TMI Blog2021 (6) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... ing documents. The reasons recorded by the AO cannot be brought within the purview of the `failure of the assessee to disclose fully and truly all material facts necessary for his assessment as, obviously, the relevant items were properly disclosed at the time of filing the return of income. Having not drawn any adverse inference against such items in the original assessment, the AO was debarred by the first proviso to invoke section 147 on the basis of the same material which was fully and truly disclosed by the assessee and was available at the time of original assessment. In view of the above factual panorama, we uphold the action of the ld. CIT(A) in quashing the initiation of the reassessment on this legal issue. Reassessment w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l income at ₹ 160.62 crore. Another assessment order was passed u/s.143(3) r.w.s.147 in this case on 29-03-2016. Thereafter, a survey action was conducted by the office of the DCIT (TDS) on 14-02-2017 which divulged that the assessee had not deducted tax at source on Discount to stockiest amounting to ₹ 272.89 crore; Payment of bonus amounting ₹ 1.35 crore; and Payment of interest amounting to ₹ 9.49 lakh. An order u/s. 201(1)/201(1A) was passed treating the assessee in default on the above scores. On the basis of this information, the Assessing Officer (AO) recorded reasons for reassessment on 31-03-2017 and issued notice u/s.148 of the Act. The assessment was finalized u/s. 143(3) r.w.s.147 determining total income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also observed that the assessee provides a discount to the stockiest/distributors. The margin of such discount is worked out to be of 30% which comes out to be ₹ 272,89,86,540/-. This is benefit provided to the distributor/stockiest equivalent to commission paid on which TDS was required to be deducted as per the provisions of sec.194H of the Act which the assessee has failed to deduct. Such failure attracts provisions of section 40(a)(ia) of the I.T. Act 1961 according to which the 100% expenses need to be disallowed. Hence the amount of ₹ 272,89,86,540/- was required to be added to the total income which the assessee has failed to do. It is only owing to the survey action that this discrepancy has come to light. Hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of ₹ 9,49,150/- towards interest that may be payable by the company for delay in payments. Thus, this is contingent liability and not an ascertained liability the deduction for which is not allowed under any of the provisions of the Act. Thus the same is required to be added to the total income of the assessee which the assessee has failed to do. Hence I have reason to believe that income to the extent of ₹ 9,49,140/- has escaped assessment on this count. Therefore, I am satisfied that this is a fit case reopening the assessment under the provisions of section 147 of the Income Tax Act 1961 as based on facts stated above, I have reason to believe that the income to the tune of ₹ 274,34,36,116/- has escaped assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment was completed u/s.143(3) - is that there must be failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. If there is no such failure, the AO cannot take recourse to section 147 of the Act. 6. From the Reasons extracted above, it is seen that all of them are in the realm of the assessee making payments without deduction of tax at source and the last portion is about the assessee claiming deduction of provision of ₹ 9.49 lakh towards interest which was contingent in nature. The factum of such three payments and non deduction of tax at source from them and further claiming deduction of the alleged contingent liability towards interest were patent on the face of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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