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TMI Blog2014 (2) TMI 610X X X X Extracts X X X X X X X X Extracts X X X X ..... at the time of making original assessment did not disclose truly and wholly the material facts which has come to the notice to the AO later on and due to which the income chargeable to tax has escaped assessment – thus, the initiation of reassessment proceedings by issuing notice u/s 148 of the Act for the assessment year is barred by limitation as the original assessment was made u/s 143(3) of the Act - there is no evidence to establish that the assessee failed to disclose fully and truly the material facts necessary for the assessment – thus, the order set aside – Decided in favour of Assessee. Validity of Reassessment – Held that:- No new material has come to the notice of the Assessing Officer for initiating the reassessment proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal assessment was made u/s 143(3) of the Act on 03.11.2006. Subsequently, the Assessing Officer after recording the reasons on 16.03.2011, copy placed at page 6 of the paper book, issued notice u/s.148 of the Income Tax Act, on 28th March 2011. In the reasons recorded, we observe that the Assessing Officer has stated that on perusal of the assessment records, it is noticed that a). The Assessee Trust has credited the entrance fee Rs.2,54,37,000/-, directly to the reserves in the balance sheet without routing it through the income and expenditure account. b). As per schedule 12 of the Income Expenditure Account, during the previous year relevant to the Assessment Year under consideration, the assessee earned interest amounting to Rs.50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assistant Commissioner of Income Tax 268 ITR 232. Their lordships have held that Assessing Officer must disclose in the reasons as to which material facts were not disclosed by the assessee fully and truly, which was necessary for assessment of that assessment year to establish vital link between the reasons and evidence. Their lordships have held that said vital link is to safeguard against arbitrary reopening of the concluded assessment. It was also held that reasons recorded by the assessing officer cannot be supplemented by falling an affidavit or making an oral submission. 8. On perusal of reasons recorded by the Assessment Officer and the facts of the case, we observe that the assessing officer has not received any further evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year. At the time of hearing, it was contended by ld. DR that the original assessment was made u/s.143(1) of the Act and therefore, the action of the Assessing Officer to initiate reassessment proceedings by assessee notice u/s.148 of the Act is justified. However, ld. AR submitted that above issue is also covered by the decision of the Hon'ble Bombay High Court in the case of Prashan S. Joshi vs. ITO 230 CTR (Bom)232 and also Hon'ble Gujarat High Court in the case of Ratna Trayi Reality Service, Pvt. Limited vs. Income Tax 356 ITR 493. 12. On consideration of the facts of the case, it is a fact that no new material has come to the notice of the Assessing Officer for initiating the reassessment proceedings and the reassessment has been in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer is that there is change of opinion. 14. Since in the case before us, no tangible material has been brought on record which has come to the notice of the Assessing Officer after the return was processed u/s.143(1) of the Act, we hold that the action of the Assessing Officer to initiate reassessment proceedings is not in accordance with law. Hence, we accept the contention of the assessee that the initiation of reassessment proceedings is not valid. Therefore, we quash the reassessment order by allowing the ground of appeal taken by the assessee for assessment year 2005-06 as well. 15. In the result, both the assessee's appeals for assessment years 2004-05 and 2005-06 are allowed. The above order was pronounced in the open court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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