TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Court upholds reassessment validity under Income Tax Act</h1> The Court dismissed the writ petition challenging the sufficiency of reasons for reopening assessment under Section 147 of the Income Tax Act, 1961. It ... Reopening of assessment - Held that:- Having heard the parties and considering the materials placed, this Court is satisfied that complete disclosure sought to be labored by the learned Counsel for the petitioners in an assessment proceeding under Section 147 is not the sole duty of the revenue / respondents alone but, equally, lies at the door step of the petitioners/ assessee company. This Court is also satisfied that the reasons for harbouring the belief of the income having escaped assessment have been clarified in the reply dated 26th /27th July, 2017 and, the process of answering the evidence in detail can start only after the reassessment exercise takes place on the basis of the required disclosures which lie at the door step of the petitioners /assessee company. In the backdrop of above discussion, this Court finds no useful purpose to admit the writ petition. Issues involved:1. Maintainability of writ petition based on sufficiency of reasons for reopening assessment under Section 147 of the Income Tax Act, 1961.2. Requirement of disclosure of reasons for belief of income escaping assessment.3. Validity of the reassessment procedure following a notice under Section 148.4. Interpretation of evidence and disclosure of material facts for assessment under Section 147.5. Application of case law regarding the necessity of sufficient reasons for reopening assessment.Issue 1: Maintainability of writ petition based on sufficiency of reasons for reopening assessment under Section 147:The petitioner contended that the conclusion of the Assessment Officer (A.O.) regarding income escaping assessment must be supported by sufficient reasons disclosed to the assessee company. The petitioner sought further reasons from the A.O. after receiving a notice under Section 148 for reassessment. The Revenue provided details of tentative conclusions, but the petitioner argued that the A.O. must provide reasons directly. The Court noted that the reassessment exercise following a notice under Section 148 fulfills the requirement of providing reasons, and the A.O.'s belief of income escaping assessment was supported by the investigation wing's findings.Issue 2: Requirement of disclosure of reasons for belief of income escaping assessment:The petitioner relied on case law emphasizing that the A.O. must provide sufficient reasons for reopening assessments under Section 147. The Revenue argued that the reasons for reassessment were already indicated in their communication and that the A.O.'s belief was supported by inputs from various sources within the Income Tax department. The Court found that the reasons for income escaping assessment were clarified in the Revenue's reply, and the process of detailed evidence examination could proceed after reassessment based on the disclosed reasons.Issue 3: Validity of the reassessment procedure following a notice under Section 148:The Revenue highlighted that the statutory redressal mechanism was still open for the petitioner and that the reassessment procedure was justified. The Court acknowledged that the reassessment exercise based on the notice under Section 148 was in line with the reasons provided by the Revenue and the A.O.'s belief of income escaping assessment.Issue 4: Interpretation of evidence and disclosure of material facts for assessment under Section 147:The Court referred to a judgment emphasizing the duty of the assessee to disclose material facts necessary for assessment. It highlighted the distinction between full and true disclosure versus suppression of material facts. The Court emphasized that the disclosure of material facts by the assessee was crucial for a fair assessment process.Issue 5: Application of case law regarding the necessity of sufficient reasons for reopening assessment:The Court analyzed the relevance of case law in requiring the A.O. to provide sufficient reasons for reopening assessments under Section 147. It noted that the A.O.'s belief of income escaping assessment must be supported by disclosed reasons. The Court found that the reasons provided by the Revenue were adequate for the reassessment exercise to proceed.In conclusion, the Court dismissed the writ petition, stating that the Revenue had fulfilled its duty of providing reasons for reassessment, and the petitioner's failure to comply with the reassessment process could lead to the Revenue concluding the assessment in accordance with the law.
TaxTMI 
TaxTMI 
