TMI Blog2022 (7) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted WIP details, Interest details, TDS details, contract income, interest income, Balance Sheet along with annexures, and other evidences as required by the assessing officer and the Assessing Officer had considered the same while completing the original assessment u/s 143(3) of the Act dated 07.12.2011. We note that in the assessee`s case in the reasons supplied to the assessee, there is no whisper, what to speak of any allegation, that the assessee had failed to disclose fully and truly all material facts necessary for assessment and that because of this failure there has been an escapement of income chargeable to tax. See KANTIBHAI DHARAMSHIBHAI NAROLA VERSUS THE ASSISTANT COMMISSIONER OF INCOME TAX, WARD 3 (2) (4) [ 2021 (2) TMI 102 - GUJARAT HIGH COURT] as held held that there cannot be any action under Section 147 of the Act after the expiry of a period of four years from the end of the relevant assessment year until and unless the income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make disclosure of all the material facts truly and fully necessary for assessment. Merely having a rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing income of Rs.1,00,00,000/-. 3. Whether on facts and circumstance of the case and in law the Ld. CIT(A) was justified in deleting the addition of Rs.22,71,231/- made by assessing officer on account of Contract Income and Interest Income not shown by the assessee, with an observation that the assessee had shown net Interest income of Rs.14,08,934/- after debiting interest expenditure of Rs.19,62,386/- and regarding balance difference of receipt, the assessee has filed reconciliation statement during the appellate proceedings, without considering the fact that during the assessment proceedings, the assessment had failed to furnish any such evidences on records to prove its claim? 4. On the basis of the facts and circumstance of the case, the learned CIT(A) ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of the assessing officer may be restored. 5. The assessee craves leave to add, alter, amend and/or withdraw any ground(s) of appeal either before or during the course of hearing of the appeal. 3. The facts of the case which can be stated quite shortly are as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss account. 4. Therefore, on the basis of above information available on record, reasons were recorded u/s 148(2) of the Act, by the assessing officer and notice u/s 148 of the Act, was issued on 30.03.2015 and duly served upon the assessee on 31.03.2015. In response, the assessee, vide letter dated 17.04.2015 stated that return filed on 30.09.2009 may be treated as filed in response to notice u/s 148 of the Act. Thereafter, on merit, the assessing officer noted that since, assessee had not furnished relevant documents and evidences during the assessment proceedings, therefore disallowed Rs.1,00,00,000/- shown as undisclosed work in progress and added to the total income of the assessee. The Assessing Officer also made addition on account of short accounted of contract income and interest income to the tune of Rs.22,71,231/-. 5. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A), who has quashed the reassessment proceedings initiated by the assessing officer under section 147 of the Act. While quashing the reassessment proceedings, the assessing officer held that there is no new material received or available with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that income has escaped assessment During the course of post-assessment proceedings, it was observed that the assessee has declared undisclosed income Rs.1,05,00,000/- during the survey proceedings but from the perusal of the Profit Loss Account for the year ending 31.03.2009, relevant A.Y. 2009-10, it is seen that the assessee had shown undisclosed income of Rs.1,05,00,000/- (Schedule 13: Other income). Simultaneously, the assessee had also shown Undisclosure Work in Progress amounting to Rs.5,00,000/- only as against Rs.1,05,00,000/- undisclosed income declared during survey. This has resulted in under assessment of income of Rs.1,00,00,000/-. In view of the above, the case of the assessee stands under assessed to such extent as defined in explanation 2(c) of section 147 of the Income Tax Act, 1961 and hence I have reason to believe that income to such extent escaped assessment and therefore, it is hereby proposed for issue of notice u/s 148 of the Act, and as the case falls under Section 149(1)(b), approval may kindly be considered and accorded, as laid down under proviso to section 151(1) of the Income-tax Act, 1961, as deemed fit. 9. From above reasons r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count, documents, WIP details, evidences and explanations. That is, the assessing officer, has nowhere recorded findings to the effect that assessee has failed to disclose fully and truly all material facts necessary for assessment year 2009-10. The settled position of law is that if an assessment for any year has been completed u/s 143(3) or u/s 147, then no action shall be taken u/s 147 after the expiry of four years from the end of relevant assessment year unless income chargeable tax has escaped assessment by reason of the failure on the part of the assessee. We have examined the original assessment order framed by assessing officer under section 143(3) of the Act and note that there is no allegation that the assessee has failed to disclose fully and truly, all material facts necessary for assessment. As we noted that the re-opening is beyond a period of four years and the original assessment was completed u/s 143(3) of the Act and therefore in the light of the decision of the Hon ble Calcutta High Court in the case of Amiya Sales and Industries vs. ACIT reported in 274 ITR 25 (Cal.), the reopening of assessment is bad in law. We note that there is change in opinion as the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is mind and verification of the facts. But the Assessing Officer has not done so. In holding so we draw support and guidance from the judgment of the Bombay High court in case of Gateway Leasing (P.) Ltd vs. ACIT reported in 117 taxmann.com 442 where it was held as under: 35. Having discussed the above, we may once again revert back to the reasons furnished by Respondent No. 2 for re-opening of assessment under Section 147 of the Act. After referring to the information received following search and seizure action carried out in the premises of Shri Naresh Jain, it was stated that information showed that Petitioner had traded in the shares of M/s. Scan Steels Ltd., and was in receipt of Rs. 23,98,014.00 and therefore, Respondent No. 2 concluded that he had reasons to believe that this amount had escaped assessment within the meaning of Section 147 of the Act. 36. First of all it would be evident from the materials on record that Petitioner had disclosed the above information to the Assessing Officer in the course of the assessment proceedings. All related details and information sought for by the Assessing Officer were furnished by the petitioner. Several hearings took pl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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