TaxTMI 
TaxTMI 
2017 (4) TMI 244
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....5/- u/s. 40(a)(ia) on the ground that tax was not deducted on payments towards quartz stone excavation. But the notice was served on 12-02-2012, which was more than four years and assessee objected to that. Subsequently, AO issued a notice u/s. 148 on 30-03-2012 which was served on 31-03-2012. The reasons recorded as communicated to assessee are that "As per Schedule-2 to the P&L A/c the assessee has debited Rs. 12,56,805/- towards excavation of Quartz Stones. These amounts were paid to five persons and whose cases, the payments exceed Rs. 50,000/- which attracts the TDS provision. As assessee failed to deduct TDS on such payment, the same is to be disallowed invoking the provisions u/s. 40(a)(ia) of the Income Tax Act, 1961. The amount of Rs. 12,56,805/- was excess relief allowed in the assessment order passed u/s. 143(3) on 09-11-2006". Assessee raised objections against the assumption of jurisdiction and issuance of notice u/s. 148 on the ground that AO did not record that there was a failure on the part of assessee to disclose fully and truly all the material facts and relied on the jurisdictional High Court judgment to contend that re-assessment proceedings were invalid. Howev....
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....t / before the time of hearing, it is prayed that the reassessment proceedings be held invalid or the disallowance be deleted". 4. Ld. Counsel reiterating the submissions made before the authorities submitted that a scrutiny assessment was originally completed u/s. 143(3) and all the necessary information has been filed on record. More over four years have passed from the end of Assessment year by the time notice under section 148 was issued. Therefore, there is no failure on the part of assessee. The reasoning given by the AO in the assessment order that the column in 3CD form has not been filled is a subsequent excuse whereas originally, the recorded reasons indicate that Schedule-2 of assessee furnished before the AO was the basis for reopening. Further, it was submitted that in case of any TDS failure, proceedings u/s. 201(1) should have been initiated rather than disallowing u/s. 40(a)(ia). It was further submitted that the provisions of Section 40(a)(ia) came on statute by the ascent of the President on 10th September, 2004. Therefore, they are not applicable for AY. 2005-06, as held by the Hon'ble Calcutta High Court in the case of PIU Ghosh Vs. DCIT and others [386 I....
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....t Assessment Year, unless any income chargeable to tax has escaped assessment, by reason of any one of the 3 contingencies viz., a) failure on the part of the assessee, to make a return under Section 139; b) failure on the part of the assessee to make a return response to a notice under Section 142 (1) or under Section 148; and c) failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. 13. It is neither the case of the Assessing Officer nor that of the learned senior Standing Counsel that the present case would fall under the first or the second contingency. The respondents attempt to bring the case of the writ petitioner, under the third category, viz., failure to disclose fully and truly all material facts necessary for the assessment. 14. Before testing whether the petitioner was guilty of failure to disclose fully and truly all material facts necessary for the assessment, we must keep in mind the prescription contained in Explanation 1 to Section 147. By this Explanation, it is made clear that the production before the Assessing Officer of all account books or other evidence from which material evidence could, with ....
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.... in the second category of cases as to whether the interests of the Revenue would not suffer in such cases. But the answer is not too difficult to find out. It is only to safeguard the interests of the Revenue in cases of this nature that an express power is conferred upon the Commissioners under Section 263 of the Act. 20. Therefore, what is important in cases of this nature where a challenge is made to the reopening of assessment, is to see (1) whether there was a true and full disclosure of all materials or (2) whether there was a mere production of materials. 21. As pointed out by the Constitution Bench of the Supreme Court in Calcutta Discount Co. Ltd., v. Income Tax Officer and another , the duty of the assessee stops with a true and full disclosure and does not extend to assisting the Assessing Officer with the inferences that could be drawn from out of what was disclosed. 22. Explanation 1, as pointed out by the Supreme Court in Commissioner of Income Tax, Calcutta v. Burlop Dealers Limited, does not impose an onerous obligation upon the assessee. It merely clarifies what could not be treated as true and full disclosure". 6.1. Following the principles laid down ....