TaxTMI 
TaxTMI 
2016 (5) TMI 1159
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....------------------------------------------------ The assessee filed its return of income for A.Y. 2003-04 on 29/11/2003 declaring total income of Rs. 7,22,636/-. The assessment was completed u/s.143(3) of the Income Tax Act, 1961 on 30/03/2006 determining total income of Rs. 8,32,640/-. On verification of the case record from the statement No.II of Clause of Tax Audit Report, it is seen that there has been delay in the payment of P.F. Contribution as under : Month Amount Due date Date of payment June 2002 36,370 15/07/2002 26/07/2002 August 2002 38,960 15/09/2002 24/09/2002 November 38,622 15/12/2002 20/12/2002 Total 1,13,952 The payments were made beyond due dates, therefore, the amount of Rs. 1,13,952/- was required to be disallowed which was not done which resulted in under assessment of income of Rs. 1,13,952/-. Leading to short levy of tax of Rs. 41,877/- including surcharged. Further, it is seen also seen that the assessee has claimed and disallowed deduction of Rs. 3,04,867/- u/s.80IB of the Income Tax Act, 1961. The same deduction was allowed only on the basis of declaration certificate as per Form No.10CCB. Full Certificate in....
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.... was in excess of the limit of Rs. 3 Crs. allowable to claim the deduction u/s 80IB(3) and thus, the assessee had not disclosed fully and truly the material facts for the purposes of claiming the deduction u/s 80IB(10) and hence, the reopening u/s 148 was justified. 5] The learned CIT(A) ought to have appreciated that the reopening after a period of four years was not justified for the following reasons - a. The assessee had duly submitted the complete copy of the audit report in Form 10CCB at the time of filing the return of income and hence, the reopening u/s 148 on the ground that the said report was not filed at the time of filing the return of income is not justified. b. Even assuming that the complete copy of the audit report in Form 10CCB was not filed along with the return of income, the fact that the value of plant and machinery exceeded the maximum limit for claiming the deduction uls 80IB(3) was evident from the balance sheet filed along with the return of income and therefore, there was no failure on the part of the assessee to disclose any material facts and hence, the reopening u/s 148 was justified. Without prejudice to the above grounds, the assessee submits th....
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.... proviso to section 147 he submitted that as per the said provision where an assessment u/s.143(3) has been made for the relevant assessment year no action shall be taken under this section after the expiry of 4 years from the end of the relevant assessment year unless any income chargeable to tax has escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for an assessment in that assessment year. 8. Referring to the said notice he submitted that in the notice issued u/s.148 by the AO there is no mention of any failure on the part of the assessee to disclose fully and truly all material facts necessary for the purpose of completion of the assessment. Referring to the order of the Tribunal in assessee's own case for A.Y. 2005-06 he submitted that under identical circumstances for non allegation by the AO in the notice issued u/s.148 regarding failure on the part of the assessee to disclose fully and truly all material facts necessary for the purpose of completion of assessment the Tribunal has quashed the notice u/s.148. He accordingly submitted that this being a covered matter in favour of the assessee by th....
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....ment. 12. We find an identical issue had come up before the Tribunal in assessee's own case in A.Y. 2005-06. The Tribunal after considering various decision of the Hon'ble Bombay High Court held when that there is no allegation by the AO that there is any failure on the part of the assessee to fully and truly disclose all material facts necessary for completion of the assessment and the notice issued u/s.148 is beyond a period of 4 years from the end of the relevant assessment year, then such notice is void ab-initio. The relevant observation of the Tribunal from para Nos.18 to 23 read as under : "18. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee in the instant case has filed his return of income u/s.139(1) on 03-10-2005 and the AO completed the assessment u/s.143(3) on 24-12-2007. The notice issued u/s.148 on 19-01-2011 is admittedly beyond a period of 4 years from the end of the relevant assessment year since the period of 4 years from the end of the relevant assessment year ends on 31- 0....
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....ry to turn to section 147 of the Act, which reads as under : "147. Income escaping assessment.- If the Assessing Officer has reason to believe that any income chargeable to tax has escaped 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 and 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 subsection (1)....
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....or 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. The reasons are the manifestation of the mind of the Assessing Officer. The reasons recorded should be self-explanatory and should not keep the assessee guessing for the reasons. Reasons provide the link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Officer, in the event of challenge to the reasons, must be able to justify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between the reasons and evidence. That vital link is the safe-guard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing an affidavit or making an oral submission, otherwise, the reasons whic....
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....tment then in the garb of reopening of assessment review would take place". The aforesaid observation of the Apex court make it clear that sanctity must be attached to the assessment orders and it cannot be disturbed merely on account of change of opinion. This sanctity to assessment orders is not based on the basis of the time that has lapsed from the assessment order passed in the regular proceedings to the issue of notice for reopening an assessment. 7) Therefore, where all material facts necessary for determination of the income have been disclosed by the assessee and the Assessing officer has taken a particular view on those disclosed facts as reflected in the Assessment order passed in regular proceedings, then without anything more, it would not be open to reopen those assessment proceedings. For in such a case it is a clear case of change of opinion. In the present facts it is very clear that during the assessment proceedings leading to the assessment order dated 11/11/2009 the petitioner had disclosed all facts with regard to deduction being claimed on account of labour charges and radiography charges. In fact, the assessment order dated 11/12/2009 records the fact that ....
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....dated 15/10/2012 the additional ground to reopen assessment is the lack of correlation between the payment received by the petitioner and the TDS Certificate issued by the persons making payment to it during the assessment year 2007-08. This according to order dated 15/10/2012 resulted in under assessment of income to the extent of Rs. 21.61 lacs. The aforesaid issue was not one of the grounds specified in the reasons communicated to the petitioner on 23/7/2012 for the purpose of reopening the assessment for assessment year 2007-08. Our Court in the matter of Hindustan Lever Ltd. v. R.B. Wadkar, Assistant Commissioner of Income Tax and others reported in (2004) 268 ITR Page 332 has held that for the purpose of examining the jurisdiction to reopen a completed assessment one is only concerned with the reasons recorded at the time of issuing notice under Section 148 of the Act. These reasons cannot be supplemented/ improved upon later. Therefore, the order dated 15/10/2012 disposing of the objection also cannot be sustained. So far as the ground urged by Ms. Khan that reopening of assessment has been done on the basis of audit objection, the same is not being examined. This is for the....
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....there is a failure to disclose fully and truly all material facts necessary for assessment and having observed that there is such a failure to proceed under section 147. It must follow that where the Assessing Officer does not record such a failure he would not be entitled to proceed under section 147. As observed earlier,' the Assessing Officer has not recorded the failure on the part of the petitioner to fully and truly disclose all material facts necessary for the assessment year 1997-98. What is recorded is that the petitioner has wrongly claimed certain deductions which he was not entitled to. There is a well known difference between a wrong claim made by an assessee after disclosing all the true and material facts and a wrong claim made by the assessee by withholding the material facts fully and truly. It is only in the latter case that the Assessing Officer would be entitled to proceed under section 147. We are supported in this view by a decision of a Division Bench of this court in Hindustan Lever Ltd. v. R. B. Wadkar, Asst. CIT (No. 1) [2004] 268 ITR 332 (Bom) where in a similar case the Division Bench held that reason that there was a failure to disclose fully and tr....