TMI Blog2022 (8) TMI 1264X X X X Extracts X X X X X X X X Extracts X X X X ..... udicata which does not apply to income-tax proceedings. Suffice is to say that when the facts are not different it is necessary to maintain consistency as held by the Hon ble Supreme Court in Union of India vs. Kumudini Narayan Dalal [ 2000 (12) TMI 101 - SC ORDER] and CIT vs. Narendra Doshi [ 2001 (7) TMI 10 - SUPREME COURT] The contention of the Revenue that Explanation I to section 147 has been overlooked is devoid of any merit. The provisions contained in the present Explanation I were contained earlier in the then Explanation 2 prior to substitution of section 147 w.e.f. 01.04.1989. While interpreting the Explanation 2 the Hon ble Calcutta High Court in Imperial Chemical Industries Ltd. [ 1974 (10) TMI 9 - CALCUTTA HIGH COURT] observed that what the Explanation II refers to are voluminous account books and similar other documents which requires very careful scrutiny and from which material evidence cannot be discovered inspite of due diligence being exercised. Such is not the case of the assessee before us. On the contrary, facts reveal that books of account and other necessary documents were submitted before the AO during assessment proceedings and after scrutinizing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer ( AO ) disposed off the same vide order dated 26.03.2015 and completed the assessment on 30.03.2015 under section 148 read with section 143(3) of the Act treating the income declared by the assessee under the head capital gains as income from business of share trading. 4. Aggrieved, the assessee filed appeal before the Ld. CIT(A) who held that the reopening of the assessment under section 147 of the Act is ab initio void and on merits also the addition is not sustainable by recording his findings and observations in para 4.2 of his appellate order as under :- 4.2 I have gone through the facts of the case, the reasons recorded by the AO and the written submission made by the AR and the following points emerge: i. The appellant had filed the return for the assessment year 2008-09 showing income under the head capital gains on sale of shares; ii. The said return of income was assessed u/s 143(3) of the Act and the returned income was accepted. During the course of these proceedings (original assessment proceedings), the AO has gone through the various documents called for and has examined the issue of short term capital gains shown by the appellant as is evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before the Tribunal challenging the findings of the Ld. CIT(A) and all the three grounds of appeal relate thereto. 6. The Ld. DR supported the order of the Ld. AO. He submitted that the AO examined only the details of transactions in earlier AYs and the nature of transaction was never examined. Hence, it cannot be said that reopening of assessment is vitiated as it was only based on change of opinion. The Ld. DR laid stress on Explanation 1 to section 147 which explains what will not necessarily amount to disclosure within the meaning of the provisions of section 147. He argued that the Ld. CIT(A) has not taken notice of the said Explanation. 7. The Ld. AR drew our attention to para 3 to 6 of the reassessment order wherein the Ld. AO has indicated that there is failure on the part of the assessee to disclose full and true particulars necessary for assessment. He submitted that in response to item 11 and 12 of the questionnaire dated 05.02.2010 relating to script-wise details of capital gain (page 58 of Paper Book), the assessee had furnished full and complete details in the format prescribed by the Ld. AO which appears at page 60 61 of the Paper Book. Therefore, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: 8.1 A bare reading of the above provision would reveal that in order to invoke this provision any income chargeable to tax should have escaped assessment due to failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. 8.2 In Sabharwal Properties Industries (P) Ltd. vs ITO (2016) 382 ITR 547 (Del), the Hon ble Delhi High Court held that it is well settled that the reasons recorded for reopening the assessment have to speak for themselves. They have to spell out that- (i) there was a failure of the assessee to disclose fully and truly all material facts necessary for the assessment and (ii) the reasons must provide a live link to the formation of the belief that income has escaped assessment. 8.3 Hon ble Bombay High Court in the case of Pr.CIT vs. L T Ltd. (2020) 113 taxmann.com 47 (Bom) held that in absence of any failure on the part of assessee to disclose fully and truly all material facts at the time of assessment, reassessment proceedings could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted. There is no material information with the Ld. AO to establish escapement of income by the assessee. If the income is reassessed as business income it is merely a case of change of opinion and cited the decision of Hon ble Supreme Court in CIT vs. Kelvinator of India Ltd. 320 ITR 561 (SC). 9.3 Over-ruling the objections of the assessee, the Ld. AO completed the impugned re-assessment which has been vacated by the Ld. CIT(A) and in our opinion, rightly so. 9.4 Failure to disclose fully and truly all material facts necessary for assessment is sine-qua-non for assuming jurisdiction under first proviso to section 147 of the Act. The assessment order dated 31.08.2010 for AY 2008- 09 itself reveals that it was a scrutiny case. Questionnaire accompanied the notice under section 142(1) of the Act. In the first query itself, the assessee was asked to state the nature of business and other financial activities performed during the year to which the reply of the assessee was that she was doing the investment in shares and securities during the year. In her return, the assessee had declared LTCG of Rs. 12,84,43,499/- which she claimed exempt and STCG of Rs. 16,91,56,994/-on which t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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