9911796707
|
Home
Issues:
Reopening of assessment under section 148 of the Income-tax Act, 1961 based on alleged undisclosed income from M/s. Atlas Agencies for the assessment year 1963-64 challenged under article 226 of the Constitution. Analysis: The petitioner, a partnership firm, received a notice seeking to reopen the assessment for the year 1963-64 based on the Income-tax Officer's belief that M/s. Atlas Agencies was a concern of the petitioner, and its income should have been assessed with the petitioner. The petitioner contested this claim, stating that detailed discussions were held during the original assessment regarding the genuineness of transactions with various parties, including M/s. Atlas Agencies. The Income-tax Officer had scrutinized the transactions, and the petitioner had disclosed the dealings with M/s. Atlas Agencies in the balance sheet and statements. The assessment order showed that the Officer was not satisfied with transactions with some parties, leading to disallowances. The petitioner argued that the Officer had thoroughly examined the transactions during the original assessment. The Income-tax Officer sought to reopen the assessment based on the belief that M/s. Atlas Agencies was a benamidar of the petitioner, alleging that the firm was financed by the petitioner, and its business activities were intertwined with those of the petitioner. However, the Officer did not provide concrete evidence to support this claim. The Officer's reasons for reopening the assessment were challenged, as it was unclear whether the facts gathered were not available during the original assessment or from the assessment order of M/s. Atlas Agencies. The petitioner argued that the Officer failed to establish that there was an omission or failure on the petitioner's part to disclose material facts during the original assessment. The Court referred to precedents emphasizing that for reopening an assessment, there must be concrete evidence of the assessee's failure to disclose material facts leading to escaped assessment. In this case, since the transactions with M/s. Atlas Agencies were disclosed during the original assessment, and the Officer had scrutinized various transactions, the Court found that the revenue had not met the burden of proving that new facts had emerged post the original assessment. Consequently, the Court quashed the notice issued under section 148 and restrained further proceedings. Any assessment made pursuant to the notice was also set aside. The Court ruled in favor of the petitioner, holding that the revenue failed to establish grounds for reopening the assessment. The judgment concluded by making the rule absolute, quashing the notice under section 148, and restraining the respondents from taking further action. The Court also stayed the operation of the order for six weeks from the date of the judgment.
|
