Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2019 (11) TMI 211

..... nder the Act, is fairly settled. AO can re-open an assessment only in accordance with the express provisions provided in Section 147/148 of the Act. It is only on the AO strictly satisfying the provisions of Section 147 of the Act that he acquires jurisdiction to re-open an assessment. Section 147 of the Act, clothes the Assessing Officer with jurisdiction to reopen an assessment on satisfaction of the following: (a) The Assessing Officer must have reason to believe that (b) Income chargeable to tax has escaped the assessment and (c) In cases where the assessment sought to be reopened is beyond the period of four years from the end of the relevant assessment year, then an additional condition is to be satisfied viz: there must be failure on the part of the Assessee to fully and truly disclose all material facts necessary for assessment. The requirement in the first proviso to Section 147 of there having to be a failure on the part of the Assessee "to disclose fully and truly all material facts" does not at all apply where the initial return has been processed under Section 143(1) The reasons recorded by the AO is on the basis of verification of the return of income filed .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... letter dated 19.04.2012 submitted that the return of income filed by him on 27.10.2005 be treated as return of income in response to notice u/s 148 of the Act. The case was thereafter taken up for scrutiny and consequently the assessment was framed u/s 143(3) r.w.s 147 of the Act vide order dated 19.03.2013 and the total income was determined at ₹ 15,13,090/-. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who vide consolidated order for A.Ys. 2005-06 to 2007-08 dated 27.11.2018 (in appeal No. SLI/219/13-14) granted partial relief to the assessee. Aggrieved by the order of Ld.CIT(A), the assessee is now in appeal and has raised the following grounds : 1. Learned A.O. has erred in fact and in law in upholding the reopening of the assessment without appraising that there is no valid satisfaction / approval for reopening and reason recorded are arbitrary. 2. Learned CIT (A) has erred in fact and in law in confirming addition u/s.68 of ₹ 350000/- in respect of loan given by the appellant to Gajanan Koli in spite of the fact that the loan is given out of tax paid Income and disclosed income and addition amounts to double' taxation. 3. Learne .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... refore the reopening should be held to be invalid. He further submitted that the loans given by the assessee to Shri Gajanan Koli are reflected in the Balance sheet of the assessee which was filed by the assessee along with the original return of income and in support of which he pointed to the copy of the Balance Sheet placed in the Paper Book. He thereafter submitted that there is no evidence of escapement of income and that for mere verification, reassessment proceedings cannot be initiated. He therefore submitted that the reassessment be held to be invalid. He thereafter submitted that for identical reasons, the reopening was resorted by the Department in the case of the family members of the assessee, viz, Shri Kailash Gidwani, Shri Sunil Gidwani and Shri Amit Gidwani. When the matter in their cases was carried before the Tribunal, the Co-ordinate Bench of the Tribunal vide order dated 11.09.2019 struck down the initiation of re-assessments in their cases. In support of his aforesaid contentions, he pointed to the order of the Tribunal and also pointed to the relevant paras therein where the reasons for reopening in those cases are noted. He therefore submitted that since the .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ears from the end of the relevant assessment year, then an additional condition is to be satisfied viz: there must be failure on the part of the Assessee to fully and truly disclose all material facts necessary for assessment. The requirement in the first proviso to Section 147 of there having to be a failure on the part of the Assessee "to disclose fully and truly all material facts" does not at all apply where the initial return has been processed under Section 143(1) of the Act. 8. In the present case it is required to be noted that by the impugned notice, the assessment for AY 2005-06 is sought to be reopened in exercise of power under Section 147 of the I.T Act. The reasons recorded to reopen the assessment are as under : According to information gathered from informed sources, local enquiries and media reports, it has come to be known that Shri Karihaiyalal Gidwani, owns three flats, one in his name and two in the names of his two sons - Kailash and Amit in .the Adarsha Housing Society. Again, one flat is learned to be booked in the name of Shri Gajanan S. Koli, where apparently it is believed that Shri Sunil K. Gidwani, son of Kanhiyalal Gidwani, has lent finance t .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ssment is concerned, I fully agree only to that extent with the aforesaid proposition but at the same time various high courts have held that, even in such cases, where return of income is processed u/s 143(1) of the Act, the reopening of an assessment can only be done if there is reason to believe that income chargeable to tax has escaped assessment. Here it would be relevant to refer to the observations of Hon ble Delhi High Court in the case of CIT Vs. Orient Craft Ltd reported in [2013] 29 taxmann.com 392 (Delhi) wherein the Hon ble High Court has observed that the expression reason to believe cannot have two different standards or sets of meaning, one applicable where the assessment was earlier made u/s 143(3) of the Act and the other applicable where an intimation was earlier issued u/s 143(1) of the Act. It observed that it is open to the assessee to contend that notwithstanding that the argument of change of opinion is not available to him, it would still be open to him to contest the re-opening on the ground that there was either no reason to believe or that the alleged reason to believe is not relevant for the formation of the belief that income chargeable to tax has esca .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||