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TMI Blog2013 (11) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... rd the ld. representatives of the parties and have perused the orders of the authorities below. 4. We observe that assessee is an association of Air Cargo Agents in India. That the main source of income is on account of membership subscription received from the members. For the assessment year under consideration the assessee filed the return of income on 31.10.01 declaring taxable income at Rs.24,76,044/-. The Assessing Officer completed the assessment under section 143(3) of the Act on 15.03.04 at an income of Rs.28,31,310/-. We observe that during the course of the assessment proceedings the Assessing Officer had recorded in respect of the receipt from members by way of subscriptions and contribution as under: ".... The assessee compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 148 of the Act as well as the assessment order passed on annulled. 7. During the course of hearing the ld. D.R. merely relied on the order of the Assessing Officer without bringing anything on record and/or to justify that the reassessment proceeding has been initiated on account of failure by the assessee to disclose fully and truly the material facts due to which the income has escaped assessment because the assessment proceeding is initiated after the expiry of four years from the end of the relevant assessment year and the assessment order was also passed under section 143(3) of the Act dated 15.03.04. 8. In order to appreciate the action of the Assessing Officer, we consider it prudent to reproduce the relevant provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provision of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139:] ------------ ----------- ------------- (2) The Assessing Officer shall before issuing any notice under this section record his reasons for doing so." 9. From the above provision of section 147, it is clear that if the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the reasons and evidence. Their Lordships have held that said vital link is the safeguard against arbitrary reopening of the concluded assessment. It was further held by Their Lordships in the above case that the reasons recorded by the Assessing Officer cannot be supplemented by filing an affidavit or making an oral submission. 11. Thus, Their Lordships of the Hon'ble Bombay High Court in the case of Hindustan Lever Ltd (supra) has mentioned that AO must disclose in the reasons as to which facts or material facts was not disclosed by the assessee fully and truly, which was necessary for assessment of that assessment year so as to establish vital link between the reasons and evidence. However, we observe that the relevant material, at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvations of Full Bench was considered by Hon'ble Jurisdictional High Court in the case of Asian Paints (308 ITR 195) and in para 9, Hon'ble Court have stated as under: "It is clear from the observations made above that the Full Bench of the Delhi High Court has taken a view that in a situation where according to the Assessing Officer he failed to apply his mind to the relevant material in making the assessment order, he cannot take advantage of his own wrong and reopen the assessment by taking recourse to the provisions of section 147. We find, ourselves, in respectful agreement with the view taken by the Full Bench of the Delhi High Court." 13. There is no dispute to the fact that the AO has not been conferred the power to review his own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all material facts necessary for assessment for that assessment year and the assessment is made u/s 143(3) and the initiation of reassessment proceedings beyond 4 years from the end of the relevant assessment year is not justified if there is no allegation in the reasons recorded for reopening the assessment that there was any failure on his part to fully and truly disclose material facts necessary for assessment year. Since the above case squarely applies to the facts of the case before us as in the reasons recorded by the AO there is no such facts mentioned by the AO that the income chargeable to tax has escaped assessment on account of failure on the part of the assessee to fully and truly disclose material facts necessary for assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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