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2014 (3) TMI 180 - AT - Income TaxValidity of Assessment - Escapement of income Assessment reopened within four years Particulars not furnished Held that - The order of the CIT(A) is not correct on the facts of the case as the proviso to section 147 can only be invoked in a case where the assessment has been reopened after the end of four years from the end of the A.Y - the assessment under section 143(3) has been done in this case - the assessment has been reopened before the end of four years from the A.Y., this proviso will not apply - The order of the CIT(A) was not correct on the given facts of the case thus, without going into the other merits of the assessee s contentions, the objections of the Revenue is upheld - the order of the CIT(A) set aside the matter remitted back to the CIT(A) for fresh consideration Decided in favour of Revenue.
Issues:
1. Validity of the assessment reopened under section 147 within four years from the end of the relevant assessment year. 2. Application of proviso to section 147 regarding the escapement of income due to failure to disclose material facts. Analysis: Issue 1: Validity of the assessment reopened under section 147 within four years from the end of the relevant assessment year. The Revenue appealed against the Orders of the CIT(A)-IV, Hyderabad dated 01.08.2013, challenging the assessment reopened under section 147. The original assessment under section 143(3) was completed on 30.12.2009, and the assessment was subsequently reopened by the A.O. on 16.03.2012, within four years from the end of the assessment year. The A.O. did not make any addition relating to the reasons recorded for reopening the assessment but made various other additions. The assessee raised multiple grounds before the CIT(A) challenging the validity of the reassessment. Issue 2: Application of proviso to section 147 regarding the escapement of income due to failure to disclose material facts. The CIT(A) considered that the proviso to section 147 applied to the case and allowed the first ground of appeal raised by the assessee. The CIT(A) held that since the information used for reopening the assessment was disclosed by the appellant itself, there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. The CIT(A) concluded that the issue of notice under section 148 was invalid, and the consequential assessment under section 147 was void ab initio. However, the Revenue contended that the proviso to section 147 could only be invoked if the assessment was reopened after the end of four years, which was not the case here. In the final decision, the Tribunal held that the proviso to section 147 could only be invoked in cases where the assessment was reopened after the expiry of four years from the end of the relevant assessment year. Since the assessment in this case was reopened within four years, the proviso did not apply. Therefore, the Tribunal set aside the order of the CIT(A) and restored the entire appeal to the file of the CIT(A) for fresh adjudication according to the facts of the case and the law on the issue. The Revenue's objections were considered allowed, and the appeal was restored to the CIT(A) for further proceedings. In conclusion, the Tribunal's decision clarified the application of the proviso to section 147 in cases of reassessment and emphasized the importance of timing in invoking such provisions for reopening assessments.
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