2021 (8) TMI 568 - HC - Income Tax

Reopening of assessment u/s 147 - no failure on the part of the assessee to disclose fully and truly the details and particulars necessary for completing the assessment u/s 143(3) - HELD THAT - Reopening of the assessment was after years and there was no tangible material to establish that the assessee failed to disclose fully and truly all materials, which are required for the assessment at the first instance. Tribunal took note of the fact that the assessee has furnished all necessary details required for completing the assessment including the photostat copies of the Sale Deed. Tribunal observed that the original Sale Deed will always be with the buyer of the property and the assessee will have only a certified copy and the AO did not insist upon production of the original Sale Deed while completing the assessment under Section 143(3) - Therefore, it was held that there was no case for reopening the assessment. Tribunal was fully justified in holding that the reopening of the assessment could not have been made in the facts and circumstances of the case and we find no question of law, much less substantial question of law arising for consideration in this appeal.

Summary

Issues: Reopening of assessment under Section 147, Failure to disclose fully and truly the details for assessment under Section 143(3)

Reopening of Assessment under Section 147:
The appeal was filed against the order of the Income Tax Appellate Tribunal (ITAT) for the assessment year 2005-06. The Assessing Officer reopened the assessment under Section 147, stating that the long-term capital gain should be computed based on the sale consideration adjusted as per Section 50C of the Income Tax Act. The appellant argued that the compounding fee charged was not part of the market value determination but was for a specific reason related to the property. The Assessing Officer disagreed, considering the compounding fee as part of the property value. The Commissioner of Income Tax (Appeals) upheld the order, leading to an appeal before the Tribunal.

Failure to Disclose Fully and Truly for Assessment under Section 143(3):
The Tribunal noted that the assessment was reopened after several years without substantial evidence of undisclosed material by the assessee. It was observed that the assessee had provided all necessary details, including copies of the Sale Deed, during the initial assessment under Section 143(3). The Tribunal highlighted that the original Sale Deed would typically be with the buyer, and the assessee would possess a certified copy. The Assessing Officer did not request the original Sale Deed during the initial assessment. Consequently, the Tribunal concluded that there was no justification for reopening the assessment.

In conclusion, the High Court upheld the Tribunal's decision, emphasizing that there was no legal basis for reopening the assessment. It was deemed that all required details had been disclosed during the initial assessment, and the absence of new material or failure to disclose warranted the dismissal of the appeal. Therefore, the appeal was dismissed, and no costs were awarded.