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2024 (5) TMI 169
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....estate business. With effect from 01 April 2012 i.e., from AY 2012-13, various companies namely, Verma Buildtech and Promoters Private Limited, Rishi Promoters Private Limited, Renu Builders and Promoters Private Limited and Nishit Developers Private Limited along with eight other companies got amalgamated with the petitioner. 3. On 13 September 2011, the petitioner filed its original Income Tax Return ["ITR"] declaring an income of Rs.6,23,974/-. Subsequently, a revised ITR was filed by the petitioner for the concerned AY on 5 June 2012 declaring the same income. 4. Thereafter, the case of the petitioner was selected for scrutiny and pursuant to the same, an assessment order was passed on 10 June 2013, assessing the income of the petitioner to the tune of Rs.6,38,150/- under the normal provisions of the Act and Rs.64,80,409/- under Section 115 JB of the Act. On 2/3 January 2014, a survey under Section 133A of the Act was conducted at the professional office of Mr. Rajesh Gupta, who happened to be one of the Directors of the petitioner. The said survey was converted into a search and a notice dated 22 April 2015 under Section 153A of the Act was issued to the petitioner for t....
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....conclude that the petitioner had failed to disclose truly and fully all material facts necessary for assessment. It is, therefore, urged by the respondents that the instant reassessment proceedings are only based upon the change of opinion of the AO as the assessment qua the petitioner had already been carried out on at least two occasions at an earlier point in time. 11. While drawing our attention to the reasons recorded for reopening the assessment, he contended that the respondent had mistakenly stated that there exists no assessment under Section 143(3) of the Act. 12. He has placed reliance on the decision of the Hon'ble Supreme Court in the case of Calcutta Discount Co. Ltd. v. ITO [1960 SCC OnLine SC 10] to submit that the law does not put the onus on the assessee to state the conclusion which can be reasonably drawn from the primary facts, rather it is the AO who has to conduct such an exercise and apply the law determining the liability of the assessee. 13. Per contra, Mr. Shlok Chandra, learned counsel for the respondent vehemently opposed the submissions advanced by the learned counsel for the petitioner. He submitted that the petitioner had failed to make a tr....
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....ome Tax, Circle 22(2), New Delhi & Ors. [W.P.(C) 13743/2018]. The relevant paragraphs of the said decision read as under:- "18. Before adverting to the merits of the case, we find it appropriate to briefly traverse through Section 147 of the Act to understand the nature, scope and intent behind the enactment of the said provision. For the sake of clarity, the relevant portion of Section 147 of the Act, as it stood prior to substitution by Act No. 13 of 2021, is culled out as under:- "147. Income escaping assessment.- If the Assessing Officer, has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in Sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessmen....
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....after the expiry of four years unless there exists inter alia, a failure of the assessee to fully and truly disclose all the necessary facts necessary for assessment of the concerned AY." 20. Thus, the respondents have laid down their challenge to the relief sought by the petitioner on the ground of lack of true and full disclosure, more specifically on the latter part, during the original assessment proceedings. In order to ascertain the meaning of full disclosure in the context of Section 147 of the Act, it is noteworthy to refer to Explanation 1 to the said provision which indicates that the production of books and accounts before the AO would not necessarily amount to disclosure within the meaning of the first proviso." [Emphasis supplied] 19. The meaning of the phrase 'true and full disclosure' is succinctly encapsulated by the Hon'ble Supreme Court in the decision rendered in the case of M/s. Mangalam Publications, Kottayam v. CIT, Kottayam [2024 SCC OnLine SC 62], wherein, the Court took a view that mere production of books of accounts or other material evidence that could ordinarily be discovered by the AO cannot be said to be a true and full disclosure....
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....s pertinent query, reference can be made to the decision in Honda Siel Power Products Ltd. (supra), as discussed above, which underscores that the material facts are those facts which if taken into account would adversely impact the assessee by assessing a higher income as compared to the original disclosure. 22. Having examined the scope and extent of true and full disclosure as per Section 147 of the Act, we shall now proceed to examine the factual scenario in the present petition. The reasons recorded by the respondent to reopen the assessment proceedings are reproduced as under:- "1. Reasons for reopening of the assessment in case of M/s BDR Builders and Developers Pvt. Ltd:- The assessee company filed its return of income u/s 139 on 13.09.2011 declaring a total income of Rs. 6,23,974/- and the same was processed u/s 143(1) of the I.T. Act, 1961 on 21.02.2012. As per ITD, there is no 143(3) assessment recorded. 2. Brief details of information collected/received by the AO:- Information received from investigation wing, Delhi vide letter F.No. DDIT (Inv.)/Unit-1 (1) Manoj Sethi 12017-18/8071793/797/8001802 received on 23.03.2018 & 27.03.2018 stating that Mr. ....
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.... filed u/s 139 for the year under consideration and was processed u/s 143(1) 21.02.2012, Since, 4 year from the end of the relevant year has expired in this case, the requirements to initiate proceeding u/s 147 of the Act are reason to believe that income for the year under consideration has escaped assessment because of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the assessment year under consideration. It is pertinent to mention here that reasons to believe that income has escaped assessment for the year under consideration have been recorded above (refer paragraphs 1-7), I have carefully considered the assessment records containing the submissions made by the assessee is response to various notice issued during the assessment/re-assessment proceedings and have noted that the assessee has not fully and truly disclosed the material facts necessary or his assessment for the year under consideration. It is evident from the above facts that the assessee had not truly and fully disclosed material facts necessary for his assessment for the year under consideration hereby necessitating reopening u/s 147 of ....
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....rther, the relevant extract of the letter dated 09 August 2018 sent by the petitioner to the respondent raising objections against the impugned notice and assumption of jurisdiction under Section 147 of the Act, particularly with respect to the cash transactions read as under:- "iv) That there is no justification for drawing adverse inference against the assessee company and in reopening the case of the assessee company on the allegation of information received from Investigation Wing, Delhi in the case of Manoj Sethi who is alleged to have deposited large amount of cash in his own bank account is also alleged to have not furnished the source of such cash deposits. It is respectfully submitted, that it is an undisputed fact that Manoj Sethi has no relation to the assessee company as he is neither a director nor a shareholder of the assessee company and is also not related in any manner to the directors/shareholders of the assessee company. It is respectfully submitted that even if Manoj Sethi has made deposits of cash in his bank accounts, still no adverse inference regarding such cash deposits in the bank account of Manoj Sethi can be drawn against the assessee company." ....
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....nkata Narayana and Sons v. First Addl. ITO [1967] 63 ITR 638 ; Malegaon Electricity Co. P. Ltd. v. CIT [1970] 78 ITR 466 and ITO v. LakhmaniMewal Das [1976] 103 ITR 437 and the decisions of the High Court of Gujarat in Praful Chunilal Patel v. M. J. Makwana, Asst. CIT [1999] 236 ITR 832 and Gruh Finance Ltd. v. Joint CIT (Assessment) [2000] 243 ITR 482, this court observed (page 406) : "The Assessing Officer has in the reasoned order passed by him indicated the basis on which income exigible to tax had in his opinion escaped assessment. The argument that the proposed reopening of assessment was based only upon a change of opinion has not impressed us. The assessment order did not admittedly address itself to the question which the Assessing Officer proposes to examine in the course of reassessment proceedings. The submission of Mr. Vohra that even when the order of assessment did not record any explicit opinion on the aspects now sought to be examined, it must be presumed that those aspects were present to the mind of the Assessing Officer and had been held in favour of the assessee is too far-fetched a proposition to merit acceptance. There may indeed be a presumption tha....