2017 (11) TMI 957

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....ssment year under consideration, the assessee had originally filed its return of income on 28th Oct 2005, declaring total income of Rs. 37,76,040. The return of income filed by the assessee was selected for scrutiny and the Assessing Officer completed the assessment under section 143(3) of the Act vide order dated 30th November 2007, determining the income at Rs. 80,54,516, after making number of disallowances. Subsequently, the Assessing Officer having reason to believe that the commission paid to directors were excessive, thereby, resulting in escapement of income re-opened the assessment under section 147 of the Act and issued notice under section 148 on 29th March 2012. After complying to the notice issued under section 148 of the Act, ....

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....he provisions of section 147 of the Act, such re-opening can be made only in case of failure on the part of the assessee to disclose fully and truly all necessary facts necessary for the assessment. The learned Commissioner (Appeals) held, since, there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment, the Assessing Officer could not have re-opened the assessment after expiry of four years from the end of relevant assessment year. Accordingly, he held the re-opening of assessment under section 147 as void. Being aggrieved of the aforesaid decision of the learned Commissioner (Appeals), Revenue is in appeal before us. 4. The Learned Departmental Representative submitted, the....

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....t order accepting the returned income. Further, from the reasons recorded which is reproduced in the impugned assessment order, it is evident that the Assessing Officer on verifying the audit report in form no.3CD was of the view that the bonus / commission paid of Rs. 1.90 crore to the directors is excessive, hence, the entire amount is not allowable. Thus, as could be seen from the reasons recorded, the re-opening of assessment was simply on the basis of audit report in Form no.3CD filed by the assessee along with the return of income and was available before the Assessing Officer at the time of original assessment proceedings under section 143(3) of the Act. Thus, it is very much clear that after completion of original assessment proceed....

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....eeding under section 147 of the Act can be initiated after expiry of four years from the end of the relevant assessment year, unless, there is failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. The reasons for re-opening recorded by the Assessing Officer would make it clear that on review of material already available on record and, more particularly Form no.3CD filed by the assessee along with the return of income, the Assessing Officer has formed belief that income has escaped assessment. Neither there is any allegation by the Assessing Officer in the reasons recorded nor even in the impugned assessment order that there was any failure on the part of th....