TaxTMI 
TaxTMI 
TaxTMI 
2019 (1) TMI 1345
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.... assessment, the Assessing Officer issued the impugned notice. In order to do so, he had recorded the following reasons :- "The Scrutiny assessment u/S. 143(3) of the I.T. Act, 1961 was completed by the DCIT - 2(2), Mumbai on 19.3.2013 assessing the income Rs. 15676,05,70,980/-. In this case, on verification of the case record, it is noticed that: 1. From Note No. 27 to return of income that assessee bank had credited Rs. 42.90 crore, being outstanding credit entries in draft payable account outstanding for more than 10 years as on 30.09.2010 in terms of directives of R.B.I. dated 05.10.2010. However, assessee bank did not offer the same to tax. It is evident that when an amount is credited in the books, it is not an unreasonable inference to draw that it is a receipt from business. Accordingly, the aforesaid credit was required to be included in the income while computing overall income for tax purpose. This shows the failure on the part of the assessee to include the aforesaid income in its return and this omission has resulted in the under assessment of income by Rs. 42.90 crores, which forms one of the basis of the reopening of the present case. 2. Further, it is not....
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....excess allowance of deduction u/S. 1150(1A)(i) by Rs. 72,58,13,635/-, a failure on the part of the assessee, is required to be disallowed by reopening the case. In view of the above, for the failure on the part of the assessee, I have reason to believe that the assessee's income to the tune of Rs. 162.36 crore has escaped assessment for A.Y. 2011-12 within the meaning of Section 147 of the I.T. Act and the same is required to be brought to tax as well as any other income chargeable to tax which may be found to have escaped assessment as per the explanation 3 to Section 147 of the Income Tax Act, 1961." 3. The petitioner raised objections to the notice of reopening under a communication dated 21.8.2017. Such objections were, however, rejected by the Assessing Officer by order dated 16.11.2017. Hence, this petition. 4. Taking us through the reasons recorded by the Assessing Officer, learned counsel for the petitioner raised following contentions:- i. Notice of reopening of assessment was issued beyond the period of four years from the end of relevant assessment year. There was no failure on the part of the assessee to disclose truly and fully all material facts. The Assessing....
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....n a case in which original assessment was made after scrutiny. The mandatory requirement of income chargeable to tax having escaped assessment due to failure on the part of the assessee to disclose truly and fully all material facts, therefore would apply. Since the days of the decision of Supreme Court in the case of Calcutta Discount Co. Ltd Vs. I.T.O. 41 ITR 191, it is well settled that the responsibility of the assessee is to make true and full disclosure of primary facts. What inference in law should be made on the basis of such facts is within the jurisdiction of the Assessing Officer. Following observations in case of Calcutta Discount Co. Ltd. (supra), may be noted:- "Before we proceed to consider the materials on record to see whether the appellant has succeeded in showing that the Income-tax Officer could have no reason, on the materials before him, to believe that there had been any omission to disclose material facts, as mentioned in the section, it is necessary to examine the precise scope of disclosure which the section demands. The words used are "omission or failure to disclose fully and truly all material facts necessary for his assessment for that year ". It pos....
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....n discovered by the assessing authority if he had pursued investigation on the basis of what has been disclosed. The Explanation to the section gives a quietus to all such contentions; and the position remains that so far as primary facts are concerned, it is the assessee's duty to disclose all of them--including particular entries in account books, particular portions of documents and documents, and other evidence, which could have been discovered by the assessing authority, from the documents and other evidence disclosed. Does the duty however extend beyond the full and truthful disclosure of all primary facts ? In our opinion, the answer to this question must be in the negative. Once all the primary facts are before the assessing authority, he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else-far less the assessee--to tell the assessing authority what inferences, whether of facts or law should be drawn. Indeed, when it is remembered that people often differ as regards what inferences should be drawn from given facts, ....
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....ng to him, the assessee was entitled to deduct only dividend received from subsidiaries during the relevant financial year 2009-10. 7. In the context of these three grounds sought to be pressed in service by the Assessing Officer, the reasons recorded eloquently establish that the Assessing Officer was proceeding on the material already on record. Apart from there being no allegations even in the reasons recorded that there was any failure on the part of the assessee to disclose true and full material fats, in fact, at every important stage, the Assessing Officer has referred to and relied upon the material on record. There is not a single item, no document and no material which did not form part of the original assessment proceedings on the basis of which the Assessing Officer has formed a belief that the income chargeable to tax has escaped assessment. In clear terms, the mandatory requirement flown from first proviso to Section 147 of the Act is not established. The beginning portion of the reasons itself which is in the nature of preamble referred that, "In this case, on verification of the case record, it is noticed that ......". Thus, entire reasons proceed on verification o....
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....rvations:- v. Amount of capital gains wrongly considered :- Assessee has submitted that the short term capital gains as per the revised return of income of the Bank is Rs. 4,68,37,311/-, however, it was wrongly considered as Rs. 44,68,87,311/- in the assessment order u/S. 143(3). On verification of the record the contention of the assessee was found to be correct. Accordingly, the amount of total income of the Bank is reduced by Rs. 40,00,00,000/-. In fact in the reasons recorded, the Assessing Officer had made contradictory statements. In the first part, he has recorded that the assessee had offered such sum to tax on short term capital gain. In the later part, he contradicts himself by saying that the assessee had not offered it to tax. The Assessing Officer now cannot contend that this issue is debatable or is a factual aspect. The material on record would clearly suggest that on this ground, he had proceeded on erroneous footing. 10. With respect to the third ground raised by him also, we find that the Assessing Officer has proceeded solely on the basis of material already on record clearly debarring his jurisdiction for issuing notice of reassessment beyond the period of fo....