TaxTMI 
TaxTMI 
2018 (2) TMI 347
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....e appellant had disclosed and filed all materials relevant for the assessment and there was no omission or failure on its part in this behalf and none pointed out in the reasons recorded for reopening and as such the notice issued under Section 148 of the Act beyond the period of 4 years was not valid and was liable to be cancelled. 3. For that the CIT(A) should have held that the notice under section 148 was issued on a mere change of opinion as all the materials and facts were available with the A.O. while framing the assessment under Section 143(3) of the Act. 4. For that the CIT(A) should have dismissed the re-opening of the assessment in as much as the objections filed by the appellant against the reasons recorded for re-opening of a assessment was not disposed of by the A.O. and the reassessment order was passed without disposing of the objections filed by the appellant." 3. The facts with regard to the initiation of re-assessment proceedings are as follows :- The Assessee is a company engaged in the business of running Hotels. For A.Y.2006-07 an order of assessment u/s 143(3) of the Income Tax Act, 1961 (Act) was passed by the AO in the case of the Assessee on 26.12.20....
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....ear. This is a condition precedent. The relevant proviso reads as follows : "Provided that where as 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 sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year" It was pointed out that for the year under reference, the assessment was undertaken under scrutiny assessment u/s 143(3) of the Act. The said assessment was completed on 26.12.2008. It was pointed out that clause 10 of notes referred to in the recorded reason were readily available with the assessing officer while framing order under section 143(3) of the Act and there was absolutely no failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment....
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....lvex Ltd [2013] 352 ITR 305 (Gauhati) iii) India Steamship Co.Ltd. vs JCIT 275 ITR 155 (Cal) iv) Sabharwal Properties Industries P.Ltd vs ITO 382 ITR 547 (Del) 10. In the decisions cited at sl. Nos.(ii) to (iv) the Courts have taken a view that when an assessment is reopened by issue of a notice u/s 148 of the Act in the case of an assesse whose assessment has already completed u/s 143(3) of the Act for the relevant assessment year and if notice is issued beyond the period of four years from the end of the relevant assessment year then the reasons recorded should explain as to how the escapement of income is on account of the failure of the assessee to disclose fully and truly of material facts necessary for assessment of the income of that year. The Ld.DR relied on the order of the CIT(A). 11. We have considered the rival submissions. As far as the validity of initiation of reassessment proceedings are concerned, it is noticed that the case of the assesse is that there was no fresh tangible material in the possession of AO at the time of recording of reasons for initiating proceedings u/s.147 of the Act. A perusal of the 'Reasons' recorded by the AO in this case reveals that....
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....e reopening of assessment is barred by time under the proviso to Sec. 147 of the Act. On this aspect the reasons recorded by the AO before issuing notice u/s.148 of the Act are set out in the earlier part of this order and the contention of the assessee in this regard is correct. Under the proviso to sec.147 of the Act, where an assessment has been completed u/s 143(3) of the Act, and thereafter the AO seeks to take an action u/s 147 of the Act for re-assessment of income escaping assessment after the period of 4 years from the end of the relevant assessment year, than such proceedings can be initiated only where income chargeable to tax has escaped assessment for that assessment by reasons of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that year. Admittedly the assessment in the present case was sought to be re-opened, after expiry of 4 years from the end of the relevant assessment year and an order of assessment u/s 143(3) has already been passed. The proceedings u/s 147 of the Act are therefore barred by time. In this regard, we also notice that even in the reasons recorded there is no reference to the failu....