TMI Blog2018 (10) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 2009-10 fell on 31.03.2010, the impugned notice under section 148 having been issued on 15.03.2016, I am of the view that the same is well within the period of six years and therefore, find that the impugned reopening of the assessment is not barred by limitation as contended by the petitioner. The petitioner further contended that notice issued under section 148 dated 15.03.2016 did not allege that the assessee has not disclosed fully and truly all the materials necessary for the assessment and therefore, the issuance of mere notice without such material averment is bad. We do not think that the petitioner is justified in making such contention, more particularly, when the proceedings issued with reasons for reopening the assessment is in clear and categorical terms stated that the assessee has not disclosed fully and truly all the material details necessary for the assessment. - Decided against assessee. - W.P.No.20625 of 2016 And W.M.P.No.17707 of 2016 - - - Dated:- 4-10-2018 - Mr. K. Ravichandrabaabu J. For the Petitioner : Mr.R.Venkatanarayanan for M/s. Subbaraya Aiyar Padmanaban For the Respondent : Mrs.Hema Muralikirshnan, Senior Standing Counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of opinion. It was also informed that there was no material available to conclude that the income has escaped assessment for issuing notice under section 148. The petitioner had also informed the respondent that there had been full and true disclosure of all material facts. However, the respondent through the impugned proceedings rejected the objection. The very reopening of the assessment for the second time beyond four years is barred by limitation. 3. A counter affidavit is filed by the respondent wherein it is stated as follows: The writ petition is not maintainable since the petitioner is having effective and alternative remedy once the assessment order is passed under the Act. The reopening of the assessment was not barred by limitation. The assessee has not disclosed the advance made to the said S.Nagarajan for a sum of ₹ 2.75 crores towards the purchase of property at Adyar, Chennai. Thus, there was failure on the part of the Assessee in not disclosing fully and truly, all material facts. Based on the tangible information available with valid reason existed, the conclusion was arrived that income had escaped assessment. As the assessee has not fully and truly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ajan amounting to ₹ 2.75 crores is also mentioned. Therefore, there is no failure on the part of the assessee to disclose the advance made to Nagarajan during the re-assessment proceedings. 5. Heard learned counsel for the petitioner and the learned counsel appearing for the respondents. 6. The petitioner is aggrieved against the reopening of the assessment. The challenge made in this writ petition is against the proceedings of the respondent in rejecting the objection to reopen the assessment. The first objection raised by the petitioner against such reopening is on the ground of limitation. According to the petitioner, when the Assessing Officer completed the re-assessment under Section 143(3) read with 147 on 30.12.2011, issuing of notice once again under section 148 on 25.03.2016 is barred by limitation. On the other hand, it is the case of the Revenue that the subject matter escapement of income namely, an advance of ₹ 2.75 crores made to one S.Nagarajan for purchase of land was not shown in the original return filed for the assessment year 2009-10 and therefore, as per proviso to Section 147, notice issued to reopen even after the expiry of four years, bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the first proviso under section 147 to reopen the assessment beyond the period of limitation, cannot be sustained. On the other hand, the said material is sought to be relied on by the revenue as a tangible material for reopening the assessment once again. 8. It is not in dispute that the original assessment can be reopened at any number of times within the period of limitation prescribed under section 147 read with section 149. In this case, admittedly, the impugned reopening of the assessment was initiated after the period of four years. In order to justify such reopening after such limitation period, the Revenue has to satisfy that any one of the ingredients as stipulated under the first proviso to section 147 is satisfied. Section 147 reads as follows: If the Assessing Officer 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 proceedings under this section, or recompute the loss or the depreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished by the assessee before the Assessing officer, during the earlier reassessment proceedings, also contained the advance made to the said S.Nagarajan to the tune of ₹ 2.75 lakhs. It is true that this particular detail regarding advance made to the said person is considered as a tangible material to reopen the assessment. No doubt, this material could give rise to a cause of action for the reopening of the assessment once again, but it should be borne in mind that any number of reopening could be done only within the time prescribed under section 148 read with section 149. If the Assessing Officer is having reason to believe that the income has escaped the assessment, based on such tangible material, he can reopen the assessment within four years. If such reopening is sought to be done after four years, then the requirement of satisfying either of the two conditions as stated in the first proviso to section 147 would arise. In this case, the Revenue contends that the assessee has failed to disclose fully and truly all material facts necessary for its assessment. In support of such contention, they seek to refer to the original return. 10. Admittedly, the original ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, whatever the materials filed during the reassessment proceedings relatable to a particular issue, cannot be considered as the true and full disclosure, unless such material is having any connection with the issue for which such reopening was done. On the other hand, such material, not relatable to the issue for the earlier reopening proceedings, will only take the shape of a new and tangible material before the Assessing Officer to reopen the assessment once again. 11. Now let me consider as to whether the reopening of assessment is barred by limitation as contended by the petitioner. It is seen that the assessee filed the original return on 30.07.2009 and the same was processed under section 143(1). Thereafter, the earlier reopening notice under section 148 was issued on 21.02.2011, admittedly within time. Consequently, the reassessment order under section 143(3) read with section 147 was passed on 30.12.2011. Perusal of the said order would show that the Assessing Officer has re-assessed the income and finally arrived at the quantum of tax payable, surcharge and interest. Therefore, it is evident that the original order of assessment made under Section 143 (1) have been r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Income Tax), (2008) 296 ITR 0573 (Commissioner of Income Tax vs. Elgi Ultra Industries Ltd.,) and 2009 317 ITR 0066 (Thiagarajar Mills (P) Ltd. vs. Deputy Commissioner of Income Tax) to contend that mere escapement of income is not sufficient to justify the initiation of action after expiry of four years and such escapement must be by reason of failure on the part of the assessee to disclose truly and fully the material facts necessary for the assessment. I have already discussed supra and found that there was failure on the part of the assessee in not disclosing truly and fully the material facts with regard to the subject matter transaction in the original return. Therefore, the above decisions will not help the petitioner as the same are factually distinguishable. 15. (2010) 320 ITR 0561 (Commissioner of Income Tax vs. Kelvinator of India Ltd.) is relied on to contend that change of opinion cannot be a reason for reopening the assessment. Here again, the above decision, which is factually distinguishable, will not help the petitioner since the question of change of opinion does not arise in this case as admittedly, the subject matter income was never shown in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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