TaxTMI 
TaxTMI 
2022 (12) TMI 305
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....otice dated 29.03.2019 under Section 148 of the Income Tax Act, 1961 (IT Act), seeking to reopen the assessment for AY 2012-13. Thus, the impugned notice was issued after the expiry of four years from the end of the relevant AY. Even Ms Razaq did not dispute that for the impugned notice to be sustained, the respondents would have to establish failure on the part of the Petitioner to disclose fully and truly all material facts necessary for its assessment for the relevant AY. Therefore, the main question in this petition is whether there was any such failure. 5. Upon receipt of the impugned notice, the Petitioner sought reasons recorded and such reasons came to be furnished by respondent no.1 to the Petitioner on 23.11.2019. In response, the Petitioner filed detailed objections on 05.12.2019 to reopening the assessment. However, respondent no.1, by order dated 07.12.2019, rejected the objections. Hence, the present petition. 6. As noted earlier, the reasons for reopening the assessment were furnished to the Petitioner on 23.11.2019, and the same read as follows: "GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX A....
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.... The same were received during FY 2013-14 and accounted in that year. The extract of account of Monitoring Committee for these transaction accounted in FY 2013-14 is enclosed herewith as Annexure-B" 5. Further, as per report in respect of e-auction of iron ore by the monitoring committee appointed the Supreme Court of India that the said e-auction took place in the financial year 2011-12 and the same has to be accounted in the same financial year. As the company maintain its account as per Mercantile system and hence revenue/sales determined (e-auctioned amount) in the FY 2011-12 ( A.Y. 2012-13) has to be accounted in the same year. Hence, the assessee's comments as, "amount were received by us in the year 2013-14 and hence we accounted in AY 2014-15" is not acceptable. 6. Hence, the e-auctioned amount of Rs.64,92,00,000/- determined by the monitoring committee appointed by the Hon'ble Supreme Court of India is taxable in the year of e-auctioned took place and amount determined i.e. FY 2011-12 (AY 2013-13)." HIREMATH BASAVARAJ MALLAYA AO AS SPL RANGE PANAJI" 7. Significantly, the reasons furnished do not even allege that there was a failure to disclose fully and truly a....
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....n material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing affidavit or making oral submission, otherwise, the reasons which were lacking in the material particulars would get supplemented, by the time the matter reaches to the Court, on the strength of affidavit or oral submissions advanced." 10. Similarly, in Bajaj Allianz Life Insurance Company Ltd. V/s. Deputy Commissioner of Income Tax, Circle1(1) (2020) 113 taxmann.com 238 (Bombay), another Division Bench quashed the notice issued after the expiry of four years from the end of the relevant AY, inter alia, on the ground that in the reasons furnished, there was not even an allegation of failure on the part of the Assessee to truly and finally disclose all material facts necessary for assessment. Moreover, the Division Bench held that mentioning this requirement in th....
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....ved no portion of the sale proceeds during AY 2012-13. The sale proceeds were ultimately received during AY 2013-14, which was duly accounted for during the said year. Even the extract of the account of the Monitoring Committee for such transactions accounted during AY 2013-14 was enclosed as Annexure 8. 16. The Petitioner also pointed out that the E-auctioned amount of iron ore for AY 2012-13 was of Rs.64.92 crores, but the same was not offered to tax because the Petitioner never received this amount during AY 2012-13. Further, there was uncertainty about the status of this amount, given the orders made by the Hon'ble Supreme Court on this subject from time to time. Finally, the Petitioner pointed out that no sooner than this amount of Rs.64.92 crores was received in the following AY, the same was offered for tax. The Revenue assessed this offer and taxed the Petitioner at a higher rate of 34% when the tax rate for AY 2012-13 would have been only 32%. 17. Based upon the above disclosures, the Petitioner's return was duly assessed, and no additions were ordered. Therefore, the fact that the assessment order makes no explicit reference to the disclosures is hardly relevant. 18. F....
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.... this Court pointed out that there is a well-known difference between a wrong claim by an Assessee after disclosing the true and material facts and the wrong claim made by the Assessee by withholding material facts fully and truly. Only in the latter case would the Assessing Officer be entitled to reopen the assessment after four years. 23. Therefore, the question is not whether the Petitioner was right in not offering the amount of Rs.64.92 crores to tax during AY 2012-13, but the question is whether the Petitioner had disclosed, fully and truly all material facts concerning this amount of Rs.64.92 crores, which, incidentally, was never received by the Petitioner during AY 2012-13. Moreover, the Petitioner disclosed this material fact and explained why this amount was not brought to tax during AY 2012-13. Apparently, this explanation found favour with the Assessing Officer; therefore, this amount was not added to the returned income for the relevant AY. 24. As noted earlier, the record also bears out that the Petitioner duly accounted for the above amount for the following AY 2013-14, and appropriate tax was paid thereon. Moreover, the AO for AY 2013-2014 did not object to this ....