AI Drafter 
TaxTMI 
TaxTMI 
2018 (7) TMI 583
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....owing reasons:- "" The assessee has claimed depreciation claimed wrongly at 100% of the eligible depreciation while actually the assessee is eligible for claiming only 50% of the eligible depreciation. Sl. No Block of Assets Additions where excess depreciation claimed Eligible Depreciation Depreciation claimed Excess claimed to be added back. 1. Lease hold improvements. 6,63,78,107 33,18,905 66,37,810 33,18,905 2. Furniture & Fixtures 41,27,065 2,07,853 4,15,706 2,07,853 3. Office Equipments 2,58,59,315 19,39,449 38,78,898 19,39,449 4. Computers 7,94,83,515 2,38,45,055 4,76,90,110 2,38,45,055 Total 17,58,48,002 2,93,11,262 5,86,22,524 2,93,11,262 Hence, the assessee has been allowed excess depreciation to the extent of Rs. 2,93,11,262/-." I therefore have reason to believe that income to the extent of Rs. 2,93,11,262/-has escaped assessment. As there is a change in incumbent you are hereby given one more opportunity as per the provisions of section 129 of the I.T.Act. Hence, you are requested to file objections if any before 22/11/20....
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.... end of relevant assessment year and where assessment for the said assessment year has already been completed u/s. 143(3) of the Act, then initiation of reassessment proceedings can be done only if there is a failure on the part of assessee to fully and truly disclose all material facts necessary for the assessment of that assessment year. Assessee pointed out that in the reasons recorded by the AO, there is not even a whisper that escapement of income is owing to the assessee's failure to fully and truly disclose all material facts necessary for assessment of that assessment year. Assessee submitted that in the absence of such an allegation in the reasons recorded, initiation of reassessment proceedings should be held to be bad in law and is liable to be quashed. Assessee in this regard placed reliance on several judicial pronouncements. Besides the above, the Assessee also submitted that there was new material based on which the AO came to the conclusion that there was escapement of income. The Assessee submitted that the reopening of the Assessment is purely based on change of opinion which is not permissible u/s.147 of the Act. 7. The CIT(Appeals), however, did not agree wit....
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....ncome chargeable to tax has escaped assessment. It can also be said that initiation of reassessment proceedings is merely on a change of opinion. Apart from the above, we find that in the decision cited by the ld. counsel for the assessee it has been held that wherever proviso to section 147 applies, the AO should specify in the reasons recorded, as to what was the material fact which was not fully and truly disclosed for assessment of the relevant assessment year. If the reasons do not specify so, then the initiation of reassessment proceedings have to be held as invalid. In fact, the Hon'ble High Court of Karnataka in the case of Hewlett Packard Digital Global Soft Ltd. (supra) has in this regard held as follows:- "7. It is observed in the said judgment that the reason recorded by the Assessing Officer no where state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is for the Assessing Officer to disclose and open his mind through reasons. He has to speak through his reasons. It is for the Assessing Officer to reach the conclusion as to whether there was failure un t....
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....issed." 12. We are of the view that admittedly, the proviso to sec.147 of the Act referred to above is applicable in the present case since assessment for relevant assessment year had been completed by the AO originally u/s.143(3) of the Act and the reassessment proceedings were sought to be initiated beyond a period of 4 years from the end of the relevant assessment year. The AO for initiating the re-opening of the assessment proceedings beyond the period of 4 years from the end of the relevant assessment year has to establish that there was escapement of income chargeable to tax because of the failure of the assessee to disclose fully and truly the material facts necessary for the assessment. Neither in the reasons recorded for re-opening the assessment nor in the order of reassessment u/s147 of the Act, the AO has not brought out facts to show any omission on the part of the assessee to disclose fully and truly the material facts when the original assessment was completed. We are of the view that the re-opening of the completed assessment u/s 143(3) of the Act beyond the period of 4 years cannot be justified. We hold that the reopening of the assessment is beyond the time con....