2017 (12) TMI 1859 - AT - Income Tax

Reopening of assessment u/s 147 - deductions u/s. 80IA - Notice after expiry of four years - HELD THAT - In this case along with the return of income filed originally by the assessee the assessee had filed the audited accounts tax audit report and auditor s certificates certifying the amounts eligible for deductions u/s. 80IA - Later on the assessment was completed u/s.143(3) after thorough examination of the details documents and evidences furnished in the course of scrutiny assessment proceedings and the total income was determined after allowing deductions u/s 80IA and 80IC of the Act respectively When all the facts have been disclosed which were necessary for the assessment at the original stage itself after four years after scrutiny assessment has been done in this case cannot be revisited by the AO without pointing out specifically as to which primary evidence was non-disclosed by the assessee during original 143(3) proceedings. Since the AO has failed to even point out remotely as to the failure of the assessee in not disclosing of primary facts during original assessment which was completed u/s. 143(3) of the Act which is sine qua non and essential jurisdictional fact for the AO to reopen after four years the scrutiny assessment thereby in this case the A.O lacks jurisdiction to reopen and so is fragile in the eyes of law - Appeal of revenue is dismissed.

Summary

Issues involved:
Challenge against the validity of reassessment under section 147 of the Income-tax Act, 1961 for Assessment Year 2005-06.

Detailed Analysis:
The main issue in this appeal is the validity of the reassessment under section 147 of the Income-tax Act, 1961. The Assessing Officer (AO) had originally completed the assessment under section 143(3) of the Act. Subsequently, a notice under section 148 of the Act was issued, and the assessee requested to treat its return filed under section 139 of the Act as compliant with the notice under section 148. The AO contended that the assessee was not entitled to claim a deduction under section 80IA of the Act due to non-compliance with the requisite conditions. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], who quashed the reassessment proceedings based on judicial precedents. The Tribunal noted that for reopening assessments after four years from the end of the relevant assessment year, the AO must have a reason to believe that income has escaped assessment due to the assessee's failure to disclose all material facts. In this case, as all necessary facts were disclosed during the original assessment under section 143(3), the AO lacked jurisdiction to reopen the assessment after four years. The Tribunal upheld the CIT(A)'s decision and dismissed the revenue's appeal.

In summary, the Tribunal emphasized that for a reassessment after the expiry of four years from the original assessment, both conditions of the AO having a reason to believe income escaped assessment and the assessee's failure to disclose material facts must be satisfied. Since all relevant facts were disclosed during the original assessment, the AO lacked jurisdiction to reopen the assessment. Consequently, the Tribunal confirmed the CIT(A)'s decision and dismissed the revenue's appeal challenging the validity of the reassessment under section 147 of the Income-tax Act, 1961 for Assessment Year 2005-06.