2020 (1) TMI 730 - HC - Income Tax

Reopening of assessment u/s 147 - notice issued beyond the period of four years - HELD THAT - Clear finding of the Tribunal that there was no failure on the part of the Respondent Assessee to disclose fully and truly all material facts and that nothing contrary is demonstrated as to why this finding is incorrect, the questions of law proposed do not give rise to any substantial question of law.

Summary

Issues:
Challenge to order by Income Tax Appellate Tribunal on re-assessment proceedings for Assessment Year 2006-07.

Analysis:
The appellant challenged the order dated 11/8/2016 passed by the Income Tax Appellate Tribunal regarding the re-assessment proceedings for Assessment Year 2006-07. The questions raised by the Appellant - Revenue were related to the justification of holding the re-assessment proceedings as invalid and the denial of applicability of a specific decision. The appeal stemmed from the notice for re-assessment issued under Section 148 of the Income Tax Act, 1961, beyond the four-year period, requiring a failure to disclose all material facts for initiation. The Tribunal found that the assessee had indeed disclosed all material facts during the original assessment proceedings, and there was no failure on their part to fully and truly disclose all necessary facts. The Tribunal cited legal precedents to emphasize that reassessment should be based on tangible material and a live link with the formation of belief regarding income escapement. As there was no failure to disclose material facts by the assessee, the reassessment proceedings were deemed bad in law, leading to the appeal of the assessee being allowed. The Tribunal's finding that there was no failure on the part of the respondent to disclose all material facts remained unchallenged, leading to the dismissal of the appeal.

This detailed analysis of the judgment provides insights into the legal aspects of challenging re-assessment proceedings under the Income Tax Act, emphasizing the importance of disclosing all material facts and the necessity of tangible material for reassessment. The judgment showcases the application of legal principles and precedents to determine the validity of reassessment proceedings, ultimately leading to the dismissal of the appeal in this case.