the record. 2. Deleting the addition on excessive allowance under the head Repair and Maintenance amounting to ₹ 55,12,474/- .....

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oceeded to conclude that an income of ₹ 57,84,820/- has escaped assessment and reopened the assessment u/s 147 of the Act. Assessee raised comprehensive objection to the show cause notice issued u/s 148 of the Act. A.O. proceeded to hold that amended provision u/s 147/148 are wide enough and can be exercised even when the assessee had declared fully and truly all material facts and after relying upon decision cited as Rakesh Aggarwal vs. ACIT (1996) 87 Taxmann 306/225 ITR, 496 (Delhi) trea .....

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ing the impugned order passed by Ld. CIT(A). 4. Ld. DR for the revenue challenging the impugned order contended that this is not a case of change of opinion and A.O. has rightly reopened the assessment and relied upon cases cited as under :- 1. Raymond Woolen Mills Ltd. vs. ITO and others (236 ITR 34) 2. ACIT vs. Rajesh Jhaveri Stock Brokers (P.) Ltd. (2007) 161 Taxman 316 (Supreme Court)/(2007) ITR 500 (Supreme Court)/(2007) 210 CTR 30 (Supreme Court) 3. Adani Exports vs. DCIT (1999) 240 ITR 22 .....

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eason for belief that income has escaped tax :- The assessee filed return of income Tax for A.Y. 2005-06 on 25.10.2005 declaring income of ₹ 57,84,820/- which proceed u/s 143(1).Subsequently, the case was picked up for scrutiny and notice u/s 142(2) of the I.T. Act was issued on 27.10.2006. The assessment u/s 143(3) of the I.T. Act was made on 27.09.2007 at the income of ₹ 57,84,820/-. The assessee is engaged in the business of shuttering. The assessee supplies shuttering on hire to .....

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ired to be re-opened u/s 147 of the I.T. Act to be reassessed. 7. Undisputedly originally assessment was completed u/s 143(3) at the declared income of ₹ 57,84,820/-. It is also not in dispute that completed assessment dated 27.9.2007 u/s 143(3) has been reopened by the A.O. after a period of four years. It is also not in dispute that the assessee has disclosed fully and truly all material facts necessary for assessment alongwith complete details of repair and maintenance expenses. It is a .....

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nt assessment years asstt. year 2005-06. 9. When we note that the assessment was completed in this case u/s 143(3) on 27.9.2007 and there was no failure on the part of the assessee to disclose fully and truly all relevant facts necessary for assessment, the A.O. was empowered to reopen the assessment within a period of four years from the end of the relevant assessment year, but in the instant case notice u/s 148 of the Act for reopening of assessment was issued on 29.3.2012, copy of which is av .....

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and maintenance expenses have been wrongly disallowed. When we peruse proviso to section 147 of the Act it has amply made the proposition at hand, clear that no action shall be taken u/s 147 after the expiry of four years from the end of the relevant assessment year unless any income chargeable to tax has escaped assessment by reason of failure on the part of the assessee to make return u/s 139 or there is failure on the part of the assessee to disclose fully and truly all material facts necessa .....

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f law has been settled by the Jurisdictional High Court in the case of Wel Intertrade Pvt. Ltd. vs. ITO (2009) 308 ITR 22 and in the case cited as Haryana Acrylic Manufacturing Company vs. CIT 308 ITR 38. 12. Ratio of both the aforesaid judgments is that A.O. is not empowered to issue notice u/s 148 of the Act after a period of four years from the end of relevant assessment year particularly when there is no failure on the part of the assessee to disclose fully and truly all material facts neces .....

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, 2010-11, 2011-12 identical expenses claimed by the assessee have been allowed by the revenue while passing order u/s 143(3) as is apparent from the return of income for the aforesaid assessment years available at page 161 to 169 of the paper book. 14. Furthermore Hon'ble Delhi High Court in the case cited as Oracle System Corporation v. DDIT in W.P. No. 1873/2013 dated 8.10.2015 has also examined the identical issue and has held as under :- Reopening of assessment - Held that :- There is n .....

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