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TMI Blog2013 (12) TMI 1170X X X X Extracts X X X X X X X X Extracts X X X X ..... and there is no documents on record from which an opinion can be formed that income of the assessee has escaped assessment - Following Parixit Industries (P) Ltd V/s ACIT [2012 (4) TMI 464 - GUJARAT HIGH COURT] – In the absence of existence of "any tangible material" to come to the conclusion that there was escapement of income from assessment, the Assessing Officer exceeded his authority to reopen the assessment merely on the basis of a "change of opinion" - Decided against Revenue. - ITA No.449/Rjt/2012 - - - Dated:- 8-2-2013 - T K Sharma and D K Srivastava, JJ. For the Appellant : Shri Avinash Kumar For the Respondent : Shri M J Ranpura ORDER:- Per: T K Sharma: This appeal by the Assessee is against the order dated 18.5.2012 of the ld.CIT(A)-III-Rajkot, for the assessment year 2003-04. 2. Brief facts of the case are that the assessee is a firm engaged in the business of construction. For the assessment year under construction it filed return of income on 27.11.203 declaring total income at Rs.16,09,604/-. The AO completed the assessment on 8.12.206 determining the loss of Rs.8,66,571/-. On appeal, the ld.CIT(A) partly allowed the appeal of the assessee v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred an appeal before the ld. CIT(A), wherein, he challenged the initiation of action u/s 147 of the Act. In the impugned order dated 18.5.2012, the ld. CIT(A) quashed the assessment for the detailed reasons given in paragraph 4 of the ld. CIT(A) which is reproduced below: 4. I have gone through the assessment order and submissions of appellant. I find that the notice u/s 148 was issued on 2.2.2010, which is beyond a period of four years from the end of the AY 2003-04. There was already an assessment made u/s 143(3) read with section 147 earlier. Therefore, for reopening an assessment already made u/s 143(3), the reasons for reopening must related to failure on the part of the appellant to disclose fully and truly all material facts necessary for the purpose of assessment. The facts show that the project advances of Rs.21,22,000/- were received by appellant for booking of house by the customers of appellant, which were to be sold and given possession on a future date. The revenue in such cases is recognized when the sale of house is made/possession of house is given by including the advances as part of the sale and deducting the proportionate capitalized cost of project. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cond, there was no failure on the part of the appellant to disclose fully and truly al material facts necessary for the purpose of assessment. I therefore, annul the assessment made by the AO u/s 143(3) read with section 147 . Aggrieved by the order of the ld. CIT(A), the Revenue is in appeal before us on the following grounds: 1. The ld. CIT(A) has erred in law and on facts in annulling the order u/s 143(3) rws 147 stating that the AO has no power to reopen the case u/s 147 o the Act after completion of 4 years from the assessment. The ld. CIT(A) has totally misunderstood the facts of the case and has not appreciated the order of the AO which was reopened with the due permission from competent authorities and the addition of Rs.21,22,000/- made on account of advance receipt. 2. The ld. CIT(A) has erred in law and on fcs in not appreciating the facts that the sum of Rs.21,22,000/- shown by assessee as liabilities in the Balance sheet being advances received against sale consideration of units. The assessee was required to tax on the advance receipts of Rs.21,22,000/-. Therefore, the entire advance receipt of Rs.21,22,000/- is to be taxed by the AO considering as sale c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce there is no failure on the part of the assessee to make fully and truly disclosure of material facts, the AO was not having jurisdiction u/s 147 that beyond four years within the meaning of provisions of section 147 of the Act. In support of this, he relied on the decision of the Hon ble Delhi High Court in the case of Atmaram Properties Private Limited V/s DCIT 203 Taxman 408, wherein it is held if the AO fails to apply legal provisions, no fault can be attributed to the assessee. The assessee is merely required to make a full and true disclosure of material facts but is not required to disclose, state or explain the law. A lapse or error on the part of the AO cannot be regarded as a failure on the part of the assessee to make a full and true disclosure of material facts . 5. For the aforesaid reasons, he summited that the ld. CIT(A) is legally and factually correct in quashing the assessment, therefore, the view taken by the ld. CIT(A) be upheld. 6. In rejoinder, the ld. AR of the assessee submitted that the original assessment was framed u/s 144/147, therefore, it cannot be said that while framing original assessment an opinion was formed regarding liability of Rs.21,22 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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