AI Drafter 
TaxTMI 
TaxTMI 
2014 (10) TMI 547
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....e facts of the present writ petition are enunciated as below:- 3. On 29.11.2006 the petitioner/assessee filed its return of income for the assessment year 2006-2007. The aforesaid return of income of the petitioner was selected for scrutiny assessment vide issue of notice under Section 143(2) of the said Act dated 28.09.2007. 4. On 20.12.2007 the assessing officer issued another notice along with the detailed questionnaire raising queries on 32 points. Vide the said questionnaire, the assessing officer with respect to query No.1 required the petitioner/assessee to submit the audited account along with the audit report. Further, with respect to query No.9, the assessing officer required the petitioner/assessee to submit the details wit....
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....e preceding year. The said audited accounts also contained the details of interest and financial charges of Rs. 81,30,819/- debited to the Profit & Loss Account. 6. With respect to the query No.9 of the assessing officer, the petitioner/assessee furnished schedules of loan taken along with the interest payment. The petitioner/assessee submitted that all the loans taken are for specific business purpose, like purchase of vehicle, plant and machinery etc. 7. With respect to the query No.12 of the assessing officer, the petitioner/assessee furnished details of loans and advances including the advance of Rs. 5,20,57,726/- to the group companies. In reply to the assessing officer's query as to why interest is not charged on the loans and a....
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.... since the petitioner/assessee has granted interest free loan of Rs. 5,20,57,726/-, therefore, proportionate disallowance on account of interest and financial charges of Rs. 56,01,390/- out of total interest and financial charges of Rs. 81,30,819/- debited in Profit & Loss Account should have been made resulting in under assessment of income. 13. On 17.01.2014 the petitioner/assessee submitted their objections to the reopening of assessment, on the ground that reopening is initiated on the basis of review or re-appreciation of the same material and no fresh material of any sort has come in the possession of the department as also there has been no failure on the part of the petitioner/assessee in disclosing fully and truly all material f....
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....of the notice under section 148 of the said Act are reproduced below:- "....The assessment of M/s Global Signal Cables (India) Pvt. Ltd for the assessment year 2006-07 was completed after scrutiny in September 2008 determining an income of Rs. 1,06,25,5578/-. It is gathered that the assessee debited Rs. 81,30,819/- to profit and loss account on account of interest and financial charges. In the auditor's report it was stated that interest free loan upto the tune of Rs. 5,20,57,726/- had been given to other companies. Therefore, proportionate amount of expense on account of interest and financial charge should have been disallowed by the assessing officer. The mistake resulted in underassessment of income of Rs. 56,01,390/- involving short....
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....ot sufficient to reopen assessments beyond the four year period indicated above. The escapement of income from assessment must also be occasioned by the failure on the part of the assessee to disclose material facts, fully and truly. This is a necessary condition for overcoming the bar set up by the proviso to section 147. If this condition is not satisfied, the bar would operate and no action under section 147 could be taken. We have already mentioned above that the reasons supplied to the petitioner does not contain any such allegation. Consequently, one of the conditions precedent for removing the bar against taking action after the said four year period remains unfulfilled. In our recent decision in Wel Intertrade Private Ltd. [2009] 30....
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....ee to, inter alia, disclose material facts, fully and truly. If this condition is not satisfied, there would be a bar to taking any action under Section 147 of the said Act." 20. The facts of the present case are squarely covered by the decision of a Division Bench of this Court in M/s Swarovski India Pvt. Ltd. vs. Deputy Commissioner of Income Tax: W.P.(C) 1909/2013 decided on 08.08.2014 wherein the notice under section 148 of the said Act was quashed for being issued after the expiry of 4 years from the relevant assessment year wherein there was no specific mention of which material facts were not disclosed by the assessee in the course of its original assessment proceedings under section 143(3) of the said Act. The relevant paragraph ....