2018 (6) TMI 1852 - HC - Income Tax

Interim Stay Granted on 2017 Tax Re-Opening Notice Due to Jurisdictional Issues and Full Disclosure in Original Assessment.

Akshar Developers Versus Assistant Commissioner of Income-tax, Central Circle-3, Thane.

The HC granted an interim stay on the re-opening notice dated 30th March, 2017, issued under Section 148 of the Income Tax Act, 1961, for the Assessment ... Reopening of assessment u/s 147 - failure to disclose all facts regarding a bank account during the assessment proceedings - notice is beyond the prescribed period of four years HELD THAT:- The petitioner had filed its objections by letter dated 23rd May, 2017 to the reasons inter-alia pointing out that during the course of assessment proceeding, the petitioner had submitted details of its Bank Accounts including that of the Abhudaya Co-operative Bank Limited. Besides, the same Bank Account is also reflected even in their Balance Sheet which is a subject matter of consideration during the assessment proceedings. The order disposing off the objection is completely silent with regard to the petitioner’s contention that there was no failure on its part to disclose all facts with regard to the subject Bank Account during the assessment proceedings to the Department. The impugned notice being beyond the period of four years is hit by the first proviso to Section 147 and in absence of any failure to disclose the facts fully and truly, the AO cannot exercise jurisdiction. Prima-facie, it appears that the impugned notice is without jurisdiction. Accordingly, there shall be interim stay restraining the Revenue from acting further upon the impugned notice dated 30th March, 2017 for Assessment Year 2010-11. Petition under Article 226 challenges the 're-opening notice dated 30th March, 2017' issued under Section 148 for Assessment Year 2010-11; original assessment was completed on 20th March, 2014 under Section 143(3) read with Section 153A. Reasons relied on information from Deputy Director of Income-Tax (INV) that the petitioner had a bank account with Abhudaya Co-operative Bank which was allegedly not disclosed. Petitioner's objections (23rd May, 2017) asserted it had submitted details of its bank accounts, including that account, and that the same account appeared in the Balance Sheet considered during assessment. The order disposing objections is silent on this contention. As the impugned notice is 'beyond the period of four years' it is hit by the 'first proviso to Section 147' and, in absence of any 'failure to disclose the facts fully and truly', the Assessing Officer cannot exercise jurisdiction; prima facie the impugned notice is 'without jurisdiction'. Interim stay granted restraining the Revenue from acting further upon the impugned notice.