TaxTMI 
TaxTMI 
2021 (7) TMI 959
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....Regarding the business operation of the petitioner, there is no serious dispute between the parties to the lis on hand. 3.The learned Senior Counsel appearing on behalf of the writ petitioner mainly contended that the very initiation of reopening proceedings under Section 147 of the Act, beyond the period of four years in the absence of any tangible material, is unsustainable. Proviso clause to Section 147 of the Act unambiguously enumerates that in the event of reopening the assessment beyond the period of four years, the Assessing Officer must have reason to believe that there was suppression or the assessee had not fully and truly disclosed the income. This being the mandatory requirement for reopening of assessment beyond the period of four years, the said element is absent, as far as the case of the petitioner is concerned and thus, the impugned order is liable to be set aside. 4.The learned Senior Counsel solicited the attention of this Court with reference to the materials produced by the assessee before passing the original order of assessment. In the present case, it is not a routine assessment, but a scrutiny assessment. The petitioner filed its return of income wit....
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....ought for by the petitioner were not given. Thus, there is a denial of opportunity to defend the case. For all these reasons, the impugned order, disposing of the objections, as well as the initiation, are to be set aside. 7.The learned Senior Standing Counsel appearing on behalf of the respondents disputed the contentions raised on behalf of the petitioner by stating that the details and the list of companies as well as the informations provided by the assessee to the Assessing Officer before passing the original assessment order as well as the reasons for reopening of assessment are not one and the same. In order to substantiate the said contention, the reasons furnished by the Assessing Officer for reopening of assessment in proceedings dated 05.05.2017 are referred to and the reasons are as follows:- "Information has been gathered that the assessee company during the period 19-20-2010 to 17.03.2010, had made payments to the tune of Rs. 814.95 crores to 27 private limited companies and one limited company. There entities were not genuinely engaged in the business of sale of software. Not only the purchases made the assessee company but also the depreciation claimed w....
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....tanding Counsel relied on Explanation 1 to Section 147 of the Act wherein, the Act contemplates that production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Thus, furnishing of certain informations, books of accounts etc., by the assessee, at the time of filing of return of income, alone is not the deciding factor for reopening of assessment under Section 147 of the Act and even in respect of the same books of accounts or details, if there are new material, suppression or the assessee has not truly and fully disclosed the income, then also re-assessment shall be done by the Assessing Officer under the Proviso clause to Section 147 of the Act. 10.It is contended that there is a dispute with reference to the details and books of accounts as well as the informations gathered by the Assessing Officer and notice under Section 148 of the Act was issued and the Department has followed the directives of the Hon'ble Supreme Court of India in the case of GKN Driveshafts (India) Ltd.....
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....cts necessary for his assessment. 13.The very intention of the provision is to ensure that even in cases where there was an omission or commission or by mistake certain particulars or details were not given by the assessee at the time of original assessment, after reopening of the assessment, the assessee shall produce all those documents, which were omitted, left out as well as the informations. Thus, the provision do not doubt about the integrity of an assessee under Section 147 unless a contrary is established by the Assessing Officer. Unlike the third phase of Chapter XIV of the Act wherein such operation results in initiation of proceedings under Section 153A or 153C of the Act, Section 147 provides an opportunity for the assessee to furnish further details, books of accounts or otherwise in the event of any income chargeable to tax has escaped assessment for any assessment year. The language employed in the proviso clause is that the assessee failed to disclose fully and truly. In case, the assessee has not furnished the informations fully, the non-submission of those informations fully may result on account of certain omission or mistake or otherwise. However, the word "t....
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....aterial facts necessary for the assessment of the assessee company for the relevant Assessment Year. The points of objection raised by the assessee in Point Numbers 2, 3 and 4 of para 2 thereby becomes factually redundant because the tenets of change of opinion or absence of new information is not relevant in this case due to the existence of new information. 9. .......... 10. An examination of the assessment records of the assessment originally made reveals that where the reason given for effecting reassessment were not the matters considered by the assessing authority while passing assessment order. The point of dispute at the time of original assessment was whether the interest earned by the assessee adjusted against prior period expenses were to be considered as Income from other sources or not. The Assessing Officer has neither verified the genuineness of such transactions nor the genuineness of such parties. Therefore, since no opinion was formed in this regard, the contention that no new material have been brought to light to invoke the power and proceedings under Section 147 or that it is proposed by way of 'change of opinion' is not relevant. Mere....