2014 (4) TMI 1152 - HC - Income Tax

Reopening of assessment - Held that - The appellant had disclosed all primary facts before the A.O. at the time of original assessment and there was no omission or failure on the part of the appellant to disclose fully and truly all material facts necessary for assessment. Therefore in view of the above the proceedings initiated under Section 147 cannot be justified and accordingly treated as invalid and void ab-initio. Exercise under Section 148 of the I.T. Act was started after expiry of four years from the end of the relevant assessment years, the department was obliged to demonstrate that the assessee had failed to disclose fully and truly all material facts necessary for his assessment, for that assessment year which was not done - Decided against revenue

Summary

Issues:
Challenge to judgment and order dated 31st July, 2013 regarding appeals against CIT (A) orders under Section 147 of the Income Tax Act for assessment years 1999-2000, 2001-02, and 2002-03.

Analysis:
The appeals before the Calcutta High Court pertained to the challenge against a judgment and order dated 31st July, 2013, which upheld the appeals preferred by the revenue against an order passed by the CIT (A) reversing orders under Section 147 of the Income Tax Act for the assessment years 1999-2000, 2001-02, and 2002-03. The Revenue was aggrieved by the order of the Tribunal and thus filed the appeals. The CIT (A) had set aside the orders under Section 147 of the I.T. Act for all three assessment years, stating that the appellant had disclosed all primary facts during the original assessment, and there was no omission or failure to disclose necessary material facts. The Tribunal dismissed the revenue's appeal, concurring with the CIT (A)'s views, leading to the current challenge in the High Court.

The key contention revolved around the initiation of proceedings under Section 147 of the I.T. Act after the expiry of four years from the end of the relevant assessment years. The department was required to establish that the assessee had failed to disclose fully and truly all material facts necessary for assessment during that assessment year. However, neither the appellant's counsels, Mr. Bhowmick nor Mrs. Bhargava, could provide evidence, including recorded reasons, to support the initiation of proceedings based on the aforementioned grounds.

Given the lack of evidence to show that the proceedings were initiated due to the assessee's failure to disclose material facts, the High Court found it challenging, if not impossible, to hold that the Tribunal erred in upholding the CIT (A)'s views. Consequently, the High Court concluded that no substantial question of law had been raised in the appeals, leading to their dismissal. The appeals were not admitted, and the decision of the Tribunal was upheld, affirming the orders of the CIT (A) for the assessment years in question.