TMI Blog2023 (6) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... on precedent for reopening of an assessment beyond the period of four years from the date of assessment. This is a pre-condition set out in the statute itself. Merely by adding a line in the reasons recorded by the Assessing Officer that the assessee had failed to disclose fully and truly all material facts, requirement of proviso to section 147 of the Act would not be satisfied for the purpose of reopening of the assessment u/s 147 - No merit in the reopening of the assessment - Decided in favour of assessee. - ITA No. 1984/DEL/2022 - - - Dated:- 9-6-2023 - Shri N.K. Billaiya, Accountant Member, And Shri Anubhav Sharma, Judicial Member For the Assessee : Dr. Rakesh Gupta, Adv, Shri Deepesh Garg, Adv For the Department : Shri Bhopal Singh, Sr. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- This appeal by the assessee is preferred against the order of the ld. CIT(A) - 27, New Delhi dated 27.06.2022 pertaining to Assessment Year 2014-15. 2. The solitary grievance of the assessee in Form No. 36 reads as under: 1. That the ld. CIT(A) has erred in law and on facts in not deleting the disallowance of Rs. 25 lakhs made by the Assessing Officer u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o filed by the assessee, he shall not proceed further in the matter for a period of four weeks from the date of service of the order rejecting objections on the assessee. The above procedure is to be followed strictly for reopening of assessment. 9. This judgment was followed by the co-ordinate bench in the case of Hirachand Kanuga in ITA No. 4261 and 4262/MUM/2012. The relevant findings read as under: 14. Proceeding further, a perusal of the assessment order show that the AO has supplied the reasons recorded on 15.11.2010. The assessee filed his objection on 25.11.2010. The objections filed by the assessee were rejected on 14.12.2010 and the assessment order was made on 24.12.2010. Thus the AO did not wait for four weeks from the date of the rejection of the objections and thereby violated the principles enunciated by the Hon'ble Jurisdictional High Court in the case of Asian Paint Ltd. (supra) wherein the Hon'ble High Court has observed as under: Reassessment-Notice u/s. 148- Objections by assessee-If the AO does not accept the objections filed by the assessee against reopening of assessment, he is not to proceed further in the matter for a period of fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dies after rejection of the objections of the assessee. In view of the fact that the AO has disposed of the objections of the assessee on 22.11.11 and passed the assessment order on 19.12.2011, it is clear that no such time was granted to the assessee. 6. The relevant observations of the Hon'ble High Court of Bombay in Bharat Jayantilal Patel [supra] reads as under: 21. For the first contention of Mr.Pardiwalla to be considered, it is material to note that on 11th September, 2014 the petitioner addressed a detailed communication setting out his objections to the recorded reasons. These objections which are elaborate run into about 9 pages. Thereafter, the petitioner pointed out on 8th December, 2014 that he was required to attend the office of the Deputy Commissioner of Income Tax on 9th December, 2014. He pointed out as to how the reasons were supplied and how they have been dealt with and objected to by him. The petitioner specifically requested the assessing officer not to proceed with the scheduled hearing till the objections raised to the reasons have been disposed of by a speaking order. 22. On 5th March, 2015 a communication was addressed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [supra], we have no hesitation in quashing the assessment order dated 10.03.2022 framed u/s 147 r.w.s 143(3) of the Act. 12. However, we would not rest out decision at this stage, but would like to proceed in deciding the appeal on merits of the case. 13. The reasons for reopening of the assessment read as under: 14. A perusal of the above reasons shows that the reopening of the assessment is after four years from the end of the relevant A.Y. Therefore, as per the relevant provisions, the Assessing Officer is bound to show that there was failure on the part of the assessee to fully and truly disclose all material facts necessary for its assessment. 15. The payment of Rs. 25 lakhs to Sanyals was towards liasoning done by them in furtherance of the contract work of the assessee. A bare perusal of the reasons mentioned hereinabove do not even allege that there has been a failure on the part of the assessee to disclose any material facts. 16. The claim of expenditure was made and was thoroughly examined during the original assessment proceedings. In our considered opinion, whether the claim of expenditure is for legitimate needs of business expediency cannot be q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO that the petitioner has failed to disclose fully and truly all material facts by reason of the fact that it had claimed more deduction than allowable to it. Moreover, in para 3.2 of the affidavit in reply, the AO has averred that on verification of the record, it is found that the assessee had claimed deduction u/s 80M of the Act to the tune of Rs. 32,55,000/- towards deduction u/s 80M of the Act on the dividend of Rs. 60,06,000/- received from the Unit Trust of India which was granted by the AO without discussing the issue in the assessment order and without looking into the provisions of the Act. Thus, it is apparent that the formation of belief of the AO that income chargeable to tax has escaped assessment is based upon the record before him. Under the circumstances, it is apparent that there is no failure on the part of the petitioner to disclose fully and truly all material facts and that the assessment is sought to be reopened on the ground that the earlier AO had made an error while framing the original assessment. Therefore, by merely adding a line in the reasons recorded that the petitioner had failed to disclose fully and truly all material facts the requirement of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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