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TMI Blog2021 (7) TMI 968X X X X Extracts X X X X X X X X Extracts X X X X ..... ssociation dated 24.06.1997. The facts in brief to be considered are that the assessment order under Section 143 (3) of the Income Tax Act, 1961 (hereinafter referred to as, 'the Act') was passed on 29.12.2008, by the Assessing Officer, for the Assessment Year 2006-2007. The learned Counsel for the petitioner contended that the Return of Income filed along with the details, books of accounts and informations, were considered elaborately by the Assessing Officer and a final assessment order was passed. Even thereafter, a revision order was passed under Section 263 of the Act. The petitioner had gone up to the Income Tax Appellate Tribunal and the Tribunal passed an order on 24.05.2011. Thus, even certain left out issues were adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thus, the impugned rejection order is to be set aside. The learned counsel for the petitioner emphasised that reopening of assessment beyond four years must be done strictly in consonance with the proviso clause and in order to establish the conditions, the authority competent must have tangible material. Thus, in the absence of any such material available on record, reopening of assessment is untenable and in violation of the proviso clause to Section 147 of the Act. 4.The learned Standing Counsel appearing on behalf of the respondents disputed the said contention by stating that the reason for reopening of assessment was communicated. The retention money of Rs. 1,27,94,910/- cannot be allowed as expenditure since it is contingent in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is much wider and beyond four years, but within six years, certain conditions are stipulated in the proviso clause to Section 147. Accordingly, any income chargeable to taxes escaped assessment for such Assessment Year have reason of failure on the part of the assessee, but made a return under Section 139 or in response to a notice under Section (1) or Section 142 or Section 148 or discloses fully and truly all the material facts necessary for assessment for the Assessment Year. Therefore, circumstances are prescribed in the proviso clause for the purpose of reopening of assessment beyond the period of four years, but within six years. Admittedly, in the present case, the reopening is made beyond the period of four years and within a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hargeable to tax has been under assessed; or (ii) such income has been assessed at too low a rate; or (iii) such income has been made the subject of excessive relief under the Income Tax Act; or (iv) excessive loss or depreciation allowance or any other allowance under the Income Tax Act has been computed. Therefore, numerous circumstances are contemplated under the provisions of the Act, providing scope of reopening of assessment, as the very purpose and object of reopening of assessment is to ensure that the income chargeable to tax, which escaped assessment, must be brought under the tax net by following the provisions of the Income Tax Act. 7.The Return of Income filed by the assessee at the first instance is accepted in the normal cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perative in settling the issues in accordance with the provisions of the Act and based on the informations and materials, then they are bound to face the consequences. 8.In the present case, the opportunities provided under the Act were availed of by the petitioner. They have submitted objections. The objections were considered. Reason for reopening is also furnished and in the rejection order impugned, the authorities have categorically stated "therefore, it is clear that this treatment to be given on the retention monies held back by the assessee company from its contracts, but claimed as expenditure by debiting it fully in the P/L account, there had been no true disclosure of material facts by the assessee either in the return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be followed, this Court has no hesitation in forming an opinion that the petitioner is bound to cooperate for the completion of reopening of assessment proceedings initiated under Section 147 of the Act, by producing all the relevant materials and documents and the authorities competent are expected to complete the process by affording opportunity to the writ petitioner, as contemplated and as expeditiously as possible. 10.The learned counsel for the petitioner made a submission that the reason for reopening of assessment is the assessment order passed for the Assessment Year 2009-10. However, the said assessment order was reversed by the Income Tax Appellate Tribunal in its order dated 06.01.2016. Therefore, the reasons furnished for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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