TaxTMI 
TaxTMI 
2013 (11) TMI 1511
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....nsideration on 23.12.2004. The assessment was completed u/s 143(3) of the Act on 22.12.2006. Subsequently, the assessment was reopened by issuing notice u/s 148 of the Act on 27.3.2009 and the reopened assessment was completed on 15.12.2009. At the time of filing return of income in response to the notice issued u/s 148 of the Act, the assessee sought the reasons for reopening of assessment. It appears that the AO completed the assessment without furnishing the reasons. Hence the assessee filed a writ petition challenging the assessment order before the Hon'ble High Court of Kerala with the plea that the AO has passed the said assessment order without following the procedures prescribed by the Hon'ble Supreme Court in the case of GKN Drive shafts Vs. ITO (259 ITR 19). The Hon'ble High Court held that this issue may urged before Ld CIT(A), since the matter requires verification of the assessment record. 3. In the case of GKN Drive shafts (India) Ltd, the Hon'ble Supreme Court has laid down the procedure as under:- "When a notice under section 148 of the Income tax Act 1961 is issued, the proper course of action for the noticee is to file the return and, if he so desires, to se....
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....n the part of the assessee to furnish a true and full disclosure of income in the return of income or statement of total income as required in the Income tax Act and taxable income chargeable to income tax. There is reason to believe that income chargeable to tax has escaped assessment. Hence, after recording reasons for the escapement of income, the assessment was once again reopened u/s 147 by issuing a notice u/s 148 on 23.3.2011. On the request of the assessee the reason for reopening the assessment were communicated to the assessee on 18-08-2011. The assessee has not objected to the reopening the assessment. Subsequently a notice u/s 143(2) was served on 27-09-2011. In response to this notice, the authorized representative of the assessee Shri Raju Thomas, FCA appeared on various dates mentioned above and the case was heard.." It is pertinent to note the AO had reopened the assessments on both the occasions only to make disallowances u/s 40(a)(i) and u/s 40A(3) of the Act. 5. Before Ld CIT(A), the assessee challenged the validity of reopening on more than one reasons. The Ld CIT(A) again quashed the reassessment proceeding. Hence, the revenue has filed this appeal before....
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....all material facts necessary for assessment, if he wants to take action for reopening of assessment after the expiry of four years from the end of the relevant assessment year, if the earlier assessment of the said year was completed either u/s 143(3) of sec. 147 of the Act. 8. We notice that the Ld CIT(A) has given a clear finding that there was no failure on the part of the assessee in this regard. For the sake of convenience, we extract below the observations made and the decision taken by Ld CIT(A) on this issue:- "10.0 It is seen from the submission of the appellant that the order of the Assessing Officer has been challenged on legal grounds i.e. the validity of issue of notice u/s. 148 has been questioned as well as the appellant has assailed it on merits. The appellant has reied upon a number of judgments of Hon'ble courts in its support. The main arguments given by the appellant against the issue of notice u/s. 148 are as under: i) The case was reopened after four years from the end of the relevant assessment year. The Assessing Officer in his notice u/s. 148 issued has not made any allegation that there was a failure on the part of the appellant to disclose the ma....
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....e Rs.295060/- is also to be disallowed. Again the following payments made by the assessee to non residents outside India are made without deduction TDS. Hence are to be disallowed u/s. 409a)(ia): Rs.36,61,541/- Rs. 5,56,370/- Rs. 48,975/- Rs. 9,40,050/-" 10.2 Further, it is seen from the order sheet that the Assessing officer has recorded under mentioned reasons vide order sheet entry dated 17.3.2011 (signed on 18.3.2011) "17.3.2011 The 'a' has paid Rs.16,89,440 in cash, 20% of the same was to be disallowed u/s. 40A(3) but only Rs.42,828/- was disallowed. The payments made by the 'a' to NRIs are made without deducting TDS in the following payments which are to be disallowed u/s. 40a(i): Business promotion expenses Rs.36,61,541/- Payment made to Biju George Rs. 5,56,270/- and Rs. 48,975/- Payment made to Savy Mathew Rs. 9,40,050/- Approval for issue of notice u/s. 148 submitted to CIT. Sd/- AO 18.3.2011" 10.3 It is, therefore, seen that nowhere in the reasons recorded, it has been mentioned that escapement of income is on account of failure on the part of the assessee to fully and truly disclose all material facts necessary for assessment. T....