TaxTMI 
TaxTMI 
2025 (2) TMI 709
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....etitioner, by instituting this Petition, challenges the impugned notice dated 27 March 2021, seeking to reopen the Petitioner's assessment for the assessment year 2014-2015. 5. Admittedly, the impugned notice was issued beyond the prescribed period of four years. Therefore, in terms of the first proviso to Section 147, such reassessment notice could have been issued only for the income chargeable to tax that escaped assessment by reason of the failure part of the assessee, inter alia, to disclose fully and truly all material facts necessary for this assessment for that assessment year. 6. The Petitioner was issued the following reasons for reopening of assessment on 16 September 2021: "2. On perusal of the case records it was....
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....uring the AY 2014-15 should have been added to the total income of the assessee. 3. Further from the clause 25 of the Form 3CD report, it was seen that an amount of Rs.10,57,92,925 was chargeable to tax under section 41 of the IT Act. It was stated that this amount represents provision of written back in different head. This amount should have been offered for taxation. However, this amount was not offered as an income either in P & L Account or Computation of Income statement by the assessee. 4. Further from the case records it is seen from rectification order u/s. 154 dated 26.04.2018 wherein set off of earlier year losses of Rs. 29,57,87,251/- was allowed. However, it was seen from statement giving position of assessed ....
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....5, the Co-ordinate Bench of this Court made the following observations in paragraph 20. "....20. The reasons recorded by the Assessing Officer nowhere state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Off....
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....anced..." 11. Hindustan Lever Ltd. (supra) thus holds that the Assessing Officer must disclose all the reasons for reopening the assessment. This would include a reference to the facts or materials which were allegedly not disclosed by the assessee for the relevant assessment year. The Court held that the Assessing Officer, in case of a challenge to the reasons, must be able to justify the same based on the material on record. The Assessing Officer must disclose the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessing that assessment year to establish a vital link between the reasons and the evidence. 12. The Court emphasised that this vital link safeguards against the arbitrar....