AI Drafter 
TaxTMI 
TaxTMI 
2023 (2) TMI 351
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.... on 08-01-2018 in relation to the assessment year 2006-07. 2. The first issue raised by the assessee in its appeal is against the initiation of reassessment proceedings. 3. Briefly stated, the facts of the case are that the assessee is an institution set up by the State Government for providing housing facilities, promoting townships within the area of jurisdiction as directed by the Govt. of Maharastra. The assessee was enjoying the benefit of exemption u/s.10(20A) of the Income-tax Act, 1961 (hereinafter referred to as `the Act') up to A.Y. 2002-03. Return for the year was filed declaring total income of Rs.20,12,10,721/-. No benefit of exemption either u/s.10 or section 11 was claimed because the application for registration u/s.12....
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....x had escaped assessment by reason of failure on the part of the assessee, inter alia, to disclose fully and truly all material facts necessary for assessment. As the period of four years in this case expired much before the issuance of notice u/.148, we need to examine if the requisite condition of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment, was complied with? 5. The reasons recorded by the AO for the initiation of reassessment proceedings have been set out at page 103 onwards of the department paper book. The first reason is "Income not fully offered as income'. The AO noted in the reasons that the assessee enclosed Income and Expenditure statement wherein the following r....
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....tion. However, later on, he realised that the assessee had recorded income at a lower level which amounted to escapement of income. In our considered opinion, it is only change of opinion of the AO de hors any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. 8. The second reason noted by the AO is that the assessee claimed depreciation of leased properties amounting to Rs.7,15,18,379/-. After considering and discussing the difference between finance and operating leasing with reference to the accounting standards, the AO observed in the reasons that it was a case of under-reporting of income by claiming excess depreciation to the tune of Rs.7.15 crore. 9. As can be seen from ....
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.... of by the AO in the reasons is that the assessee changed the accounting system from 'Cash system' to 'Accrual method' due to which proper income was not reflected. 11. Here again, we find that the AO erred in initiating the reassessment proceedings on this score, primarily for the reason that the assessee did not claim any exemption u/s.11 in the return filed originally because the income was offered for taxation without claiming benefit of any exemption. Further, the AO referred only to the Audit report filed by the assessee itself indicating certain amounts as 'Capital receipts not offered for taxation'. By no standard, claim by the assessee of certain amounts as capital receipt in the annual accounts, can be construed as failure of t....
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....ourt approved the initiation of reassessment proceedings by observing that merely because material lies embedded in material or evidence, which the AO could have uncovered but did not uncover, is not a good ground to deny or strike down a notice for assessment. In our opinion, the Department cannot gain any ground from this decision. Primarily, it is a case of writ petition against the initiation of reassessment proceedings. Secondly, the case has developed on the findings that the material particulars referred to in the first proviso to section 147 not only refer to details in return but also to explanations and details furnished during course of assessment proceedings. We fail to comprehend as to how this judgment advances the case of the....