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TMI Blog2025 (5) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... s 147 of the Income- tax Act, 1961 (the "Act'). 2. On the facts and in the circumstances of the case, the learned CIT(A) has, legally erred in not cancelling, quashing or annulling, the impugned assessment, inspite of inordinate delay of more than six years from the end of the Assessment Year in supplying the reasons for reopening 3. On the facts and in the circumstances of the case, the learned CIT(A) has, legally erred in not cancelling, quashing or annulling the impugned assessment order inspite of non- compliance of the decision of the Hon'ble Supreme Court in the case of G. K. N. Driveshafts 259 ITR 19 (SC) 4. Without prejudice to above grounds, and in the alternative, it is submitted that in view of the first proviso to section 147 of the Act and in view of absence of a categorical finding either in the reasons recorded or in the assessment order, that the appellant has failed to disclose fully and truly all material facts, no action of reassessment can be made after a period of four years from the end of the relevant Assessment Year. 5 On the facts and in the circumstances of the case, the learned CIT(A) has, legally erred in upholding the impugned assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that income had escaped assessment on account of failure of Assessee to disclose fully and truly all material facts necessary for framing assessment. Since the reasons recorded failed to do so, the reasons recorded were bad in law and therefore, liable to be quashed. Further, the notices/report on the basis of which re-assessment proceedings were initiated were already with the Assessing Officer prior to the completion of re-assessment proceedings under Section 143(3) read with Section 147 of the Act on 25/03/2004 and therefore, there was no new tangible material to initiate reassessment proceedings. 4. Per contra the Learned Departmental Representative placed reliance upon reasons recorded as reproduced in Paragraph 1 of the Assessment Order and submitted that the reassessment proceedings were initiated on the basis of the report received from Enforcement Directorate. The Assessing Officer has sufficient tangible material to initiate the reassessment proceedings and that the Assessee had failed to disclose the facts forming part of report of Enforcement Directorate which were necessary for framing the assessment on the Assessee. Reliance was also placed on report, dated 08/10/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach to the conclusion as to whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year. It is for the Assessing Officer to form his opinion. It is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. Reasons are the manifestation of mind of the Assessing Officer. The reasons recorded should be self- explanatory and should not keep the assessee gues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the assessment records of the assessee company, it is observed that the above remittance is not reflected in the details filed. The nature of the remittance and its treatment in the books of account has not been clearly spelt out. It is apparent from the assessment records of AY 1998-99 that the assessee has not included the foreign inward remittance of US $ 1.75 million (ie, approx. Rs. 7 crore at an average conversion of Rs. 40/- per US $). As per the show cause notice No. T-4/45-B/SDE (AKB/2001) SCN-VIII, the assessee company has allegedly violated the provisions of section 10(1B) and sec. 48 of the FERA, 1973. The charge as made out in the SCN is as under:- "Unauthorised payment of US $ 1 million to account of Dencar Overseas SA from xx xx Guest House without permission of RBI. Transfer to one xx xx Muscat non- recovery of US $ 5,00,000 and unauthorized assignation of recovery of balance to Taj HK all without permission of RBI." Further, it is stated that an amount of US $ 1 million was admittedly transferred on 2.10.1993 to Dencar Overseas SA on account of Taj HK. The payee was Mr. xx xx (formerly Chairman of Gulf Air). The nature of transaction for which this paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d assessment for any assessment year, he may, subject to the provisions of sections 148 to 153 assess or reassess such income and also any other income chargeable to tax which has escaped assessment for which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year.) Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub section (1) of section 141 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. Explanation 1-Production before the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X
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