1996 (12) TMI 102 - AT - Income Tax

Assessing Officer Assessment Order Assessment Year High Court Income Tax Original Assessment Sales Tax

Summary

Issues Involved:
1. Validity of reassessment under section 147(a) of the Income-tax Act, 1961.
2. Alleged failure of the assessee to disclose fully and truly all material facts necessary for the assessment.
3. Time-barred reassessment.

Detailed Analysis:

1. Validity of Reassessment under Section 147(a):
The primary issue in this case was whether the reassessment made under section 147(a) of the Income-tax Act, 1961, was valid and legal. The assessee contended that all relevant materials were produced before the Assessing Officer during the original assessment, and there was no new information justifying the reopening of the assessment. The reassessment was challenged on the grounds that it was made after the statutory period of four years had lapsed, as stipulated under section 147(a). The Tribunal examined the provisions of section 147 and concluded that the reassessment made on 28-10-1992 was time-barred since it was made beyond the four-year limitation period which ended on 31-3-1991.

2. Alleged Failure to Disclose Fully and Truly All Material Facts:
The Tribunal analyzed whether the assessee failed to disclose fully and truly all material facts necessary for the assessment. The assessee argued that the additional income of Rs. 7 lakhs was disclosed during the original assessment and was intended to cover any alleged unaccounted sales. The Tribunal found that the assessee had disclosed all material facts in the original return filed on 21-3-1988, and there was no failure on the part of the assessee to disclose these facts. The Tribunal supported its conclusion by referencing the Supreme Court's judgment in Gemini Leather Stores v. ITO, which held that oversight by the Assessing Officer does not justify reopening under section 147(a) if the assessee had disclosed all primary facts.

3. Time-Barred Reassessment:
The Tribunal emphasized that the reassessment was made after the expiry of the four-year period from the end of the relevant assessment year, making it time-barred. The Tribunal referred to the Supreme Court's decisions in ITO v. Mewalal Dwarka Prasad and Gemini Leather Stores v. ITO to support its conclusion that the reassessment was invalid due to the lapse of the statutory period. The Tribunal noted that the original assessment was made on 31-3-1989, and the reassessment on 28-10-1992 was beyond the permissible period, thereby rendering it invalid and illegal.

Conclusion:
The Tribunal concluded that the reassessment under section 147(a) was invalid and illegal due to the lapse of the statutory period of four years and the absence of any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. The appeal was allowed in favor of the assessee, and the reassessment order was set aside.