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2024 (6) TMI 855 - ITAT MUMBAIValidity of Reopening of assessment u/s 147 - assessment is done beyond four years - reasons to believe - HELD THAT - Assessment is reopened entirely based on the material available on records in the form of notes to accounts for the financial year relevant to AY 2009-10. From the perusal of the assessment order passed u/s 143(3) and the details submitted before the assessing officer during the original assessment proceedings we notice that the assessee has submitted the details on capital assets, depreciation etc., before the assessing officer during the proceedings u/s 143(3) of the Act, and that the assessing officer has also verified the same while completing the assessment. It is settled law that where the assessment is sought to be reopened after the expiry of a period of four years from the end of the relevant year, the proviso to section 147 stipulates a requirement that there must be a failure on the part of the assessee to disclose fully and truly all material facts necessary. In the given case, the assessment is sought to be reopened after a period of four years and the proviso to section 147 is applicable. The Hon ble Supreme Court in the case of Kelvinator of India Ltd 2010 (1) TMI 11 - SUPREME COURT has laid down that the AO has no power to review but only to reassess based on any new material that has come to his possession. In assessee s case, from the perusal of records it is clear that the assessing officer has made the additions during reassessment based on the materials which are part of assessment records which have already been verified during the original assessment u/s.143(3). It is also noticed that the assessing officer has not brought on record any new material basis which the reopening is done and that the assessing officer has used the same material as has been considered during the original assessment under section 143(3) - Assessee appeal allowed. Issues Involved:
1. Legality of re-opening the assessment u/s 147 of the Income Tax Act, 1961. 2. Validity of re-opening the assessment beyond the prescribed time limit. Summary: 1. Legality of Re-opening the Assessment u/s 147: The assessee, a charitable trust registered u/s 12A of the Income Tax Act, 1961, contested the re-opening of its assessment u/s 147. The original assessment u/s 143(3) was completed on 23.03.2011, accepting the income returned by the assessee. The re-opening was initiated by a notice u/s 148 dated 17.03.2016, which the assessee claimed was based on a mere change of opinion without any new tangible material or information. The Tribunal noted that the re-opening was based on materials already available on record during the original assessment, and there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. Citing the Hon'ble Supreme Court's decision in Kelvinator of India Ltd and the Hon'ble Bombay High Court's decision in Ananta Landmark (P.) Ltd., the Tribunal concluded that the Assessing Officer (AO) had no power to review but only to reassess based on any new material. Therefore, the re-opening of the assessment was deemed invalid. 2. Validity of Re-opening the Assessment Beyond the Prescribed Time Limit: The assessee argued that the re-opening u/s 147 was beyond the four-year time limit prescribed by the proviso to section 147. The Tribunal acknowledged that the re-opening was indeed beyond four years from the end of the relevant assessment year. The proviso to section 147 stipulates that no action shall be taken after the expiry of four years unless there is a failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. The Tribunal found that the AO's reasons for re-opening the assessment were based entirely on the material already available in the records, which had been scrutinized during the original assessment proceedings. Consequently, the Tribunal held that the re-opening of the assessment was not justified as it was based on the same material previously considered, and there was no failure on the part of the assessee to disclose material facts. Conclusion: The Tribunal set aside the order of the CIT(A) and directed the AO to delete the additions made in the reassessment. The appeal of the assessee was allowed.
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