AI Drafter 
TaxTMI 
TaxTMI 
2025 (12) TMI 201
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....ment year 2011-2012, admitting a total income of Rs. 190,30, 75,570/-. 2. The Writ Petitioner, City Union Bank Limited at Kumbakonam/assessee is a banking company. It had filed its return of income on 30.09.2011, for the assessment year 2011-2012 admitting a total income of Rs. 190,30, 75,570/-. The return was processed under Section 143(1) of the Act on 08.02.2012. The case was taken up for scrutiny and notice under Section 143(2) was issued on 02.08.2012. The assessee then filed necessary documents in response to the said notice. Thereafter, an order dated 14.03.2014 was passed under Section 143(3) of the Act, assessing the total income at Rs. 268,45,50,527/-. That assessment order had been challenged before the appellate authority. 3. The Deputy Commissioner of Income Tax issued notice on 26.03.2015, under Section 148 of the Act, proposing to reassess the return for the assessment year 2011-2012. The Writ Petitioner addressed a letter dated 09.04.2015, calling upon the authority to furnish a copy of the reasons recorded for initiating proceedings under Section 147 of the Act. They also filed return of income on 01.05.2015. A letter dated 06.01.2016 objecting to the initiat....
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....ls and documents. It had been further observed that the Writ Petitioner/assessee can make any claim even wrong or fanciful regarding disallowance. It was held that the Assessing Officer should have applied Rule 8D of the Income Tax Rules, 1962 and determined the amount of expenditure filed for the purpose of disallowance. It had been held that there cannot be reopening of a concluded assessment. It was held that there was no failure on the part of the Writ Petitioner/assessee, but rather a failure on the part of the Assessing Officer to make appropriate determination of the amount of expenditure in terms of Section 14A of the Act. It was therefore held that there was no authority conferred to reopen the assessment after the expiry of four years from the end of the assessment year. It was held that the authority cannot take advantage of their own wrong. Holding as above, the Writ Petition was allowed and the notice dated 09.03.2018 issued under Sections 148 read with 147 of the Act and the order dated 08.11.2018 were both quashed. Challenging that particular order, the respondents in the Writ Petition/revenue have filed the present Writ Appeal. 8. Mr.N.Dilipkumar, learned Standin....
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....e Writ Petition has been filed questioning the notice issued under Section 148 of the Act dated 09.03.2018 and the rejection of the objections dated 08.11.2018. He contended that the respondent themselves had answered and raised further objections to the communication dated 08.08.2018 and therefore, final orders were passed rejecting all these objections. He therefore, contended that the Writ Petition was not maintainable. 9. In this connection, the learned counsel placed strong reliance on the judgment of the Hon'ble Supreme Court reported in (2003) 1 SCC 72 (GKN Driveshafts (India) Ltd. Vs. Income Tax Officer and Others) and placed specific reference to paragraph 5. However, in the reply arguments, MrT.Suryanarayana, learned counsel for the respondent invited this Court to examine this order of the Hon'ble Supreme Court in its entirety and we would, therefore, extract the order in its entirety: "1. Heard learned counsel for the parties. 2. Leave is granted. 3. By the order under challenge, a Division Bench of the High Court at Delhi dismissed the writ petition filed by the appellant challenging the validity of notices issued under Sections 14....
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....on would be (i) to file return; (ii) to seek reasons for issuing notice; and (iii) on receipt of reasons, to file objections to issuance of notice. It had been further held that the Assessing Officer should dispose of the objections by passing a speaking order. 11. In the instance case, the respondent had taken recourse to all these three steps. But however, the respondent had not challenged the final order passed rejecting objections. They choose to challenge the initial order. 12. Mr.T.Suryanarayanan, learned Senior Counsel justifying that course of action stated that there was no justifiable reason given for issuance of notice under Section 148 of the Act. He placed specific reliance on Section 148(2) as was prevalent at the time when the notice was issued viz., "148. (2) The Assessing Officer shall, before issuing any notice under this Section, record his reasons for doing so." 13. The learned Senior Counsel contended that no reasons had been recorded for issuing notice. In this connection, he placed reliance on the judgment of the Hon'ble Supreme Court reported in [1961] 41 ITR 191 (SC) [Calcutta Discount Co. Ltd. Vs. Income-....
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....escaped assessment for any assessment year, he may assess or reassess such income as also other income chargeable to tax coming to his notice subsequently in the course of the proceedings under Section 147 of the Act, subject to the provisions of Sections 148 to 153. The power, therefore, is a wide power which includes the power to assess or reassess the income. The officer is not to act arbitrarily, but he must have some reason to believe that there has been escapement of income chargeable to tax. Reliance placed by the Assessing Officer on the report of an expert regarding the cost of construction of the building cannot be said to be improper, nor can it be said that the report would not provide sufficient justification for that belief that there had been escapement of income, as that report showed a substantial gap between what had been estimated by the valuer and what had been returned by the assessee as the cost of construction. The notice issued, therefore, was not in any way illegal. The writ petition is dismissed. 16. It is thus seen the scope and power of proceeding under Section 147 of the Act subject to the provisions of Sections 148-153 is a wide power which includes....
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....n'ble Supreme Court of India dismissed a Special Leave Petition challenging the dismissal of a Writ Petition filed by the assessee, before the Delhi High Court, questioning the reassessment notice issued under Sections 147/148 of the Act. 18. The judgment of the Division Bench of the Delhi High Court had been published in the citation referred supra. 19. It had been held by the Division Bench of the Delhi High Court as follows: "16. The term "failure" on the part of the assessee is not restricted only to the income-tax return and the columns of the income-tax return or the tax audit report. This is the first stage. The said expression "failure to fully and truly disclose material facts" also relate to the stage of the assessment proceedings, the second stage. There can be omission and failure on the part of the assessee to disclose fully and truly material facts during the course of the assessment proceedings. This can happen when the assessee does not disclose or furnish to the Assessing Officer complete and correct information and details it is required and under an obligation to disclose. Burden is on the assessee to make full and true disclosure. 17.....
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....om his records. But that is not the same thing as saying that the assessee had placed before the Income-tax Officer truly and fully all material facts necessary for the purpose of assessment. The law casts a duty on the assessee to „disclose fully and truly all material facts necessary for his assessment for that year"." (emphasis supplied) 18. The law postulates a duty on every assessee to disclose fully and truly all material facts for its assessment. The disclosure must be full and true. Material facts are those facts which if taken into accounts they would have an adverse affect on assessee by the higher assessment of income than the one actually made. They should be proximate and not have any remote bearing on the assessment. Omission to disclose may be deliberate or inadvertent. This is not relevant, provided there is omission or failure on the part of assessee. The latter confers jurisdiction to reopen assessment. 19. Whether or not there was a failure or omission to disclose fully and truly material facts, is essentially a question of fact. Section 14A was introduced with retrospective effect by Finance Act, 2001, which was tabled in the Parliament o....