2019 (2) TMI 996 - HC - Income Tax

Reopening of assessment - reasons to believe - material evidence could not be discovered by the Assessing Officer and could be discovered with due diligence attracting the explanation to the provisions of section 141 - Held that - From the reasons recorded, it is evident that no fresh material has been found by the Assessing Officer on the basis of which the assessment is sought to be reopened, and that upon verification of the very record that the petitioner has produced during the course of scrutiny assessment, the assessment is sought to be reopened. Nothing specific has been pointed out to show as to what was the failure on the part of the petitioner to disclose fully and truly all materials facts. In the absence of any failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment for the assessment year under consideration the first proviso to section 147 would be attracted and consequently, the assumption of jurisdiction on the part of the Assessing Officer under section 147 by issuing the impugned notice under section 148 of the Act is without authority of law. The impugned notice under section 148 of the Act, therefore, cannot be sustained. - Decided in favour of assessee.

Summary

Issues:
Challenge to notice under section 148 of the Income Tax Act, 1961 for reopening assessment for the assessment year 2011-12.

Analysis:
The petitioner challenged the notice dated 30.3.2018 issued by the respondent under section 148 of the Income Tax Act, seeking to reopen the assessment for the assessment year 2011-12. The petitioner, a pharmaceutical company, had filed the original return of income and later offered additional income during survey proceedings. The case was selected for scrutiny and an assessment order was passed. The impugned notice sought to reopen the assessment based on the same material already on record. The petitioner contended that the notice was issued beyond the permissible period and without any failure on their part to disclose material facts necessary for assessment.

The petitioner argued that the Assessing Officer lacked jurisdiction under section 147 of the Act to reopen the assessment as there was no new material found, and the notice was based on existing records. The petitioner relied on a previous judgment in a similar case where the court had set aside a notice for reopening assessment for a different year. The respondent, opposing the petition, failed to distinguish the facts of the current case from the previous judgment.

The court examined the reasons recorded for reopening the assessment for the year 2011-12 and compared them with a previous judgment for the year 2010-11. It found that the reasons recorded were identical except for the figures. The court observed that there was no specific failure on the part of the petitioner to disclose material facts necessary for assessment. The Assessing Officer had not pinpointed any failure but made a general statement regarding the disclosure of information. As no fresh material was found, and the petitioner had provided all necessary details during scrutiny, the court held that the notice to reopen the assessment was without authority of law.

Consequently, the court allowed the petition, quashed the impugned notice dated 30.3.2018, and made the rule absolute with no order as to costs.