2018 (6) TMI 1852 - HC - Income Tax

Reopening of assessment u/s 147 - failure to disclose all facts regarding a bank account during the assessment proceedings - notice is beyond the prescribed period of four years HELD THAT - The petitioner had filed its objections by letter dated 23rd May, 2017 to the reasons inter-alia pointing out that during the course of assessment proceeding, the petitioner had submitted details of its Bank Accounts including that of the Abhudaya Co-operative Bank Limited. Besides, the same Bank Account is also reflected even in their Balance Sheet which is a subject matter of consideration during the assessment proceedings. The order disposing off the objection is completely silent with regard to the petitioner s contention that there was no failure on its part to disclose all facts with regard to the subject Bank Account during the assessment proceedings to the Department. The impugned notice being beyond the period of four years is hit by the first proviso to Section 147 and in absence of any failure to disclose the facts fully and truly, the AO cannot exercise jurisdiction. Prima-facie, it appears that the impugned notice is without jurisdiction. Accordingly, there shall be interim stay restraining the Revenue from acting further upon the impugned notice dated 30th March, 2017 for Assessment Year 2010-11.

Summary

Issues involved:
The issues involved in this case are the challenge to a re-opening notice dated 30th March, 2017 issued under Section 148 of the Income Tax Act, 1961 for the Assessment Year 2010-11. The petitioner alleges that the notice is beyond the prescribed period of four years and lacks jurisdiction due to the petitioner's contention that there was no failure to disclose all facts regarding a bank account during the assessment proceedings.

Challenge to Re-opening Notice:
The petition under Article 226 of the Constitution of India challenges the re-opening notice dated 30th March, 2017 issued under Section 148 of the Income Tax Act, 1961 for the Assessment Year 2010-11. The petitioner had previously completed the assessment for the same year on 20th March, 2014 under Section 143(3) read with Section 153A of the Act. The reasons for the impugned notice stem from information received regarding a bank account not disclosed during the assessment proceedings. The petitioner contends that details of the bank account were indeed submitted during the assessment proceedings and were reflected in their Balance Sheet, indicating no failure to disclose the information. The order disposing of the objection did not address this contention, leading to the prima facie view that the notice is without jurisdiction due to being beyond the four-year period and the absence of any failure to disclose facts fully and truly. An interim stay has been granted to restrain the Revenue from further action on the notice.

Respondent's Waiver:
Mr. Walve, representing the respondent, waived the service of notice on behalf of the respondent, indicating their acknowledgment or acceptance of the proceedings without the need for formal notice.