2023 (2) TMI 309 - AT - Income Tax

Reopening of assessment u/s 147 - reopening of assessment beyond four years - HELD THAT - In this case, by considering the paper book we of the considered opinion that the assessee has filed all the details in respect of depreciation claim made by the assessee. Therefore, it cannot be said that there is failure on the part of the assessee to disclose fully and truly all the material facts for completing the assessment. The Assessing Officer, in the reasons recorded, simply mentioned that there is a failure on the part of the assessee. The Assessing Officer has not able to establish that there is a failure on the part of the assessee. Thus, in our considered opinion, the notice issued under section 148 of the Act is invalid. We hold that the notice issued under section 148 of the Act in this case is invalid and thus, the ld. CIT(A) has rightly quashed the reassessment proceedings. Accordingly, the ground raised by the Revenue is dismissed.

Summary

Issues Involved:
Appeals against common order of Commissioner of Income Tax (Appeals) for assessment years 2009-10 and 2010-11. Delay in filing appeals by Revenue. Validity of reopening assessment due to depreciation claim discrepancy.

Detailed Analysis:

1. Delay in Filing Appeals:
The Revenue filed appeals against the common order of the Commissioner of Income Tax (Appeals) for the assessment years 2009-10 and 2010-11. The appeals were delayed by two days, and the Revenue sought condonation of the delay. The delay was condoned as the Revenue demonstrated sufficient cause. The appeals were admitted for adjudication.

2. Validity of Reopening Assessment:
The Assessing Officer reopened the assessment under section 147 of the Income Tax Act based on the claim that the assessee had incorrectly claimed depreciation at 30% instead of the eligible 15%. The Revenue contended that the reopening was valid as the assessee failed to disclose all details, leading to an escapement of income. However, the assessee argued that all necessary details were provided during the original assessment under section 143(3) in 2011. The Tribunal found that the notice issued under section 148 of the Act was invalid as the assessee had disclosed all material facts during the original assessment.

3. Legal Arguments and Case Law:
The Revenue raised various grounds challenging the Commissioner's order, citing case law to support their position. The Tribunal analyzed the arguments and case law presented by both parties. The Tribunal found that the case law cited by the Revenue did not apply to the facts of the case, and the explanation provided for reopening the assessment was not valid.

4. Decision and Dismissal of Appeals:
After considering all facts and arguments, the Tribunal held that the notice issued under section 148 of the Act was invalid. Consequently, the reassessment proceedings were quashed, and the appeals filed by the Revenue were dismissed for both assessment years 2009-10 and 2010-11. As the reopening of assessment was deemed invalid, further adjudication on merits was deemed unnecessary.

In conclusion, the Tribunal dismissed the appeals filed by the Revenue, emphasizing the importance of disclosing all material facts during assessments and highlighting the need for valid grounds to reopen assessments under the Income Tax Act.