2015 (8) TMI 321 - AT - Income Tax

Reopening of assessment - unaccounted sale of land - CIT(A) quashed reassessment - Held that - As at the time of original assessment, all the details and particulars in connection with the sale of such land has been made available to the AO and since all the material facts in this regard were available with the AO while completing original assessment u/s.143(3) on 10-11-2005 and since it is not the case of the AO that the details regarding such sale of land had not been made available to the AO at the time of original assessment nor it is the case of the AO that petitioner had failed to disclose fully and truly all material facts necessary for his original assessment and or that after completion of original assessment any new information or materials had been received by him and which had not been disclosed by the assessee at the time of original assessment and since the proceedings u/s.147 had been initiated on the basis of same set of materials and papers which were available to the AO at the time of original assessment and only from the records of assessee with revenue filed at the time of original assessment u/s.143(3) of the Act and since it is not the case of the AO that assessee had not furnished all the details and particulars in this regard at the time of assessment and since the proceedings in this case u/s.147 of the Act have been initiated after a lapse of more than four years from the end of the assessment year on the basis of same set of materials made available to the AO at the time of original assessment, no valid proceedings u/s.147 were initiated in this case. Accordingly, we are of the view that the CIT(A) has rightly quashed the reassessment proceedings - Decided in favour of assessee.

Summary

Issues:
1. Validity of reassessment framed by AO under section 147 read with section 143(3) of the Income-tax Act, 1961.
2. Disclosure of material facts by the assessee during the original assessment under section 143(3) of the Act.

Analysis:

Issue 1: Validity of Reassessment
The appeal by the revenue challenged the order of CIT(A) quashing the reassessment framed by the Assessing Officer (AO) under section 147 read with section 143(3) of the Income-tax Act, 1961. The AO initiated proceedings under section 147 based on the alleged failure to consider the capital gains arising from the transfer of land by the assessee. However, it was found that all necessary details and particulars regarding the sale of land were disclosed by the assessee during the original assessment conducted under section 143(3) on 10-11-2005. The Tribunal noted that the AO had access to complete information during the original assessment, and there was no indication that the assessee had not fully disclosed all material facts. Since the reassessment was based on the same set of materials available during the original assessment, and no new undisclosed information was presented, the Tribunal held that the reopening of assessment beyond four years was not valid under section 147 of the Act. Consequently, the CIT(A) rightly quashed the reassessment proceedings, and the appeal of the revenue was dismissed.

Issue 2: Disclosure of Material Facts
The Tribunal emphasized that the AO had all the necessary details and particulars related to the sale of land available during the original assessment under section 143(3). The Tribunal highlighted that the assessee had provided comprehensive information, including agreements, balance sheets, and other relevant documents, which were submitted before the AO. It was noted that the AO had acknowledged the submission of detailed information during the original assessment. As there was no evidence to suggest that the assessee had failed to disclose material facts or that new information had come to light post the original assessment, the Tribunal concluded that the reassessment proceedings initiated by the AO were not valid. Therefore, the Tribunal confirmed the decision of the CIT(A) to quash the reassessment and dismissed the appeal of the revenue.

Conclusion
The Tribunal upheld the decision of the CIT(A) to quash the reassessment proceedings initiated by the AO under section 147 read with section 148 of the Income-tax Act, 1961. Additionally, the Tribunal dismissed the Cross-Objection (CO) filed by the assessee as the issue on merits became academic following the quashing of the reassessment. Consequently, both the appeal of the revenue and the CO of the assessee were dismissed, and the order was pronounced in the open court.