TaxTMI 
TaxTMI 
2022 (7) TMI 168
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.... of opinion, without considering the fact that the reason for reopening recorded by the assessing officer was not a change of opinion, but it was proper and lawful appreciation of facts and satisfaction of the assessing officer which was based on ample evidences on record? 2. Whether on facts and circumstances of the case and in law the Ld. CIT(A) was justified in deleting the addition of Rs.1,00,00,000/- by observing that contra entry to show equal asset in the books of account which the assessee did by showing the amount in WIP is absolutely as per the norms of accounting principles, without considering the fact that the undisclosed income declared during the Survey of Rs.1,05,00,000/- was shown as 'Other Income' in P & L Account and which covered the Undisclosed WIP expenses of Rs.1,00,00,000/-. Therefore, such accounting entry resulted in suppressing income of Rs.1,00,00,000/-. 3. Whether on facts and circumstance of the case and in law the Ld. CIT(A) was justified in deleting the addition of Rs.22,71,231/- made by assessing officer on account of Contract Income and Interest Income not shown by the assessee, with an observation that the assessee had shown net ....
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....& L account Difference (Rs.) TDS credit claimed and allowed Contract and sub-contract receipts 51,93,65,772 51,76,33,528 17,32,244 1,17,85,599 Interest Income 19,47,921 14,08,934 5,38,987 2,03,518 Total 52,13,13,693 51,90,42,462 22,71,231 1,19,87,117 The assessee claimed and allowed TDS credit of Rs.1,19,87,117/-, however the corresponding income was not taken into account. Thus, the contract income and interest income amounting to Rs.22,71,231/- was short accounted in profit and loss account. 4. Therefore, on the basis of above information available on record, reasons were recorded u/s 148(2) of the Act, by the assessing officer and notice u/s 148 of the Act, was issued on 30.03.2015 and duly served upon the assessee on 31.03.2015. In response, the assessee, vide letter dated 17.04.2015 stated that return filed on 30.09.2009 may be treated as filed in response to notice u/s 148 of the Act. Thereafter, on merit, the assessing officer noted that since, assessee had not furnished relevant documents and evidences during the assessment proceedings, therefore disallowed Rs.1,00,00,000/- shown as undisclosed work in progress and ad....
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....ial brought on record. Since the Revenue is in appeal before us on the ground that reassessment proceedings initiated by the assessing officer is justified and legal, hence ld CIT(A) ought not to have quashed the reassessment proceedings, therefore first of all, we should analyze the reasons recorded by the Assessing Officer, to know whether reasons so recorded by the assessing officer is in accordance with the provisions of section 147 of the Act. The reasons recorded by assessing officer are reproduced below: "Reason for belief that income has escaped assessment" During the course of post-assessment proceedings, it was observed that the assessee has declared undisclosed income Rs.1,05,00,000/- during the survey proceedings but from the perusal of the Profit & Loss Account for the year ending 31.03.2009, relevant A.Y. 2009-10, it is seen that the assessee had shown undisclosed income of Rs.1,05,00,000/- (Schedule 13: Other income). Simultaneously, the assessee had also shown 'Undisclosure Work in Progress' amounting to Rs.5,00,000/- only as against Rs.1,05,00,000/- undisclosed income declared during survey. This has resulted in under assessment of income of Rs.1,....
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....dings have been initiated after 4 years from the end of the relevant assessment year 2009-10. As per first proviso to section 147 of the Act, if the assessee has disclosed fully and truly all material facts during the original assessment proceedings the reassessment should not be initiated. 11. We also note that in reasons recorded u/s 147 of the Act, the assessing officer did not mention anywhere that he has not satisfied that during the original assessment proceedings under section 143(3) of the Act, assessee has not submitted books of account, documents, WIP details, evidences and explanations. That is, the assessing officer, has nowhere recorded findings to the effect that assessee has failed to disclose fully and truly all material facts necessary for assessment year 2009-10. The settled position of law is that if an assessment for any year has been completed u/s 143(3) or u/s 147, then no action shall be taken u/s 147 after the expiry of four years from the end of relevant assessment year unless income chargeable tax has escaped assessment by reason of the failure on the part of the assessee. We have examined the original assessment order framed by assessing officer under ....
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....n. Thus, it is implied that the Assessing Officer has not applied his mind to arrive at the conclusion that there was of failure on the part of the assessee to disclose fully and truly all the material facts. In other words, mentioning by the Assessing Officer that the assessee has failed to disclose all material facts in the reasons recorded is not sufficient enough. Rather the Assessing Officer is under the obligation to arrive at such conclusion that the assessee failed to disclose all material facts necessary for the assessment after applying his mind and verification of the facts. But the Assessing Officer has not done so. In holding so we draw support and guidance from the judgment of the Bombay High court in case of Gateway Leasing (P.) Ltd vs. ACIT reported in 117 taxmann.com 442 where it was held as under: "35. Having discussed the above, we may once again revert back to the reasons furnished by Respondent No. 2 for re-opening of assessment under Section 147 of the Act. After referring to the information received following search and seizure action carried out in the premises of Shri Naresh Jain, it was stated that information showed that Petitioner had traded in ....